Second agreement’s silence on benefits not an exclusion of them; Worker only signed one agreement
An Ontario court has dismissed a worker’s wrongful dismissal complaint, finding no ambiguity in his employment agreement’s termination provision, despite the fact the employer gave him three different versions at various times.
Hugo Raposo was a senior business technical architect for CA Canada Company, a provider of information technology management software in Canada. CA Canada is a Mississauga, Ont.-based subsidiary of a large global company headquartered in the United States.
Raposo initially applied for his job in April 2014 and CA offered him the position in July. The offer of employment included an employment agreement that contained provision for a CA to terminate Raposo’s employment “for any reason whatsoever by satisfying the notice and severance pay requirements, including the requirements with respect to the continuation of contribution to benefit plans, in the applicable employment standards legislation, unless your termination is for cause. No other notice or severance, whatsoever, either at civil-law, common-law or under statute, shall be payable by CA to you.”
The termination provision also stated that it would be in effect for the duration of Raposo’s employment with CA, regardless of any changes to his position with the company or compensation.
CA also sent Raposo a document called “corporate new hire paperwork” that included a second employment agreement, which it asked Raposo to complete and bring with him on his first day of work. The termination provision in this agreement was the same as that in the offer letter, except that it omitted the phrase “including the requirements with respect to the continuation to benefit plans.” Raposo signed the first employment agreement and brought the paperwork when he started on Aug. 5.
Raposo’s job duties included encouraging customers to purchase additional CA software by advising them of the technical merits of that software — a role considered as “pre-sales” but was part of the sales team. His compensation included a salary and commission. CA provided him with a compensation schedule that outlined his target incentive compensation amount and quotas for the upcoming year. The compensation schedule included a disclaimer that it wasn’t a contract or guarantee of employment, though it also included the following statement: “All CA employees are employed at will, meaning that either CA or the employee may terminate the employment relationship at any time for any reason.” At-will employment is a characteristic of employment in many parts of the U.S., and the document originated with CA’s parent company.
Raposo worked at CA for three years until March 31, 2017, when the company terminated his employment as part of a restructuring. CA sent him a letter offering a severance package that included pay in lieu of notice in accordance with local employment standards requirements, benefits for an additional two weeks, payment for earned and unused vacation days, and a severance payment of $11,538.46 if he signed a full and final release.
Raposo opted not to sign the release, so CA didn’t give him the severance payment, paying him $4,668.55 pay in lieu of notice and $4,151.95 in vacation pay. It also paid him more than $37,000 in commission that was owed to him. CA later realized it had underpaid him by more than $8,000 in vacation pay and offered to make up the difference.
Raposo filed a wrongful dismissal complaint, arguing that the termination provision in his contract was invalid due to a lack of clarity between the offer letter, the second employment agreement, the at-will employment clause that was part of the compensation schedule, and that the omission of continuation of his benefits in the second employment made it unenforceable.
The court found that there was no ambiguity between the two employment agreements. The first one that accompanied the employment offer Raposo received in July 2014 specifically stated that it contained the terms and conditions of employment and Raposo accepted them shortly after receiving them. He also signed the original employment agreement on his first day of work, which stated it would be in effect for the duration of his employment with CA.
The court also found that the second employment agreement that was attached to the corporate new hire paperwork could not have created any ambiguity because the termination provision was the same as in the original — minus the statement on continuation of benefits. In addition, neither party signed the second agreement, nor did anyone refer to it afterwards. No one would have thought they were bound to the terms of the second agreement, said the court.
As for the compensation schedule, it wasn’t an employment agreement and stated as much. The reference to “at-will” employment was intended to apply to U.S. employees and didn’t alter the terms of the original agreement, particularly since nothing was signed with regards to it, said the court, noting that Raposo acknowledged that he understood the compensation structure and he didn’t recall any confusion related to the “at-will” statement — nor did he make any inquiries about it because he had already accepted the terms of the original agreement.
As for the omission of any mention of benefits in the termination provision of the second employment agreement, the court found this wasn’t contrary to employment standards legislation or the offer letter because it didn’t specifically exclude benefits. In addition, CA had told Raposo that both the employment agreement and the offer letter would apply to his employment, and the company did include two weeks of benefits after his termination. It was obvious that the true intention of the parties was to include benefits in the termination package, said the court.
“In the face of an interpretation that would e consistent with the terms of the offer letter, and one that would contradict the offer letter, the reasonable interpretation is the one that would avoid the contradiction,” the court said in dismissing Raposo’s complaint.
For more information see:
• Raposo v. CA Canada Company, 2018 CarswellOnt 12044 (Ont. S.C.J.).
