



COURT OF APPEAL FOR ONTARIO

CITATION: Ariss v. NORR Limited Architects & Engineers,
    2019 ONCA 449

DATE: 20190530

DOCKET: C65328

Juriansz, Brown and Roberts JJ.A.

BETWEEN

John David Ariss

Plaintiff (Appellant)

and

NORR
    Limited Architects & Engineers


Defendant (Respondent)

Alayna
    Miller
, for the appellant

Albert G. Formosa
and Caitlin Steven, for the respondent

Heard: December 4, 2018

On appeal from the order of Justice Sylvia Corthorn of
    the Superior Court of Justice, dated March 28, 2018, with reasons reported at
    2018 ONSC 620.

Roberts J.A.:

[1]

At issue on this appeal is the enforceability of terms that purport to
    waive an employees years of service, his presumptive right to reasonable
    notice under the common law, and his full entitlement to termination and severance
    pay under the
Employment Standards Act
, 2000
, S.O. 2000, c. 41
    (
ESA
).

[2]

The appellant, John David Ariss, was dismissed without cause from his
    part-time employment with the respondent, NORR Limited Architects and Engineers
    (NORR). Relying on the terms of a written employment agreement that purported
    to waive Mr. Ariss years of service and his entitlement to common law notice, on
    terminating his employment not for cause, NORR paid him the minimum entitlements
    to statutory notice and did not provide him with any severance pay.

[3]

Mr. Ariss brought an action against NORR for wrongful dismissal damages
    based on the common law principle of reasonable notice.

[4]

The motion judge, on summary judgment, determined that Mr. Ariss had not
    waived his years of service and that he was entitled to termination and
    severance pay under the
ESA
based on all his years of service. 
    However, she found that he was bound by his earlier 2006 waiver of his common
    law entitlement to reasonable notice.  As a result, Mr. Ariss damages stemming
    from his dismissal from employment without cause were accordingly limited to
    his termination and severance entitlements under the
ESA
.

[5]

Mr. Ariss appeals from the order of the motion judge on the ground that
    she erred in finding that he had waived his entitlement to reasonable notice at
    common law under an unenforceable agreement.

[6]

NORR submits that the motion judges determination of Mr. Ariss waiver was
    reasonable and subject to deference. If Mr. Ariss appeal is allowed, NORR
    cross-appeals on the ground that Mr. Ariss failed to mitigate his damages.

[7]

For the reasons that follow, I would dismiss the appeal and the
    cross-appeal.

A.

Factual Background

[8]

Mr. Ariss is a professional architect in the Kingston region. In
    February 1986, he commenced full-time employment as an architect with Dominik
    Thompson Mallette, Architects and Engineers Inc. (DTM). In November 2002, DTM
    sold its business to NORR.

[9]

Immediately following the sale, Mr. Ariss was employed by NORR.  There
    are three stages in Mr. Ariss employment relationship with NORR that are
    germane to this appeal and that form the factual matrix of the motion judges
    determination of the governing terms of Mr. Ariss employment.

[10]

On
    September 6, 2002, DTM advised Mr. Ariss that his employment would be terminated
    because of the sale of its business to NORR. On the same day, September 6,
    2002, NORR provided Mr. Ariss with an offer of employment.  On September 18, 2002,
    Mr. Ariss signed this offer of employment.  The offer letter did not contain
    any termination provisions.  However, in signing the agreement, Mr. Ariss
    acknowledged in writing that he had read, understood and accepted the offer of
    employment including the provisions specified in the Conditions of Work and
    Group Benefits for Pay Code 4 attached and forming part of this letter of offer.

[11]

Pay
    Code 4 contains NORRs termination policy that purported to limit its
    employees notice and severance entitlements to the minimum statutory
    provisions under the

ESA
. Included in Pay Code 4 is a chart of
    the periods of employment and corresponding notice periods stipulated under s.
    57 the
ESA
and an express reference to payment of severance in
    accordance with s. 64 of the
ESA
.
[1]


[12]

The
    next development in the employment relationship occurred in June 2006. At Mr.
    Ariss request, NORR permitted Mr. Ariss to increase his hours of work from 35
    to 40 hours per week. His base salary rose to $87,110 to reflect this change. On
    June 27, 2006, Mr. Ariss signed NORRs June 21, 2006 letter and acknowledged
    the amendments to his employment agreement, including the new Conditions of
    Work and Group Benefits under Pay Code 3.

[13]

There
    is no dispute that Pay Code 3 was attached to the June 21
st
letter;
    Mr. Ariss initialed all four pages of the Pay Code 3 document. Under Termination
    Policy, Pay Code 3 provided that in the case of termination of employment
    without cause, notice of termination would be provided in accordance with the
ESA
:

[NORR] will provide notice of
    termination in writing to the employee in accordance with the Ontario
    Employment Standards Act. The Employment Standards Act provides one week for
    every year of service to a maximum of 8 weeks.

[14]

As
    under Pay Code 4, Pay Code 3 set out a chart of the periods of employment and
    corresponding notice periods stipulated under the
ESA
. Pay Code 3 also
    provided for severance pay in accordance with the
ESA
.

[15]

Mr.
    Ariss agreed that he had read and understood Pay Code 3, including the waiver
    of his common law notice entitlement to reasonable notice of dismissal. There
    was no suggestion that the increase in his work hours to a 40-hour week and his
    augmented remuneration were inadequate consideration for the waiver of his
    common law notice entitlements.

[16]

The
    third and final evolution of Mr. Ariss employment with NORR, which gives rise
    to the parties dispute, took place in 2013.  Starting in early 2013, Mr. Ariss
    raised with NORR the possibility of transitioning from full-time to part-time
    hours. This request became the subject of negotiation for several months, which
    was documented in a series of emails and letters between the parties. Finally,
    in July 2013, Mr. Ariss secured NORRs agreement to reduce his hours from
    full-time to part-time employment. Mr. Ariss started working under the
    part-time arrangement with proportionately reduced compensation on or around July
    15, 2013; on this date, discussions about the specific terms of the part-time
    work arrangement were still ongoing.

[17]

NORR
    was not prepared to agree to Mr. Ariss transition from full-time to part-time
    employment unless he resigned from his employment, entered into a new
    employment agreement, waived his years of service, limited his notice
    entitlement to the date of the signing of the new agreement, and forewent any accrued
    entitlement to severance pay for his past years of service with NORR. NORR made
    clear, through a series of emails and voicemails, that Mr. Ariss resignation
    and acceptance of new terms of employment were non-negotiable if he wanted to
    secure part-time hours.

[18]

After
    having obtained legal advice, on July 17, 2013, Mr. Ariss sent the following
    written acknowledgement of the agreement between the parties:

Please accept this letter as notice of my wishes to reduce my
    work week and resign from my full time position as Senior Architect from the
    NORR Kingston office. This is conditional on acceptance of a
new offer of
    employment for part time hours
, conditions which have been discussed with
    and agreed to by Brian Gerstmar.

I understand that the
new employment terms
will be in
    accordance with the Employment Standards Act of Ontario.
Termination, notice
    and severance for my past employment will not form part of the new terms of
    employment
.
[Emphasis added.]

[19]

On
    July 31, 2013, Mr. Ariss signed NORRs Offer of Casual Employment. Although
    his hours decreased to 24 hours per week, his position and duties as Senior
    Architect to the Kingston office did not change. His remuneration also remained
    essentially unchanged:  his compensation was adjusted to $55.40 per hour, which
    included 11.8% for vacation and statutory holiday pay, and his $330 monthly car
    allowance; his pension and health benefits stayed the same.

[20]

Attached
    to the July 24
th
offer letter were Conditions of Work and Group
    Benefits. Under Termination, the attachment simply stated: As per letter of
    offer. The offer letter set out the following termination provisions:

Either party may terminate this
    agreement by providing the minimum notice required under the Employment
    Standards Act of Ontario.

[21]

There
    was no mention in the offer letter of any severance pay obligation or
    entitlement upon termination from employment.

[22]

On
    January 26, 2016, NORR terminated Mr. Ariss employment effective February 19,
    2016. NORR gave him 3.5 weeks notice of termination based on his service from
    July 2013, and offered to continue Mr. Ariss benefits for a period of two
    weeks following the effective date of termination. NORR did not provide Mr.
    Ariss with severance pay on termination.

B.

Motion judges decision

[23]

The
    motion judge found that at the time of his termination from employment with
    NORR, Mr. Ariss had been continuously employed since February 1986 and that
    there had been no interruption in his continuity of service.

[24]

Applying
    s. 9(1) of the
ESA
,

the motion judge found that Mr. Ariss
    employment was not terminated during the 2002 asset sale from DTM to NORR and
    that it continued with NORR for the purpose of any subsequent calculation of
    his length of employment and his entitlements under the
ESA
.  As a
    result, the motion judge determined that Mr. Ariss was continuously employed
    with NORR for a period of about 30 years as at the date of his termination from
    employment. While at issue on the motion, NORR does not contest these findings
    on appeal.

[25]

The
    motion judge rejected that Mr. Ariss had resigned from his employment because such
    a resignation would represent an entirely artificial attempt to create an
    interruption in employment when in fact there was none.  Rather, the motion
    judge found Mr. Ariss had transitioned from full-time employment to part-time
    employment.  She rejected NORRs position that Mr. Ariss had acted in bad faith
    in signing the 2013 agreement on the basis that he had been provided with legal
    advice and believed that the requirement he resign in exchange for continued
    employment on a part-time basis was unenforceable.

[26]

In
    the motion judges view, these events in 2013 amounted to an amendment of the
    existing terms of his employment, which included the 2006 waiver and
    termination provisions.

[27]

With
    respect to the latter, the motion judge concluded that Mr. Ariss had waived his
    entitlement to common law notice in 2006 when his hours and remuneration increased,
    and that the historical termination provision from the 2006 agreement continued
    to apply in 2013 when he changed to part-time hours.  Referencing the 2006
    termination provision, she concluded:

I am, in any event, satisfied that
    even when the termination clause is viewed in isolation of the surrounding
    circumstances over time, it is sufficiently clear to rebut the presumption of
    entitlement to notice in accordance with the common law. The termination
    provision is explanatory; it sets out in chart form the number of weeks notice
    of termination to which employees are entitled based on their years of service.
    There is no ambiguity in the wording of the termination provision.

[28]

As
    for the question of the adequacy of consideration for Mr. Ariss waiver of his
    common law right to reasonable notice of termination, the motion judge found
    that this issue was irrelevant because of her finding with respect to the
    clarity of the [2006] termination provision and Mr. Ariss understanding of
    it.

[29]

As
    a result, the motion judge determined that Mr. Ariss was entitled to 8 weeks
    notice of termination and 26 weeks of severance pay under the
ESA
. Alternatively,
    the motion judge stated that if she was wrong in her analysis and if Mr. Ariss had
    not waived his common law entitlements, she accepted as reasonable Mr. Ariss
    position that the notice period would be 22 months. She declined to deal with
    the issue of mitigation because of her finding that Mr. Ariss was entitled to only
    the statutory minimums under the
ESA
.

C.

Analysis

(1)

Appeal

[30]

In
    my view, Mr. Ariss appeal turns on the following questions:

i.

Did the motion judge err in finding that the events in 2013 served to
    amend his 2006 agreement of employment such that he was still bound by his 2006
    waiver of his common law reasonable notice entitlement?

ii.

If so, was there consideration for the new terms?

(i)

Was Mr. Ariss bound by his 2006 waiver of his common law entitlement to
    reasonable notice?

[31]

Mr.
    Ariss submits that the motion judge erred in failing to consider the effect of
    the illegal resignation and waiver of years of service on the validity of the
    termination clause in the 2013 agreement.  Specifically, Mr. Ariss argues she
    erred in failing to determine that the termination provisions of the 2013
    agreement were void because of their infringement of the
ESA
with the
    result that Mr. Ariss presumptive right to common law reasonable notice was
    not rebutted.

[32]

I
    would not give effect to these submissions.  In my view, they ignore the motion
    judges findings that were available to her to make.

[33]

The
    motion judge correctly found ineffective the attempt by the purported resignation
    to break Mr. Ariss years of continuous service in order to limit his entitlement
    to termination pay and obviate his right to severance pay as an employee of
    more than 5 years.  She concluded that neither Mr. Ariss nor NORR intended him
    to resign from his employment.  As she determined, Mr. Ariss employment was
    continuous in accordance with s. 9(1) of the
ESA
because NORR continued
    to employ Mr. Ariss following its purchase of DTMs business in 2002.

[34]

I
    agree that Mr. Ariss purported resignation and waiver of his accumulated years
    of service represented an illegal attempt, contrary to s. 5(1) of the
ESA
,
to contract out of the
ESA
.
However, as I shall explain, the
    illegality of these terms does not affect the correctness of the motion judges
    decision.

[35]

Section
    5(1) of the
ESA
provides as follows:

Subject to subsection (2), no
    employer or agent of an employer and no employee or agent of an employee shall
    contract out of or waive an employment standard and any such contracting out or
    waiver is void.

[36]

This
    provision of the
ESA
prohibits any contracting out of or waiver of minimum
    statutory employment entitlements and provides that any such contracting out or
    waiver is void:
Machtinger v. HOJ Industries Ltd
.
, [1992] 1
    S.C.R. 986, at p. 1000.

[37]

Section
    9(1) of the
ESA

reads:

If an employer sells a business or
    a part of a business and the purchaser employs an employee of the seller, the
    employment of the employee shall be deemed not to have been terminated or
    severed for the purposes of this Act and his or her employment with the seller
    shall be deemed to have been employment with the purchaser for the purpose of
    any subsequent calculation of the employees length or period of employment.

[38]

The
    purpose of s. 9(1) of the
ESA
is to protect minimum statutory
    entitlements related to the length of employment, such as notice and severance,
    where the purchaser of a business, or part of a business, continues to employ
    the employees of the vendor post-acquisition:
Abbott v. Bombardier Inc.
,
    2007 ONCA 233, 85 O.R. (3d) 21, at paras. 18, 20.  As a result, s. 5(1)
    invalidates any purported contracting out or waiver of s. 9(1):
Kerzner v.
    American Iron and Metal Co.
, 2018 ONCA 989, at paras. 34-35.

[39]

However,
    the motion judges determination that the resignation and waiver were
    ineffective does not invalidate the parties performance of the new terms of
    Mr. Ariss part-time employment.  There was no new written contract of
    employment because the resignation was ineffective and Mr. Ariss employment
    continued.  The effect of the parties performance of the 2013 terms served, as
    the motion judge found, to amend the existing employment agreement, as it then
    stood, to provide for Mr. Ariss requested change from full-time to part-time
    employment.  The extant terms included the 2006 termination clause and waiver
    of entitlement to common law reasonable notice.

[40]

It
    is well-established that absent clear rebuttal, employment agreements contain
    an implied term that employees are entitled to reasonable notice of
    termination:
Machtinger
, at p. 998.  However, there is no dispute that
    the 2006 waiver of Mr. Ariss common law entitlement to reasonable notice was
    clear and unequivocal.  The motion judge correctly found that there was no
    change to this term by the events in 2013.  As she concluded, Mr. Ariss
    fully understood, both when working full-time and when working part-time, that
    his entitlements on termination would be in accordance with the
ESA
.

[41]

The
    motion judge findings were open to her.  I see no error that would justify
    appellate intervention.  I would therefore not give effect to this ground of
    appeal.

(ii)

Was there adequate consideration for the amendments to Mr. Ariss
    employment contract?

[42]

This
    ground of appeal can be briefly disposed of.

[43]

As
    already noted, there is no dispute that the 2006 amendments to Mr. Ariss
    employment contract were valid.  Nor is there any suggestion that the increased
    hours and remuneration made in accordance with Mr. Ariss request did not
    constitute adequate consideration for his waiver of his common law entitlement
    to reasonable notice.

[44]

Again,
    the 2013 amendments were at Mr. Ariss behest.  He requested the transition
    from full-time to part-time employment and entered into protracted negotiations
    to achieve this result.  NORRs preference was that he continue to work
    full-time but it ultimately, albeit reluctantly, agreed to the change.  Mr.
    Ariss continued in the same position and received the same remuneration
    although proportionately reduced in accordance with his part-time hours.

[45]

In
    consequence, I am of the view that there was adequate consideration for the
    2013 amendments to Mr. Ariss employment contract.  I would reject this ground
    of appeal.

(2)

Cross-appeal

[46]

If
    I am incorrect in concluding that there was a waiver of Mr. Ariss common law
    right to reasonable notice, NORR submits that the motion judge erred in failing
    to determine the issue of mitigation. It argues that Mr. Ariss common law
    damages should be reduced by his failure to mitigate by finding alternate,
    suitable employment.

[47]

I
    am not persuaded by this submission.

[48]

It
    is well-established that a dismissed employee must mitigate or minimize any damages
    arising out of the wrongful dismissal by making reasonable efforts to secure
    alternate, comparable employment:
Red Deer College v. Michaels
, [1976]
    2 S.C.R. 324, at p. 331. However, it is equally clear that the employer bears
    the burden of proving the employees failure to mitigate; and that this burden
    is not light:
Michaels
, at p. 332. The mitigation inquiry is
    fact-driven and considers all the relevant circumstances. The question is
    whether the employee has made reasonable efforts in the circumstances to find
    comparable employment:
Michaels
, at pp. 331-32.

[49]

In
    my opinion, Mr. Ariss has discharged his obligation to mitigate his damages. His
    inquiries and letters covering the Kingston area and environs were reasonable. I
    do not accept NORRs submission that Mr. Ariss, a thirty-year employee in his
    sixties, was required to uproot himself far from home in order to pursue any
    possible employment opportunity: see
Peet v. Babcock & Wilcox
    Industries Ltd.
(2000),  53 O.R. (3d) 321 (C.A.), at para. 7.

[50]

Mr.
    Ariss was obliged to make reasonable efforts to find alternate, comparable
    employment. Comparable employment does not mean any employment, but
    comprehends employment comparable to Mr. Ariss employment with his former
    employer in status, hours and remuneration:
Carter v. 1657593 Ontario Inc.
,
    2015 ONCA 823, at para. 6. I am satisfied that Mr. Ariss made reasonable
    efforts to find such comparable employment.

[51]

As
    a result, I would dismiss NORRs cross-appeal.

D.

Disposition

[52]

For
    these reasons, I would dismiss the appeal and cross-appeal.

[53]

As
    the result is mixed, I would grant no costs of the appeal or cross-appeal but
    leave undisturbed the disposition of costs on the motion below.

Released: RGJ May 30, 2019

L.B.
    Roberts J.A.

I
    agree. R.G. Juriansz J.A.

I
    agree. David Brown J.A.







[1]
While there was controversy in the evidence as to
    whether Pay Code 4 was attached to the offer letter, the motion judge appears
    to have accepted that it was, since she found:  In the contracts of employment
    that he signed in both
2002
and 2006, the termination and severance
    provisions referred only to the
ESA
.  [Emphasis
    added.]


