



COURT OF APPEAL FOR ONTARIO

CITATION: Battiston v. Microsoft Canada Inc., 2021 ONCA 727

DATE: 20211018

DOCKET: C68550

Benotto, Brown and Harvison Young JJ.A.

BETWEEN

Fransic Battiston

Plaintiff (Respondent)

and

Microsoft Canada Inc.

Defendant (Appellant)

Deborah Glendinning, Nancy
    Roberts and Mark Sheeley, for the appellant

Andrew Monkhouse and
    Samantha Lucifora, for the respondent

Heard: September 9, 2020 by video
    conference

On
    appeal from the judgment of Justice Mario D. Faieta of the Superior Court of
    Justice, dated July 15, 2020.

REASONS FOR
    DECISION

[1]

For almost 23 years, the respondent was employed by
    Microsoft Canada Inc. He was terminated without cause and brought an action for
    wrongful dismissal. The trial judge found that the respondent was entitled to
24
    months pay in lieu of reasonable notice less 1 percent contingency for
    re-employment during the balance of the notice period, plus a 0.7 percent
    annual merit increase, an annual cash bonus of $12,100 and stock awards.

[2]

Microsoft Canada Inc. appeals, but only with respect to
    the trial judges conclusion that the respondent is entitled to unvested stock
    awards after his termination. The appellant relies on the Stock Award Agreement
    (the Agreement) which provided that any unvested stock awards do not vest to
    an employee if employment ends for any reason.
The trial judge found
    that the termination provisions in the Agreement were not drawn to the
    respondents attention and could not be enforced because they were harsh and
    oppressive.

[3]

In oral submissions, t
he appellant raised
    several issues in support of its position:

1)

the trial judge erred in finding the termination
    provisions unenforceable as the decision was rendered prior to the Supreme
    Court decision
Matthews v. Ocean Nutrition Canada Ltd.
,
2020 SCC 26, 449
    D.L.R. (4th) 583. (In that case, the Supreme Court revised the test for whether
    bonus payments are included as part of damages in lieu of reasonable notice);

2)

the Award Agreement was a separate agreement
    that did not form part of the compensation package because it was with the
    parent company, not the appellant;

3)

the terms violate s. 60(a) or (b) of the
Employment
    Standards Act
, which precludes changes to wages during
    the notice period; and

4)

the terms of the Agreement were not brought to
    the attention of the respondent.

[4]

The appellant raised several more issues in
    written submissions:

1)

the trial judge erred in law in
    imposing a common law right to damages in respect of the unvested stock awards
    (the first step of
Matthews
);

2)

the trial judge erroneously ruled
    against the appellant after concluding that the award agreements were
    unambiguous (the second step of
Matthews
);

3)

the trial judge erred by modifying
    the legal test by adding an unfounded harsh and oppressive standard; and

4)

that policy considerations
    militate in support of allowing this appeal, including regarding differential
    treatment of employees post-termination.

[5]

We need only address one issue which is
    dispositive of the appeal: the trial judges conclusion that, because the
    respondent did not receive notice, the Agreement is unenforceable.

[6]

Each year the respondent received an email as follows:

Congratulations on your recent
    stock award! To accept this stock award, please go to
My
    Rewards
and complete the online acceptance process. A record will be
    saved indicating that you have read, understood and accepted the stock award
    agreement and the accompanying Plan documents. Please note that failure to read
    and accept the stock award and the Plan documents may prevent you from
    receiving shares from this stock award in the future.

[7]

Each year, for 16 years, the respondent confirmed that he received these
    emails. His practice was to click a box to confirm that he had read, understood
    and accepted the stock award agreement. In fact, he said that he did not read the
    Agreement and thus did not know about the termination provisions. He thought he
    would get the unvested stock if he was terminated.

[8]

The trial judge found that the Agreement unambiguously excludes the
    respondents right to vest his stock awards after he has been terminated
    without cause. However, he also found that the terms are unenforceable because
    they are harsh and oppressive and because the respondent was not given notice.
    The trial judges reasons are somewhat unclear on this issue. Although he
    states at paragraph 65 that there is no dispute that notice was not given, he
    later made a finding of fact which demonstrates that the appellant did not
    concede the issue. He said the following at paragraph 70:

I find that the termination
    provisions found in the Stock Award Agreements were harsh and oppressive as
    they precluded [the respondents] right to have unvested stock awards vest if
    he had been terminated without cause.
I also accept [the
    respondents] evidence that he was unaware of these termination provisions and
    that these provisions were not brought to his attention by Microsoft
. Microsofts
    email communication that accompanied the notice of the stock award each year
    does not amount to reasonable measures to draw the termination provisions to
    [the respondents] attention. [Emphasis added.]

[9]

This finding cannot stand because the trial judges conclusion that the
    notice provisions were not brought to the respondents attention fails to
    address the following facts:

1)

For 16 years the respondent expressly agreed to the terms of the
    agreement.

2)

The respondent made a conscious decision not to read the agreement despite
    indicating that he did read it by clicking the box confirming such.

3)

By misrepresenting his assent to the appellant, he put himself in a
    better position than an employee who did not misrepresent, thereby taking
    advantage of his own wrong: see
Berlingieri v. DeSantis
(1980), 31
    O.R. (2d) 1 (C.A.) at para. 18.

[10]

The trial judge erred by finding the respondent received no notice.

[11]

The appeal is allowed with costs in the amount of $20,000 inclusive of
    disbursements and HST. We do not interfere with the award of costs in the court
    below.

M.L. Benotto J.A.

David Brown J.A.

A. Harvison Young
    J.A.


