Employer’s Conduct Constitutes a Repudiation of the Employment Contract thereby Disentitling it from Relying on the Without Cause Termination Provision
In a recent decision of the Ontario Superior Court of Justice (May 2021), Humphrey v. Mene,…
Mr. Rodgers spent his entire professional career in the trucking, freight forwarding and logistics industry. In September, 2009, Mr. Rodgers was 52 years of age and the President of Sameday Worldwide earning a salary of $189,000 plus bonus when he was recruited to accept employment with CEVA Freight Canada Corp. (“CEVA”). Mr. Rodgers had been working for Sameday Worldwide for many years. Mr. Rodgers turned down CEVA’s first offer of employment; he accepted their second offer of employment.
As CEVA’s Country Manager, he was responsible for over 500 employees and revenues in excess of $140 million annually. Mr. Rodgers had an annual salary of $276,000 with a $40,000 signing bonus paid plus additional benefits such as car allowance, golf membership, etc. The Employment Agreement required that Mr. Rodgers purchase shares in CEVA which cost him $102,330.85. He was also required to sign a Shareholders Agreement containing a clause restricting the disposition of shares without the consent of the Company. The Employment Agreement also contained the following termination clause which at law did not limit CEVA’s liability to Mr. Rodgers upon termination:
“Your employment may also be terminated by our providing you notice, pay in lieu of notice, or a combination of both, at our option, based on your length of service and applicable legal requirements”
In June, 2012, the Company terminated Mr. Rodger’s employment without cause and paid him 2 weeks’ salary in lieu of notice, severance pay in the amount of $5,307.72 plus outstanding vacation pay. At the time of termination, Mr. Rodgers was 55 years of age with less than 3 years of service with CEVA. When Mr. Rodgers enquired about his investment in the Company, he was advised that there was no way to exit the plan and that his investment would remain with the Company.
Mr. Rodger’s commenced an action for wrongful dismissal in the Ontario Superior Court of Justice. The Court considered numerous factors in assessing an appropriate notice period:
The Court concluded that the appropriate notice period was 14 months. In addition to his age and position, the other two key factors relied upon to conclude a 14-month notice period was appropriate notwithstanding short term employment, were the fact that he had to buy shares in CEVA which “intended to create the impression in the mind of the plaintiff that by accepting employment with the defendant he would have a degree of job security beyond what would normally be anticipated”. The other factor being that he was induced to leave his secure employment with another employer to join CEVA.