



COURT OF APPEAL FOR ONTARIO

CITATION: Roberts v. Zoomermedia Limited, 2017 ONCA 327

DATE: 20170424

DOCKET: C61944

Sharpe, Lauwers and Miller JJ.A.

BETWEEN

Bill Roberts

Plaintiff (Respondent)

and

Zoomermedia Limited

Defendant (Appellant)

Todd Weisberg, for the appellant

James Renihan, for the respondent

Heard: December 22, 2016

On appeal from the judgment of Justice Paul M. Perell of
    the Superior Court of Justice, dated March 4, 2016, with reasons reported at
    2016 ONSC 1567.

B.W. Miller J.A.:

Background and decision below

[1]

The respondent was employed as President and CEO of the appellants
    television division. The terms of employment were set out in a fixed term
    contract dated November 1, 2007 and amended June 11, 2009 (the Employment
    Agreement). The Employment Agreement provided that on the expiry of the fixed
    term on October 31, 2011, the respondent would be entitled to a lump sum
    severance payment, equivalent to two years salary, as well as a 6-month paid
    sabbatical to be arranged by the appellant and begin on November 1, 2011 or
    another mutually agreed date.

[2]

There were frequent attempts to renegotiate the Employment Agreement, particularly
    as its expiry drew near. The motion judge found that the parties were not able
    to come to an agreement, and that the Employment Agreement was never amended
    after June 11, 2009. On October 31, 2011, the Employment Agreement expired.
    That was not the end of the respondents employment with the appellant,
    however, which continued after this date as a common law employment
    relationship. The respondent carried on with his duties, and the parties
    carried on negotiating towards a new written contract.

[3]

The parties did not make arrangements for the respondents sabbatical. Over
    the course of the post-expiry negotiations, the appellant refused to make the
    severance payment, and took the position that the respondent had waived his
    entitlement to a sabbatical. The respondent disagreed. Eventually, the
    respondent advised the appellant that he would commence legal proceedings by
    January 20, 2012 if his claim for severance and the sabbatical were not
    resolved.

[4]

Negotiations broke down. On March 1, 2012, the appellant gave notice that
    it was terminating the respondents employment, effective October 31, 2012. The
    respondent was given 8-months working notice, and a 2-month severance package. The
    appellant took the position that the respondent was not entitled to the 2-year
    severance payment or the sabbatical provided under the Employment Agreement. The
    respondent brought an action for breach of contract.

[5]

The respondent was granted summary judgment for breach of the Employment
    Agreement. The motion judge found the appellant liable to pay the respondent damages
    for the 2-year severance payment ($490,000) and for payment in lieu of the
    sabbatical ($150,000).

Issues on appeal

[6]

Although the appellant raised several grounds of appeal, only two were
    pursued in oral argument. The appellant argues that the motion judge erred in failing
    to find that: (1) the respondent had waived his entitlement to a sabbatical
    under the Employment Agreement; and (2) the severance provision of the
    Employment Agreement was invalid.

Issue 1: Waiver of the sabbatical

[7]

The appellant argues that the motion judge erred in not finding that the
    respondent waived his entitlement to a sabbatical. The argument, which was
    rejected by the motion judge, is that over the course of the pre-expiration negotiations
    to extend the Employment Agreement, the parties reached an agreement that the
    respondent would forego his entitlement to the sabbatical. Once this resolution
    was achieved, the appellant says, the sabbatical dropped off the agenda and the
    parties focussed on other terms, such as salary and the 2-year severance payment.
    The sabbatical entitlement no longer featured in memoranda or draft agreements.
    This is evidence, the appellant argues, that the question of the sabbatical had
    been settled definitively: the respondent waived it in consideration of other
    benefits, such as an increase in salary. This waiver of the sabbatical exists
    independently, the appellant argues, of the failed negotiations for a new
    employment contract.

[8]

The motion judge rejected this argument, and made no error in doing so.
    He found, on the evidence before him, that the parties did not come to an
    agreement. The respondent may have been willing, in the course of negotiations
    towards a new employment contract, to forego the sabbatical. But the appellant cannot
    convert a provisional bargaining position into a valid waiver.

[9]

The appellant further argues that the motion judge erred in finding that
    the appellant breached the sabbatical obligation. The contractual obligation
    was for the appellant to facilitate a six-month sabbatical  through Massey
    College (or similar mutually acceptable institution). The appellant argues
    that there was no breach, as the respondent never made any arrangements with
    the appellant to take the sabbatical.

[10]

The motion judge made no error in finding the appellant to be in breach
    of this obligation. On the expiry of the Employment Agreement, the appellant
    took the position that the respondent had waived his entitlement to a
    sabbatical. The appellant was abundantly clear that it refused to fund or
    otherwise facilitate a sabbatical to which, it believed, the respondent was not
    entitled. In the face of such a refusal, it would be pointless to require the
    respondent to tender a logistical proposal as to how and where he would spend the
    sabbatical.

[11]

The motion judge made no error in awarding damages for this breach.

Issue 2: Invalidity of the severance provision

[12]

The appellants second ground of appeal is that the motion judge erred
    by not giving effect to the argument that the termination clause of the
    Employment Agreement, which contains within it the severance provision,
    contravenes s. 61(1) of the
Employment Standards Act
,
2000
,
    S.O. 2000, c. 41 (the 
ESA
), and is therefore void. The appellants
    argument is that s. 9.2 of the Employment Agreement, which provides entitlements
    in the event of early termination without cause, is void because it contravenes
    s. 61(1) of the
ESA
by expressly excluding entitlement to short-term
    and long-term disability benefits during the statutory notice period. Furthermore,
    the appellant argues, the invalidity of s. 9.2 entails that article 9 must be invalid
    in its entirety, including s. 9.1, which is the source of the appellants entitlement
    to the contractual 2-year severance payment.

[13]

The relevant sections of the Employment Agreement are as follows:

8. Termination

8.1 Notice

The Executives employment may be terminated prior to the end
    of the term at any time:



(c) by the Company, for any reason other than Just Cause
    (Termination Without Cause), at any time without prior notice and without
    further obligation to the Executive other than those obligations of the Company
    pursuant to section 9;

9. Rights of the Executive on Termination and Lump Sum Payment

9.1 Where the Executives employment under this Agreement has
    been terminated under section 8.1(c),
or upon the expiration of the Term
,
    the Executive shall be entitled to receive from the Company, in addition to
    accrued but unpaid Salary and bonus, including bonus remuneration, if any, and
    any entitlement in respect of vacation as contemplated by section 7, a lump sum
    payment equivalent to two (2) years Salary, less statutorily required
    deductions (the Severance Payment). The Severance Payment shall be paid by
    the Company to the Executive within 30 days after the effective date of
    termination, or by such other arrangement as may be mutually agreed upon and
    shall be in full satisfaction of any and all entitlements that the Executive
    may have to notice of termination or payment in lieu of such notice, severance
    pay, and any other payments to which the Executive may otherwise be entitled
    pursuant to any applicable law.

9.2 Where the Executives employment under this Agreement has
    been terminated under section 8.1(c), the Executive shall continue to receive
    the Benefits described in paragraph 1 of Schedule A, other than Long Term and
    Short Term Disability until October 31, 2011 or until the expiry of two (2)
    years after the effective date of termination, whichever is first, or such
    later date as may be required by the relevant legislation. Notwithstanding the
    foregoing, the Executive shall notify the Company if similar benefits are
    sourced from an alternative provider during that period, at which time the
    Companys obligation to continue the Benefits shall cease. On termination for
    any other reason, all Benefits shall cease at the effective date of termination
    or such later date as may be required by the relevant legislation.

[Emphasis added.]

[14]

There is an important asymmetry between sections 9.1 and 9.2 as a result
    of the June 11, 2009 amendment. Section 9.2, the impugned provision, applies
    only when employment is terminated by the employer in accordance with s. 8.1(c).
    That is, it only applies in the event of a termination by the employer, without
    cause, prior to the end of the term of the Employment Agreement. Although
    section 9.1 originally had the same precondition, it was amended in 2009. The
    result of the amendment was that the entitlement to the severance payment would
    no longer be conditional on early termination, but would be provided
    automatically at the end of the term of the Employment Agreement.

[15]

The respondent argues that because the Employment Agreement was not terminated
    by the appellant prior to the end of term, s. 9.2 has no application to the
    dispute between the parties, and the court need not address whether it
    infringes the
ESA
. The appellant argues, however, that if s. 9.2 is
    void, than the entirety of article 9 must be void as well, relieving the
    appellant of its obligation to pay the severance payment.

[16]

I agree with the respondent. Whether s. 9.2 infringes the
ESA
is irrelevant to this action, and there is no need for this court to address
    that question. Effectively, the appellant argues that because it did not agree
    to provide the respondent with all of his statutory entitlements  entitlements
    that were conditional on an early termination, an event which never occurred 
    the respondent must therefore forfeit his contractual entitlements: contractual
    entitlements that are far greater than what either the
ESA
or the
    common law would have provided. This would be a perverse application of a
    statute that is intended to protect the interests of employees, and I would
    reject it.

Disposition

[17]

I would dismiss the appeal and award costs to the respondent in the
    amount of $9,000 inclusive of disbursements and HST.

Released: RJS  APR 24 2017

B.W. Miller J.A.

I agree. Robert
    Sharpe J.A.

I agree. P. Lauwers
    J.A.


