Receipt of LTD Evidence of Frustration

Is the continued receipt of long-term disability (“LTD”) benefits evidence that one’s contract of employment has become legally “frustrated”? In the case of Roskaft v. RONA Inc., 2018 ONSC 2934 (CanLII) the Honourable Justice Andra Pollak said yes.

Termination of Employment Does Not Terminate Ability to Apply for LTD Benefits

Consider this scenario: An employee is covered for long-term disability (LTD) benefits under his employer’s group policy of insurance. He sustains a head injury, but does not immediately appreciate the seriousness of the same. Three years later he quits the job that provided LTD coverage. Two years after that, he makes application for LTD benefits under his former employer’s policy. Is he still covered?

If you said “of course not”, you would be wrong. In the case of MacIvor v. Pitney Bowes, 2018 ONCA 381, Ontario’s top court ruled that the employee was not only eligible to make application for such benefits, the insurance company was required to respond and pay.

Employers May Not Make Changes to Terms of Employment During Working Notice Period

In the 1997 movie “Wag the Dog” the spin doctors hired to get the President re-elected release an ad campaign with the slogan “Never change horses in mid-stream.” That idiom serves as a powerful and important reminder for employers that might seek to change the terms of an employee’s employment during a period of so-called “working notice.”

In a short decision released by the Court of Appeal for Ontario, Nufrio v. Allstate Insurance Company of Canada, 2017 ONCA 948 (CanLII), Ontario’s top court reinforced this principle.

"Cynical, Patronizing, Unfair, Impractical, and Expensive" - How Justice Perell described the Partial Summary Judgment Approach to Wrongful Dismissal Cases

Summary judgment, a method of resolving lawsuits without the need for a trial, has long been considered an appropriate means by which to resolve wrongful dismissal cases. The changes made in 2010 to the Rules of Civil Procedure, the rules governing lawsuits in Ontario, served only to increase the popularity of such a process.

But, as this blog has considered on more than one occasion, the speed and efficiency of summary judgment bring with them their own challenges in wrongful dismissal cases; most acutely what to do about the dismissed employee’s duty to mitigate?

In April of 2015, in the case of Markoulakis v SNC-Lavalin Inc., 2015 ONSC 1081 (CanLII) the Honourable Justice Andra Pollak held that the use of the “Trust Approach” previously approved by the Court of Appeal for Ontario in Cronk v. Canadian General Insurance Co. (1995), 25 OR (3d) 505 (CA) was no longer appropriate given the decision of the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7. That case was summarized by this blog in the post Rushing to Judgment: How to Reconcile the Duty to Mitigate with Summary Judgment in Wrongful Dismissal Cases.

More recently however, on June 29, 2015, the Honourable Justice Paul Perell, also of the Ontario Superior Court of Justice, in the case of Paquette v TeraGo Networks Inc., 2015 ONSC 4189 (CanLII) described the "Partial Summary Judgment Approach", where the employee is granted a partial summary judgment and the parties return to court during and or at the end of the notice period for further payments subject to the duty to mitigate, employed by Justice Pollak as “cynical, patronizing, unfair, impractical, and expensive.” Justice Perell specifically mentioned the Markoulakis case in making such comments.

Ouch.

Rushing to Judgment: How to Reconcile the Duty to Mitigate with Summary Judgment in Wrongful Dismissal Cases

How should the court account for a plaintiff’s duty to mitigate his damages following termination from employment, when summary judgment can be awarded before the expiry of the reasonable notice period?

More to the point, how can an employer ensure that the dismissed employee will take all reasonable steps to mitigate his damages if that dismissed employee is already in receipt of his pay in lieu of notice?

In the case of Markoulakis v SNC-Lavalin Inc., 2015 ONSC 1081 (released April 16, 2015), the Honourable Justice Andra Pollak held that the use of the “Trust Approach” previously approved by the Court of Appeal for Ontario in Cronk v. Canadian General Insurance Co. (1995), 25 OR (3d) 505 (CA) is no longer appropriate, given the decision of the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7.