



COURT OF APPEAL FOR ONTARIO

CITATION:
Dawe v.
    The Equitable Life Insurance Company of Canada, 2019 ONCA 512

DATE: 20190619

DOCKET: C65540

Pepall, Trotter and
    Harvison Young JJ.A.

BETWEEN

Michael Dawe

Plaintiff

(Respondent)

and

The Equitable Life Insurance Company of Canada

Defendant

(Appellant)

Michael A. Hines and Amanda J. Hunter, for the appellant

Andrew F. Camman, Susan A. Toth and Sarah Bauer, for the
    respondent

Heard: February 4, 2019

On appeal from the judgment of Justice Donald J. Gordon of
    the Superior Court of Justice dated May 23, 2018, with reasons reported at 2018
    ONSC 3130.

Trotter J.A.:

A.

Overview

[1]

Michael Dawe was employed as a Senior Vice President with The Equitable
    Life Insurance Company of Canada (Equitable Life). After 37 years of
    employment, he was terminated without cause, following a minor dispute about
    the purchase and use of promotional sporting event tickets.

[2]

Mr. Dawe sued for wrongful dismissal. Both parties moved for partial
    summary judgment on two issues relating to the calculation of damages: (1) the
    proper notice period; and (2) Mr. Dawes entitlement under Equitable Lifes
    bonus plans. Mr. Dawes other claims, including claims for punitive and moral
    damages, were left to be determined at trial.

[3]

The motion judge held that 30 months was the appropriate notice period
    and that Mr. Dawe was entitled to bonus payments over this period.

[4]

Equitable Life appeals against both holdings. It submits that the
    motion judges determination of reasonable notice was excessive. It also
    contends that the motion judge erred by failing to find that Mr. Dawes bonus
    entitlement was limited by a termination provision contained in Equitable
    Lifes bonus plans.

[5]

I would allow the appeal on the issue of notice, reducing it to 24
    months. There were no exceptional circumstances that warranted a longer notice
    period. I would dismiss the appeal as it relates to bonus entitlement. Mr.
    Dawes receipt of bonus payments was an integral part of his compensation
    package. Although I disagree with the motion judges conclusion, at para. 62,
    that the termination provision contained in each of the two bonus plans was
    unclear and confusing, I agree with his finding that the termination
    provision was unenforceable because it was imposed unilaterally and was not
    brought to Mr. Dawes attention by Equitable Life at any time before his
    termination.

B.

Background Facts

(1)

Introduction

[6]

Mr. Dawe enjoyed a successful career in insurance sales. He started his career
    in 1978 at Allstate Life Insurance Company of Canada (Allstate), when he was
    25 years old.

[7]

Equitable Life acquired Allstate in 1995. Following the acquisition, Mr.
    Dawe continued his employment at Equitable Life as an Assistant Vice President
    of Sales & Marketing. Over the years, Mr. Dawe received several promotions.
    When he was terminated without cause, he was a Senior Vice President.

(2)

The Compensation Scheme

[8]

Mr. Dawes compensation package was comprised of a base salary and a
    cash bonus, along with various other benefits. The bonus scheme changed over
    the years. According to the affidavit of Chris Brown, Senior Vice President of
    Human Resources of Equitable Life, all changes to the compensation plan were imposed
    unilaterally by Equitable Life. That is, the changes were not negotiated, nor
    was any sign off required from those affected by the changes. Mr. Dawe and other
    executives were advised of the changes and it was up to them to decide whether
    to continue to work under them, or to leave. Mr. Dawe always continued to
    work.

[9]

In 1998, Equitable Life implemented a new compensation package. It was
    designed to ensure that Equitable Lifes base salary was at the 50th percentile
    in the industry, and that its overall compensation scheme would be at the 75th
    percentile. The goal of this program was to retain good employees and make the
    company more competitive.

[10]

On
    December 10, 1998, Ronald D. Beaubien, who was President and CEO of Equitable
    Life at the time, sent a letter to Mr. Dawe in which he said, I am pleased to
    advise you of some positive changes to your total compensation package. Mr.
    Beaubien outlined some of the positive features of the plan. He also warned of
    the restrictive term that provided that, in order to participate in the plan,
    an employee must be in the employ of the company at the time the pay is
    processed.

[11]

In
    2006, Equitable Life introduced two new bonus plans  the Long Term Incentive
    Plan (LTIP) and the Short Term Incentive Plan (STIP). On March 29, 2006, Ron
    Beettam, President and CEO of Equitable Life, sent a memo to Mr. Dawe, advising
    him of the new plans. The memo enclosed [p]lan details with respect to the Long
    Term Incentive Program. The memo provided a brief explanation of how bonuses
    would be calculated. The STIP was introduced shortly after the LTIP. As
    discussed below, the plans introduced new provisions that substantially limit employees
    bonus entitlements in circumstances of resignation, termination for cause,
    retirement, death, and termination without cause. In cases of termination
    without cause, the plans provide for a Terminal Award pro-rated to the last
    day of active employment, and require that the employee sign a Full and Final
    Release in order to receive the Terminal Award.

[12]

Mr.
    Dawe said that he had no recollection of receiving copies of the two new plans.
    Mr. Beettam claimed that he delivered copies of the plans by hand to Mr. Dawe,
    and continued to do so each year a change was made to the LTIP. Mr. Beettam and
    Mr. Brown provided evidence that the STIP was available on the company intranet.
    The motion judge observed, at para. 44, that there is no record, electronic or
    otherwise, confirming delivery of the plans. Nevertheless, he concluded that it
    was more likely than not that the plan documents were delivered to Mr. Dawe:
    at para. 45.

[13]

One
    thing is not in dispute  there was nothing in the documentation accompanying
    these plans that highlighted the introduction of the termination provision that
    is in dispute in this case.

[14]

Mr.
    Brown swore that a meeting of senior executives was held on March 30, 2006 to
    review the terms of the LTIP and STIP. Mr. Brown said that those in attendance
    were permitted to ask questions about the plans. However, supporting documentation
    that a meeting ever took place was slim, and there was no confirmation that the
    termination provision was discussed.

[15]

In
    an attempt to prove that Mr. Dawe was aware of the termination provision, Equitable
    Life produced a number of memoranda from Mr. Beettam to Mr. Dawe concerning his
    yearly bonus. In each of these memos,
[1]
Mr. Beettam advised Mr. Dawe of his bonus payment and how it was calculated, as
    well as his revised base salary. None of these memos referenced the
    consequences of termination. However, the memos indicated that details of the
    STIP plan could be found on the companys intranet, and one of the memos
    referenced that the LTIP document was attached.

[16]

The
    motion judge found that Mr. Dawe had received bonus payments under both plans since
    2006, except for 2011 or 2012, when Equitable Life experienced unexpected
    losses resulting from a fraudulent scheme undertaken by some brokers. In that year,
    both Mr. Dawe and Mr. Beettam did not receive an STIP payment and their LTIP entitlements
    were reduced. In 2015, the last year that Mr. Dawe was employed at Equitable
    Life, his base salary was $249,000. In February of 2015, he received his bonus
    for 2014 in the amount of $379,585.

(3)

The Termination of Mr. Dawes Employment

[17]

Mr.
    Dawes employment with Equitable Life was terminated in October 2015. In his
    affidavit, Mr. Dawe described an increasingly strained relationship with Mr. Beettam.
    Mr. Dawe made notes of some of his negative experiences. For his part, Mr.
    Beettam reported a friendly relationship with Mr. Dawe, describing many
    occasions when he and his wife would socialize with Mr. Dawe and his wife.

[18]

Things
    came to a head in September 2015. A dispute arose over the purchase of hockey
    and basketball tickets by Mr. Dawe for promotional and personal use. For the
    purposes of determining the issues on appeal, it is not necessary to review the
    various accounts of this conflict. Suffice to say, during a meeting between the
    two men, Mr. Beettam verbally reprimanded Mr. Dawe for purchasing tickets
    without proper authorization. Mr. Dawe became very agitated during the meeting
    and requested that Mr. Brown and an in-house lawyer join the meeting. Mr.
    Beettam could only locate Mr. Brown, who joined the meeting.

[19]

Mr.
    Beettam and Mr. Brown said that Mr. Dawe requested an exit strategy or plan.
    Mr. Brown said that Mr. Dawe wanted the company to offer him a severance
    package. Mr. Dawe said in his affidavit, I did suggest we look at ways to
    disengage my employment from Equitable. I was upset that my integrity was being
    questioned and precipitously felt that I might have no choice but to leave.

[20]

Mr.
    Dawe took a few days off. He consulted a lawyer. Negotiations over a severance
    package ensued. At this time, Mr. Dawe alleged that he had been harassed and
    bullied by Mr. Beettam. When asked for further details, Mr. Dawe provided handwritten
    notes concerning two incidents beyond the hockey ticket incident. One note
    referenced a heated discussion between the two men in 2010, and the other note
    referenced a meeting in 2013 in which Mr. Beettam was allegedly acting
    aggressively toward Mr. Dawe, and raised his voice. Mr. Dawes lawyer refused
    to provide further details at the time. No agreement was reached on Mr. Dawes
    terms of departure.

[21]

Equitable
    Life ultimately determined that Mr. Dawes future employment with the company
    was untenable. His employment was terminated on October 8, 2015, effective the
    following day. Mr. Dawe rejected an offer of 24 months notice and the Terminal
    Awards under the LTIP and STIP. His combined Terminal Award payments under both
    plans amounted to a little over $400,000. The termination letter included a
    requirement to sign a release of claims. Mr. Dawe refused to sign the release
    and payment of the Terminal Awards was withheld. However, despite his refusal
    to sign the release, Mr. Dawe was paid eight weeks of termination pay in lieu
    of notice, as well as twenty-six weeks of severance pay in accordance with the
    provisions of the
Employment Standards Act, 2000
, S.O. 2000, c. 41 (
ESA
).

[22]

Mr.
    Dawe was 62 years old when he was terminated. He had worked with
    Allstate/Equitable Life for 37 years  his entire career. As Mr. Dawe said in
    his affidavit, he planned to work until he turned 65 years old, roughly 30
    months after his termination date.

C.

Issues on Appeal

[23]

The
    appellant raises the following grounds of appeal: (1) the motion judge
    improperly dealt with contested facts that were irrelevant to the issues before
    him; (2) the motion judge erred in finding that the appropriate notice period was
    30 months; and (3) the motion judge erred in finding that Mr. Dawe was entitled
    to his full LTIP and STIP bonus payments during the notice period, instead of
    the Terminal Awards.

D.

analysis

(1)

Consideration of Facts Irrelevant to the Issues

[24]

As
    noted above, both parties moved for partial summary judgment, restricted to the
    issues of the notice period and Mr. Dawes bonus entitlement. Mr. Dawes other claims,
    including claims for punitive and moral damages were left by the parties for
    another day.

[25]

In
    his reasons, the motion judge referred to facts that were arguably relevant to
    these other claims, but were irrelevant to reasonable notice and bonus
    entitlement. For example, in his description of the events that led to Mr.
    Dawes dismissal, the motion judge was critical of Equitable Life. Referring to
    the cost to Equitable Life as a result of what he considered to be such a
    minor dispute, the motion judge said, at para. 25: The shareholders would not
    be impressed, assuming they were made aware of this case. The triggering event
    did not warrant a verbal reprimand. Management could have done better.

[26]

At
    another point in his reasons, at para. 28, he referred to serious issues
    regarding managements conduct and questioned whether the termination was a
    planned event over a period of time. However, he said, at para. 29: This
    evidence will be relevant only to the remaining claims to be determined at
    trial. The events referred to have no part in this motion and are not
    considered in this decision.

[27]

Equitable
    Life submits that these findings were unrelated to the issues at hand and give
    the appearance of having influenced the decisions regarding notice and the STIP
    and LTIP incentive plans that followed.

[28]

I
    agree that the motion judges comments were not necessary to the issues he was
    tasked with deciding. Nevertheless, while these comments were better left
    unsaid, I am not persuaded that they had any influence on the motion judges
    findings on the substantive issues before him.

[29]

I
    would dismiss this ground of appeal.

(2)

The Notice Period

[30]

Equitable
    Life argues that the motion judge erred in determining that 30 months was the
    proper notice period and that, based on this courts authorities, the notice
    period should have been 24 months. I agree.

[31]

The
    motion judge was aware of this courts jurisprudence on damages for wrongful
    dismissal. At para. 30, he referred to the leading decision of
Lowndes v.
    Summit Ford Sales Ltd.
(2006), 206 O.A.C. 55 (C.A.). Writing for the court,
    Cronk J.A. observed in
Lowndes
, at para. 11, that the determination of
    what constitutes reasonable notice is case-specific and, while there is no absolute
    upper limit or cap on what constitutes reasonable notice, generally only
    exceptional circumstances will support a base notice period in excess of 24
    months. Cronk J.A. found, at paras. 13-16, that Mr. Lowndes had not
    established that his circumstances were exceptional, warranting a notice period
    exceeding 24 months.

[32]

This
    court has followed the
Lowndes
approach over the years. The
Lowndes
approach
    was endorsed in
Keenan v. Canac Kitchens Ltd.
, 2016 ONCA 79, 29 C.C.E.L.
    (4th) 33, at para. 30. In
Keenan
, the court declined to set aside an
    award of 26 months notice, finding that the plaintiffs, who were husband and
    wife, had established exceptional circumstances, based on their ages at the
    time of termination (63 and 61 years old), their lengthy service (32 and 25
    years), and the character of the positions they held.

[33]

In
Strudwick v. Applied Consumer & Clinical Evaluations Inc.
, 2016 ONCA
    520, 349 O.A.C. 360, at para. 42, the court cited
Lowndes
and
Keenan
in
    affirming that reasonable notice is determined on a case-specific basis, and
    while there is no cap, generally only exceptional circumstances will support a
    base notice period in excess of 24 months. The court refused to increase a base
    notice period of 20 months.

[34]

In
    this case, the motion judge took a different approach. His conclusion that a
    notice period of 30 months was appropriate did not rest on the presence of
    exceptional circumstances; instead, it was based on his perception of broader
    social factors that led him to conclude that the presumptive standards
    discussed in
Lowndes
were inapplicable. The motion judge said the
    following, at para. 31:

Whether it is exceptional circumstances or recognizing a
    change in society's attitude regarding retirement
, the particular
    circumstances of the former employee must be considered. For many years, the
    usual retirement age was considered to be 65. Pension plans improved as a result
    of the labour movement, introducing, for example, an 80 factor for most
    employees in the public sector and many in large companies in the private
    sector. That lead [
sic
] to some individuals retiring between the age of
    50 and 60. But many were not ready to fully retire. They sought out additional
    employment or simply continued to work in their existing position.
Further,
    mandatory retirement was abolished in 2006 in Ontario to protect against age
    discrimination. Many employees have continued past 65.
In result, it is
    important to recognize that each case is unique.
Presumptive standards no
    longer apply
. See, for example:
Filiatrault v. Tri-County
    Welding Supplies Ltd.
,
2013 ONSC 3091
, at
    paras. 54 and 59. [Emphasis added.]

[35]

The
    motion judge considered that Mr. Dawe was 62 years old when he was terminated
    from a very senior position, at a company he had served for 37 years. He said
    that Mr. Dawe had made no decision as to when retirement would occur, adding
    that he was committed to working at Equitable Life until at least age 65 and
    it was more likely he would have worked there to a later age than an earlier
    one: at para. 35. The motion judge placed Mr. Dawe at the extreme high end
    of each of the factors set out in
Bardal v. Globe and Mail Ltd.
, [1960]
    O.W.N. 253 (H.C.), and said, at para. 36, I would have felt this case
    warranted a minimum 36 month notice period. In finding that Mr. Dawe was
    entitled to 30 months notice, the motion judge ensured that Mr. Dawe would be fully
    compensated just beyond his 65th birthday.
[2]

[36]

The
    motion judges approach to reasonable notice was in error. First, he should
    have applied the
Lowndes
line of authority instead of relying on his own
    perceptions of the change in societys attitude regarding retirement: at
    para. 31. There was no basis in the record for making such sweeping statements.

[37]

As
    the motion judge observed, mandatory retirement was abolished in Ontario in 2006:
    see
Ending Mandatory Retirement Statute Law Amendment Act, 2005
, S.O.
    2005, c. 29 (previously known as Bill 211). But this legislative initiative
    would have been known at the time of the
Lowndes
appeal, which was
    decided after Bill 211 was enacted, but before most of its provisions came into
    force.
[3]


[38]

Further,
    more recent authorities from this court have not altered the approach in
Lowndes
.
Keenan
and
Strudwick
were decided a decade after
Lowndes
. Neither
    decision suggests that the end of mandatory retirement in Ontario ought to
    alter the traditional approach to determining reasonable notice. It was not
    open to the motion judge to chart his own course in light of these authorities.

[39]

It
    is unclear why the motion judge chose to rest his reasonable notice
    determination on mandatory retirement considerations. It was irrelevant to Mr.
    Dawes situation. In his affidavit, Mr. Dawe swore that he planned to retire at
    age 65. There was no basis in the evidence to find that he would have worked
    later.

[40]

In
    any event, Mr. Dawes plans regarding retirement are not determinative in
    ascertaining Equitable Lifes obligations towards him. In
Strudwick
,
    this court rejected Ms. Strudwicks submission that in the circumstances, she
    was entitled to pay and benefits up to the age of 65, when she would retire.
    Epstein J.A. noted that absent a fixed term contract, an employer does not
    guarantee employment to retirement: at para. 45. She further held that in
    entering the employment relationship, an employer cannot reasonably be seen as
    having accepted the risk that in dismissing an employee, it would be obligated
    to pay that employee until their retirement: see paras. 46-48.

[41]

The
    motion judges reasons suggest that he viewed this case as being tantamount to
    forced retirement: see paras. 34, 36. However, the record is clear that, in
    the throes of a conflict with his senior executive colleagues, Mr. Dawe
    initiated the process of his own departure from Equitable Life. He requested an
    exit strategy. While Mr. Dawe may have soon come to regret his decision, this
    factor ought to have weighed against a finding that this case involved
    exceptional circumstances justifying a notice period in excess of 24 months.

[42]

I
    agree with the motion judge that Mr. Dawes circumstances  including his
    senior position, career-long years of service at the same company, age at the
    time of termination, and his difficulty in finding new employment  warranted a
    substantial notice period. However, there was no basis to award Mr. Dawe more
    than 24 months notice.

[43]

Mr.
    Dawes circumstances are similar to those of the employee in
Lowndes
.
    Mr. Lowndes

was 59 years old at the time his employment was terminated.
    He had worked for the appellant employer for approximately 28 years, and held a
    management and director position at the time of termination. In concluding that
    exceptional circumstances had not been established, Cronk J.A. recognized Mr.
    Lowndes status as a long-term employee who had exhibited loyalty and
    dedication to the employers business over most of his working career. However,
    she noted that the base notice period of 24 months recognizes and rewards
    these factors, and constitutes the high end of the appropriate range of
    reasonable notice for long-term employees in [Mr. Lowndes] position: at para.
    15.

[44]

I
    would allow this ground of appeal and reduce the notice period to 24 months.

(3)


Damages for Bonus Entitlement

[45]

Equitable
    Life appeals the motion judges finding that Mr. Dawe was entitled to damages as
    compensation for the loss of his bonus entitlements during the notice period. The
    motion judge determined that the bonus payments under the LTIP and STIP were an
    integral component of Mr. Dawes compensation, giving rise to a common law
    right of payment during the notice period. The motion judge found that this
    common law right was not displaced by the terms of the plans for three reasons.
    First, he found that the terms of the plans that purported to limit entitlement
    to the payment of the bonuses were ambiguous and unenforceable. Second, he
    found that these terms were not brought to Mr. Dawes attention and Equitable
    Life did not meet its obligation to communicate these terms of employment to
    Mr. Dawe. Finally, the motion judge was of the view that Equitable Lifes
    requirement that Mr. Dawe sign a release contravened the
ESA
.

[46]

In
    my view, when read in context, the terms of the bonus plans are unambiguous,
    and the termination provision would have been enforceable against Mr. Dawe had it
    been brought to his attention. However, as explained below, there was an
    evidentiary basis which entitled the motion judge to conclude that the
    termination provision had not been brought to Mr. Dawes attention and was unenforceable
    for this reason.

(a)

Common Law Entitlement to the Bonus Payments

[47]

Before
    the motion judge, Equitable Life argued that its bonus plans were completely
    discretionary. This was offered as a reason for not paying Mr. Dawe what he
    would otherwise have been entitled to under the STIP and LTIP during the
    applicable notice period. The motion judge ultimately rejected this position,
    at para. 52 of his reasons. This finding was not specifically challenged by
    Equitable Life on appeal; nor was Mr. Dawes common law entitlement expressly
    acknowledged.

[48]

Damages
    for wrongful dismissal generally include all compensation and benefits that the
    employee would have earned during the notice period:
Paquette v. TeraGo
    Networks Inc.
, 2016 ONCA 618, 352 O.A.C. 1, at para. 16. This amount may
    include bonus payments that the employee would have been entitled to had they
    continued to be employed during the notice period: at para. 17. In
Paquette
,
    at paras. 30-31, this court articulated a two-part test for determining whether
    a wrongfully dismissed employee is entitled to damages for the loss of bonus
    entitlement: (1) was the bonus an integral part of the employees compensation
    package, triggering a common law entitlement to damages in lieu of bonus?; and
    (2) if so, is there any language in the bonus plan that would specifically
    remove the employees common law entitlement? See also:
Lin v. Ontario
    Teachers Pension Plan
, 2016 ONCA 619, 352 O.A.C. 10, at paras. 84-86;
Singer
    v. Nordstrong Equipment Limited
, 2018 ONCA 364, 47 C.C.E.L. (4th) 218, at
    paras. 21-22;
Bain v. UBS Securities Canada Inc.
, 2018 ONCA 190, 46
    C.C.E.L. (4th) 50, at para. 9.

[49]

The
    motion judge correctly applied the first part of the
Paquette
test in finding
    that Equitable Lifes bonus plans were an integral part of Mr. Dawes
    compensation package. The motion judge identified the relevant factors involved
    in making this determination, including Mr. Browns evidence concerning the competitive
    objectives of the compensation scheme as a whole, and the integral nature of
    the LTIP and STIP to the compensation scheme. The motion judge was aware of Mr.
    Dawes history of having received a bonus every year he was employed (except
    once in 2011 or 2012, the same year that Mr. Beettam did not receive a bonus). Moreover,
    as the motion judge observed, the purpose of the LTIP was described in the plan
    document as an integral component of Equitables executive cash compensation
    strategy consisting of a base salary program, short term (annual) incentives
    and long term incentives. Similar language is also found in the STIP.
[4]

[50]

On
    this record, the motion judge was entitled to conclude that the payment of
    bonuses was an integral component of Mr. Dawes compensation, giving rise to a
    common law entitlement to damages in lieu of bonus. This conclusion leads to
    the second part of the
Paquette
test  whether the common law
    entitlement was altered or removed by the language of the bonus plans.

(b)

The Termination Provision

[51]

Equitable
    Life argued that, at the time of his termination, Mr. Dawes entitlement to
    bonus payments was specifically limited by the terms of the LTIP and STIP. The
    motion judge considered the terms of the plans and found that the language
    used in the LTIP and STIP does not meet the requirement of an unambiguous
    alteration of Mr. Dawes common law entitlement. Simply put, the wording is
    unclear and confusing: at para. 62. As explained below, I disagree with the
    motion judges conclusion on this issue. I agree with the appellant that, in reaching
    this conclusion, the motion judge failed to read the plan documents as a whole,
    and instead applied a piecemeal approach by considering each relevant provision
    sequentially without regard to their combined effect: see
Sattva Capital
    Corp. v. Creston Moly Corp.
, 2014 SCC 53, [2014] 2 S.C.R. 633, at para. 47;
Amberber v. IBM Canada Ltd.
, 2018 ONCA 571, 424 D.L.R. (4th) 169, at
    paras. 47-50.

[52]

In
    order to determine whether the plans limited Mr. Dawes common law entitlement,
    it is necessary to take a closer look at the terms of the plans individually
    and in combination. During their submissions, counsel focused on the wording of
    the LTIP provisions which are substantially similar to the parallel STIP
    provisions. I will do the same.

[53]

The
    plan is eight pages long. It employs highly technical language in explaining how
    the bonus scheme works.

[54]

The
    key part of the document for the purposes of this appeal is IX. Administrative
    Processes. In this part, an Eligible Participant is defined as someone
    employed by the Corporation on the date an award is paid in order to receive
    an award. Eligible Participants who resign or who are terminated with cause
    forfeit all rights under the Plan including any awards earned but not yet paid
     and no award or pro-rated awards shall be paid.

[55]

The
    plan provides for Terminal Awards in circumstances of retirement, death, and
    termination for cause. Terminal Awards are essentially pro-rated awards,
    determined by a complicated calculation set out in term IX.C.(a)(iv).

[56]

The
    provision at the heart of this appeal is IX.C.(a)(iii) (i.e. the termination
    provision), which provides for Terminal Awards in circumstances of termination
    without cause, as follows:

Termination without Cause: An Eligible Participant terminated
    without cause
will be entitled to receive only Terminal Awards calculated in
    sub-paragraph (a)(iv) (below), pro-rated to the last day of active employment,
regardless of whether notice of termination is given or not given and
regardless
    of whether the termination is lawful or unlawful, and only if the Eligible
    Participant provides the Corporation with a Full and Final Release in the
    manner required in the Eligible Participants termination letter
. [Emphasis
    added.]

For greater certainty, term IX.D, titled Restrictions,
    provides:

a)

Awards earned and
    awards actually paid shall not be considered in determining any entitlement to
    termination, severance or common law notice or payments in lieu of notice. Upon
    termination without cause and with or without notice, the Eligible
    Participants only entitlements under this Plan shall be the Terminal Awards
    set out in section IX C.(a)(iv) (above).

[57]

In
    analyzing the combined effect of these provisions, I start with this courts
    decision in
Paquette
. Similar to this case, the issue in
Paquette
was
    whether the employee was entitled to claim wrongful dismissal damages for bonus
    payments he would have earned during the notice period following his
    termination without cause. In
Paquette
, the motion judge found that a
    term of the bonus plan that required that a person must be an active employee
    was clear and unambiguous and, therefore, disentitled the employee to any bonus
    entitlement upon being terminated without cause. I note that the active
    employee term in the bonus plan at issue in
Paquette
is similar to the definition
    of Eligible Participant in this case quoted in para. 54 above.
[5]


[58]

This
    court allowed the appeal. Writing for the court, van Rensburg J.A. determined
    that the motion judge had taken the wrong approach. She held, at para. 21, that
    the issue was not whether the employee was entitled to access bonus
    entitlements in accordance with the terms of the plan upon termination;
    instead, the question was whether he was entitled to damages comprised of the compensation
    and benefits that he would have been entitled to had he not been wrongfully
    dismissed: see also
Taggart v. The Canada Life Assurance Company
(2006),
    39 C.C.E.L. (3d) 48 (Ont. C.A.), at paras. 11, 16.

[59]

Moreover,
    van Rensburg J.A. stated that, had the employee been permitted to work through
    the reasonable notice period, he would have been actively employed and, under
    the terms of the plan, entitled to bonus payments:
Paquette
,

at
    para. 21. An employee who receives payment in lieu of reasonable notice stands
    in the same position:
Paquette
,

at para. 26;
Taggart
, at
    para. 16. Accordingly, the employer was not permitted to exploit the actively
    employed term by not permitting the employee to work through the reasonable
    notice period.

[60]

Mr.
    Dawe stands in the same position in this case. Kimberly Oliver, Senior Consultant,
    Executive Compensation at Willis Towers Watson, provided evidence on the
    summary judgment motion. Willis Towers Watson is regularly retained by
    Equitable Life to design competitive executive compensation packages. Ms.
    Oliver acknowledged that, had Mr. Dawe worked through his notice period, he
    would have been entitled to normal (i.e., non-Terminal Award) payments under
    the LTIP and STIP.

[61]

Citing
Paquette
, the motion judge held, at para. 61, that the first provision reproduced
    above requiring that an Eligible Participant must be employed by the
    Corporation on the date an award is paid in order to receive an award, was
    unenforceable. The motion judge found the remainder of the provisions
    reproduced above (terms IX.C.(a)(iii) and IX.D) to be too imprecise to oust Mr.
    Dawes bonus entitlements. I disagree.

[62]

As
    van Rensburg J.A. said in
Paquette
, at para. 31, [t]he question is not
    whether the contract or plan is ambiguous, but whether the wording of the plan
    unambiguously alters or removes the appellants common law rights. See also
Taggart
,
    at paras. 12, 19-20. In my view the LTIP and STIP do so limit Mr. Dawes
    entitlement.

[63]

This
    case is similar to
Kieran v. Ingram Micro Inc.
(2004), 189 O.A.C. 58
    (C.A.), a case dealing with an employees entitlement to stock options upon
    termination. Mr. Kieran had been dismissed without cause. The stock option plans
    provided that he had 60 days from the termination date to exercise any option rights
    then vested. The plan defined termination of employment as the date the
    employee ceases to perform services for the employer without regard to
    whether the employee continues thereafter to receive any compensatory payments
    therefrom or is paid salary thereby in lieu of notice of termination. Among
    other things, the motion judge determined that the language of the plans
    prevented Mr. Kieran from exercising his stock options.

[64]

This
    court dismissed Mr. Kierans appeal. Lang J.A. wrote, at para. 58 of
Kieran
,
    that there were no ambiguities in the terms of the plans. Recognizing that
    prior cases had found that general language such as cessation of employment
    may create ambiguity, Lang J.A. was satisfied that the wording of the plans in
    question did not. In
Paquette
, van Rensburg J.A. referred to
Kieran
and observed, at para. 43, that there was no ambiguity because the plans in
Kieran
did not speak only of termination or cessation of employment generally, [r]ather,
    the plans anticipated the very event that occurred  the termination of
    employment without just cause or notice.

[65]

In
    this case, the LTIP and the STIP went well beyond stipulating active
    employment as a precondition for bonus entitlement. The terms reproduced above
    address, with great precision, what happens to an eligible participants bonus
    entitlement upon termination without cause. To repeat the words of van Rensburg
    J.A. in
Paquette
, the LTIP and STIP anticipated the very event that
    occurred  Mr. Dawes dismissal without cause. This language unequivocally restricted
    his common law rights upon termination. The motion judge erred in finding
    otherwise. However, this does not end the inquiry. It is necessary to determine
    whether Mr. Dawe was properly informed of the termination provision unilaterally
    imposed by Equitable Life.

(c)

Was the Termination Provision Properly Communicated?

[66]

Equitable
    Life acknowledges that it unilaterally imposed changes to its compensation plan
    over the years, leaving its employees with the choice of accepting any new terms,
    or deciding to leave the company. This is consistent with the legal
    implications of unilateral changes to employment contracts.

[67]

The
    motion judge referred, at para. 56, to
Wronko v. Western Inventory Service
    Ltd.
, 2008 ONCA 327, 90 O.R. (3d) 547, at paras. 33-36, leave to appeal
    refused, [2008] S.C.C.A. No. 294, in which Winkler C.J.O. spoke of the three options
    available to employees in these circumstances: (1) accept the change either
    expressly or implicitly through acquiescence, thereby continuing employment
    under the newly imposed terms; (2) reject the changes and sue for damages if
    the employer insists on enforcing the new terms; or (3) notify the employer
    that the new term is rejected, leaving the employer the option of terminating
    the employee with proper notice and offering the employee re-employment on the
    new terms. See also
Lin
, at paras. 72, 75.

[68]

Equitable
    Life contends that, over the years, Mr. Dawe always acquiesced to the changes
    to the bonus plans. He readily accepted the bonuses that he received. As noted
    above, he received memos each year, explaining how his bonus had been
    calculated. Moreover, he always had access to the details of the plans, and the
    STIP plan was available on the companys intranet. Mr. Dawe denied ever having
    the termination terms of the LTIP and STIP brought to his attention. Importantly,
    Mr. Dawes position was accepted by the motion judge.

[69]

In
Paquette
, van Rensburg J.A. alluded to providing employees notice of
    adverse provisions in bonus plans. At para. 18, she said: To the extent that
    there are limitations [on the payment of the bonus], the question may arise as
    to whether they were brought to the attention of the affected employees and
    formed part of their contract of employment. However, notice was not a live issue
    in
Paquette
.

[70]

The
    issue of proper notice was squarely addressed in
Poole v. Whirlpool Corporation
,
    2011 ONSC 4100, 92 C.C.E.L. (3d) 350, affd 2011 ONCA 808, 97 C.C.E.L. (3d) 20.
Poole
involved an actively employed condition that the employer
    attempted to rely upon to limit entitlement to bonus payments. On a motion for
    summary judgment, Hoy J. (now A.C.J.O.) held, at para. 33: There is no
    evidence that Mr. Poole at any time assented to or agreed to this limitation.
    Nor is there evidence that Mr. Poole was given a copy of the 2005 Bonus Plan,
    or advised of this limitation. Simply posting the Plan on Whirlpool's Intranet,
    without more, is insufficient. This finding was upheld on appeal. This court
    affirmed that the failure to establish that the limiting condition was drawn to
    the employees attention at any time, either orally or in writing, precluded
    any reliance by the [employer] on the precondition to defeat the [employees]
    bonus claim:
Poole
, CA, at paras. 5-6.

[71]

In
    this case, the motion judge relied upon
Poole
to find that Equitable
    Life failed to bring the limiting terms of the LTIP and STIP to Mr. Dawes
    attention. He observed that there was no documentation to support Mr. Beettams
    claim that he delivered copies of both documents to Mr. Dawe. Nevertheless, the
    motion judge found that it was more likely than not that the documents were
    delivered to Mr. Dawe: at para. 45. But this was not the end of the matter. At
    paras. 46-47, the motion judge found:

However, the uncontradicted evidence is that Mr. Beettam,
    and others at Equitable made no effort to bring the forfeiture provisions to
    Mr. Dawes attention.
The various memorandums referred to only identify the
    positive aspects of the bonus plan, in particular the calculation that would result
    in payment in that particular year.

[T]he requirement is communication of the term the employer
    seeks to rely on.
I am not persuaded simply providing a copy of the plan
    document meets this standard. In essence, providing only a copy of the document
    transfers the onus to the employee of finding any negative terms of employment.
These are complex documents, drafted by lawyers, and most difficult to read and
    understand.
In my view, an employer has a duty to inform the employee of all
    expected terms of employment. That is particularly the case here as Equitable
    Life had changed the method of establishing bonus plans and was attempting to
    introduce a forfeiture clause that was not part of the prior system
.
    [Emphasis added.]

[72]

The
    motion judges conclusions are consistent with this courts decision in
Wronko
.
    Where changes are imposed unilaterally by the employer, the essence of the
    problem is whether the employee accepted the newly imposed terms of employment.
    In order to rely upon the limits created by the termination provisions,
    Equitable Life was required to prove that Mr. Dawe accepted these adverse,
    unilateral changes to an integral part of his compensation package. A
    pre-condition to acceptance is knowledge of the changes. On the record before
    the motion judge, he was entitled to find that Equitable Life failed to prove
    that Mr. Dawe knew about these changes, or that these changes were effectively
    communicated by Equitable Life to Mr. Dawe. Given the appellants obligation to
    put its best foot forward on this motion for summary judgment, the motion judge
    was entitled to assume that there would be no further evidence at trial that
    would have assisted Equitable Life on this issue: see
Bergen v. Fast Estate
,
    2018 ONCA 484, 30 M.V.R. (7th) 49, at para. 11.

[73]

I
    acknowledge that there was some evidence that may have supported a finding that
    Mr. Dawe might have been aware of the unfavourable terms in the bonus plans. After
    all, he was a Senior Vice President and was involved in the termination of
    other employees, signing termination letters that adverted to some of the same
    provisions at issue on this appeal. The motion judge found that he received
    copies of the plans. The STIP was available on the companys intranet. All of
    this evidence was before the motion judge.

[74]

Notably
    absent from the record was any direct evidence that the terms in question were
    brought to Mr. Dawes attention. As counsel for Mr. Dawe argued on appeal, had
    Mr. Beettams memo of March 29, 2006 contained one further sentence that
    referred to the termination provisions, it is quite possible that this
    litigation would never have been commenced. Alternatively, Mr. Dawe may have
    objected to the inclusions of these limitations, leading to scenarios (2) or
    (3), discussed in
Wronko
(at para. 67, above). Given how the transition of
    the bonus plans was implemented by Equitable Life, we will never know how
    things would have played out had Mr. Dawe been informed that he would be
    forfeiting large sums of money even if his employment were to be terminated
    without cause.

[75]

The
    motion judges ultimate conclusion on this issue hinges on considerations that
    are largely factual in nature. The discipline of deference requires us to
    respect his conclusion.

[76]

Accordingly,
    I would dismiss this ground of appeal. However, I would adjust the motion
    judges award to the extent that Mr. Dawes bonus entitlement is aligned with the
    notice period of 24 months, instead of 30 months, as explained above.

(d)

The
Employment Standards Act, 2000

[77]

In
    addition to his conclusions about the ambiguity of the language in the plans
    and lack of notice, the motion judge also found that Equitable Life was
    precluded from relying on the termination provision because it violated the
    provisions of the
ESA
by insisting that Mr. Dawe sign a release as a
    precondition to receiving the severance package that he was offered. Given my
    conclusion that the termination provision is unenforceable due to the lack of
    notice, it is unnecessary to address this issue to dispose of the appeal.
    However, I make the following brief comments.

[78]

In
    reaching his conclusion that Equitable Life breached the
ESA
, the motion
    judge acknowledged this courts judgment in
McNevan v. AmeriCredit Corp.
,
    2008 ONCA 846, 94 O.R. (3d) 458, in which Epstein J.A. stated, at para. 57: an
    offer of severance conditional on the execution of a release is not only
    standard but also wise corporate practice. Nevertheless, the motion judge
    found that the release in this case went too far because it required Mr.
    Dawe to give up his common law rights to receive his statutory rights: at para.
    67. He also held that the release infringed ss. 60 and 62 of the
ESA
because
    Equitable Life refused to pay the bonus during the notice period: at para. 67.

[79]

The
    motion judge provided very brief reasons for reaching these determinations that
    were largely conclusory. Assessing the correctness of both determinations would
    require reading in or assuming certain findings that were not explicitly made
    by the motion judge in his reasons. Given my conclusion on the notice issue, it
    is unnecessary to engage in such an analysis to dispose of the appeal. Accordingly,
    these reasons should not be taken as an endorsement of the motion judges
    conclusions regarding whether the release requirement contravened the
ESA
.

E.

conclusion

[80]

I
    would allow the appeal to the extent that the notice period is reduced from 30
    months to 24 months. Mr. Dawes bonus entitlement is adjusted accordingly.

[81]

If the parties cannot agree on the costs of the appeal, or
    adjustments to costs awarded on the motion, if any, they  may  make written submissions no more than five
    pages in length. The appellant shall serve and file its submissions within 10
    days of this decision. The respondent shall
    serve  file its submissions within 7 days
    of receiving the appellants submissions. No reply submissions are to be
    filed.

Released: AHY JUN 19 2019

G.T. Trotter J.A.

I agree. S.E. Pepall J.A.

I agree. A. Harvison Young J.A.





[1]

There were memos dated as follows announcing bonus
    entitlements: February 15, 2008 ($179,756.15); February 17, 2010 ($236,726);
    February 15, 2011 ($183,509.37); and February 12, 2013 ($165,691.61).



[2]

Being terminated on October 8, 2015, 30 months notice took Mr.
    Dawe to April 8, 2018, a few weeks after his 65th birthday.



[3]

Lowndes
was decided on January 6, 2006. The
Ending Mandatory
    Retirement Statute Law Amendment Act, 2005
was assented to on December 12,
    2005, but

by virtue of s. 8 of the Act, most of its
    provisions did not come into force until December 12, 2006.



[4]

The STIP plan document provides that the STIP is an integral
    component of Equitables cash compensation strategy consisting of a base salary
    program and annual variable incentives.



[5]

The active employee term required that the employee be
    actively employed by the employer at the time the bonus was paid: see
Paquette
,
    at para. 10.


