Nutting v Franklin Templeton Investments Corp, 2016 ABQB 669

Court of Queen’s Bench of Alberta Citation: Nutting v Franklin Templeton Investments Corp, 2016 ABQB 669 Date: 20161125 Docket: 1203 12717 Registry: Edmonton Between: Mitchell Nutting Plaintiff - and - Franklin Templeton Investments Corp. Defendant _______________________________________________________ Reasons for Decision of R.P. Wacowich , Master in Chambers _______________________________________________________ Introduction [ 1 ] This case was heard by me in special chambers on August 23, 2016. At the end of the special chambers application I provided my Reasons orally.

Since that time, counsel on the case have indicated that the case has attracted the interest of many parties. Accordingly, I am now providing my written Reasons. [ 2 ] This is an application for

summary judgment brought by the Plaintiff, Mitchell Nutting, in a without-cause dismissal from his employment with the Defendant, Franklin Templeton Investments Corp. (“FTIC”). Mr. Nutting was dismissed without cause. It is his view that he is entitled to additional severance pay that he alleges he is entitled to receive at common law because of his dismissal. [ 3 ] There is a cross application by the Defendant who seeks

summary judgment for dismissal of the entirety of the Plaintiff’s claim. The issue before the Court is one of contractual

interpretation with statutory reference. Facts [ 4 ] The Plaintiff’s employment commenced on December 9, 2009. The Plaintiff was terminated on April 12, 2012 without cause. [ 5 ] At all relevant times up to the time of his dismissal, the Plaintiff was bound by an employment contract, effective December 17, 2009, which contained the following provision: Additionally, your employment may be terminated at any time without cause upon the provision by FTIC of the minimum notice of termination, or pay in lieu of notice, benefits and, if applicable, severance pay prescribed by applicable employment standards legislation

in the province in which you are employed. The provision of such notice or pay in lieu of notice, benefits and severance pay constitutesfull and final satisfaction of all rights or entitlements which you may have arising from or related to the termination of your employment(including notice, pay in lieu of notice, severance pay, etc.), whether pursuant to contract, common law, statute or otherwise. [6] The Agreement also contained an “entire agreement” and “no representations” clause: This offer letter and the attached Agreement collectively comprise all of the terms of your employment with FTIC.

In acceptingemployment with FTIC, you agree to these terms and acknowledge that there are no other agreements, representations, or promises withrespect to our employment or your ability to legally be employed on a permanent basis in Canada. [7] When the Plaintiff was terminated the Defendant provided the Plaintiff with the amount of pay in lieu of notice required bythe Employment Standards Code, RSA 2000, c E-9. [8] The employer submits that since Nutting’s service was more than two years but less than four years he was entitled to twoweeks’ notice of termination of employment pursuant to sections 55-57 of the Employment Standards Code, RSA 2000 c E-9.

Issues A. Is

summary judgment available? B. What is a proper

interpretation of the Agreement between the parties as affected by the Employment Standards Code? Analysis A. What is the test for

Summary Judgment? [9] Relying on the Supreme Court of Canada’s decision in Hryniak v Mauldin, 2014 SCC 7, the Alberta Court of Appeal hasstated that the test for a

summary judgment (dismissal) is “whether there is a reasonable prospect that the claim will succeed”. [10] Following the Supreme Court of Canada, the Court of Appeal of Alberta confirmed that a

summary judgment is availablewhere there is no genuine issue requiring a trial:

Summary judgment is now an appropriate procedure where there is no genuine issue requiring a trial: There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion forsummary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows thejudge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. The modern test for

summary judgment is therefore to examine the record to see if a disposition that is fair and just to both parties can bemade on the existing record. Windsor v Canadian Pacific Railway Ltd, 2014 ABCA 108 B. Can a fair and just determination be made in this case? [11] The Agreement is clear and unambiguous.

The language of the termination of clause limits the Plaintiff to the minimumnotice required by the Employment Standards Code, RSA 2000, c E-9. [12] The Defendant complied with the Agreement and paid the Plaintiff what he was entitled to under the Agreement. [13] The relevant general principles of the law relating to termination clauses are clear.

A termination clause may oust thepresumption of reasonable notice, either expressly or impliedly, so long as the clause does not purport to violate the minimum noticeperiods in legislation: ...I would characterize the common law principle of termination only on reasonable notice as a presumption, rebuttable if the contract ofemployment clearly specifies some other period of notice, whether expressly or impliedly. ...

Absent considerations of unconscionability, an employer can readily make contracts with his or her employees which referentiallyincorporate the minimum notice periods set out in the Act or otherwise take into account later changes to the Act or to the employees’notice entitlement under the Act. Such contractual notice provisions would be sufficient to displace the presumption that the contract isterminable without cause only on reasonable notice.

Machtinger v HOJ Industries Ltd, (SCC), [1992] 1 SCR 986 at pp 998 and 1004-1005 [14] In the case of Simpson v Global Warranty, 2014 ONSC 724, there was a wrongful dismissal suit involving a contractualnotice clause. The agreement in that case stipulated: ...unless an employee is terminated for cause, an employee’s employment may be terminated at the sole discretion of the Employer and

for any reason whatsoever upon providing the employee with one (1) weeks notice or pay in lieu thereof, subject to any additional notice,pay in lieu thereof or severance that may be required to meet the minimum requirements of the Employment Standards Act, R.S.O 1990,c E-14, as amended from time to time. [15] The Court explained that there was no ambiguity and that contra proferentem could not apply absent an ambiguity. The Courtfound that the purpose of the clause was to limit notice and damages to the minimum amounts required by employment standardslegislation.

Ibid, at paras 76-77 [16] In Roden, the Ontario Court of Appeal considered a termination clause in an employment agreement which read: ...the Employer may terminate the Employee’s employment at any other time, without cause, upon providing the Employee with theminimum amount of advance notice or payment in lieu thereof as required by the applicable employment standards legislation.

Roden v The Toronto Human Society (2005), (ON CA), 259 DLR (4th) 89, (ONCA) at para 55 [17] The Court concluded that this without cause provision was “precisely the type” which the Supreme Court of Canada hadrecognized as valid and which operated to limit the employee’s entitlement to the statutory notice period. Ibid, at paras 60-62 [18] In Oudin, the Ontario Superior Court of Justice also considered an employment agreement containing a similar terminationclause which read: s.9 Termination of Employment ...

The CFT may also terminate this agreement for any other reason by giving the employee 15 days notice or the minimum prescribed bythe Employment Standards Act or by paying an amount of salary equal to the salary the employee would have had the right to receiveduring the notice period...

Oudin v Le Centre Francophone de Toronto, 2015 ONSC 6494 at para 35 [19] The Court explained that parties were free at law to contract out of the implied obligation of reasonable notice, for a specificnotice period by referencing statutory minimums and that a court should not engage in searching for a means to avoid the parties’commitments. [20] The Agreement in this case contains a clear and unambiguous clause which limits the Plaintiff’s entitlements to the statutoryminimums upon dismissal without cause. The Plaintiff has been paid the pay in lieu of notice required by the Agreement.

Therefore, afair and reasonable determination should be made that his claim for additional compensation for termination ought to be dismissed.

What is the test for enforcing a contractual notice clause? [21] In order to oust the presumed (or implied) term that reasonable notice impliedly provided upon notice of termination withoutcause, the agreement must expressly or implied specify “some other period of notice”: ...the common law principle of termination only on reasonable notice as a presumption, [is] rebuttable if the contract of employmentclearly specifies some other period of notice, whether expressly or impliedly. [emphasis added] Machtinger v HOJ Industries Ltd, (SCC), [1992] 1 SCR 986 at p 998 [22] The Plaintiff heavily relies on the Alberta Court of Appeal’s decision in Kosowan v Concept Electric, 2007 ABCA 85. [23] But the contractual provision at issue in Kosowan read: ...Should you be terminated for reasons other [than] cause then you will be entitled to advance notice or severance pay thereof inaccordance with the Employment Standards Act of Alberta. [Emphasis added] [24] The words “in accordance with” used in Kosowan neither specified, “some other notice period” nor limited notice to thespecified period.

The Court of Appeal confirmed that the language “does not, on its face, confine the Appellant to compensation [underthe Code]”. Ibid at para 4 [25] In its short judgment, the Court noted that section 3(1) of the Employment Standards Code did not affect the employee’s rightto the civil remedy of damages for reasonable notice: However, s. 3(1) of the Employment Standards Code expressly provides that: Nothing in this Act affects

a) Any civil remedy of an employee or an employer:

Ibid, at para 3 [26] The words “in accordance with” merely recognizes an obligation to comply with the statue. Since section 3(1) left open theability to pursue an action, the employee was entitled to bring his action for failure to provide reasonable notice. [27] In other words, it was in accordance with the Code to pursue a claim for reasonable notice at common law because the Codecontemplated the continuance of that right. It is in accordance with the Code to pay the minimums but it is also in accordance with theCode to pay more.

Being in accordance with the Code is essentially meaningless in that it is not restrictive. [28] That contrasts dramatically with a provision that refers to the minimum requirements of the Code. The Kosowan language didnot attempt to limit the employee to the minimum requirements of the Code.

That is important and is a point made by the OntarioSuperior Court of Justice in Miller v ABM Canada Inc where Glithero, J said: While counsel for the plaintiff submits that a termination clause simply stating that an employee is entitled to compensation inaccordance with the legislation does not restrict the employee to the minimum notice period provided, that submission is based onKosowan v Concept Electric Ltd, 2007 ABCA 85 Alberta The factual difference in that case is that the termination clause didnot provide that the employee was to receive the “minimum” notice period as was provided for in the contract in this case.

In this casethe termination clause did specify that the minimum legislated notice was contemplated.

Miller v ABM Canada Inc, 2014 ONSC 4062 [29] The relevant clause in Miller read, “Regular employees may be terminated at any time without cause upon being given theminimum period of notice prescribed by applicable legislation, or by being paid salary in lieu of such notice or as may otherwise berequired by applicable legislation.” Ibid, at para 11 [30] The Court held that where a clause sets out a lawful period of notice, that is effective to rebut the presumption of reasonablenotice at common law. [31] The language in this Agreement limits the Plaintiff expressly to “the minimum notice of termination, or pay in lieu of notice,benefits and, if applicable, severance pay prescribed by applicable employment standards legislation in the province in which you areemployed.” That is a necessary reference to s 56 which prescribes certain minimum notice requirements.

An employer must provide “atleast” those amounts of notice and those minimum standards cannot be avoided: s4. [32] In my view, Roden, Oudin, Miller, and Simpson cannot be distinguished on the basis of statutory differences. The OntarioEmployment Standards Act contains provisions equivalent to s 3 of our Code in ss 8 and 5(2) of the ESA. Employment Standards Act,2000, SO 2000, c 41. [33] This Court should respect that the Roden decision is from the Ontario Court of Appeal and, the appeal was dismissed inOudin a short while ago by the Ontario Court of Appeal. [34] Ontario is supported in this position.

The Supreme Court of British Columbia also considered language which provided thatthe employer had to make all payments prescribed by legislation. The clause in question read: Altrom may terminate your employment... by giving you ... all payments or entitlements prescribed by the provincial employmentstandards legislation... The Court held that this provision was not ambiguous and limited the notice entitlement to the notice required by the employmentstandards legislation.

Wernicke v Altrom Canada Corp, 2009 BCSC 1533, at paras 49, 52, 56, 59 and 73 [35] I was also referred to the case of Joseph v June Warren Publishing Ltd, 2007 ABPC 309. This is the only case which wasbrought to my attention which is inconsistent with the position taken by the Defendant. However, the decision in Joseph is inconsistentwith the Ontario cases and the Machtinger decision of the Supreme Court of Canada. Further, the facts are distinguishable because ofthe differences in contractual language in the contract in that case.

And the majority of the cases and the leading authorities, support theposition I take. [36] Furthermore, the Agreement before this Court goes further than the Ontario cases and expressly makes clear that any possiblecommon law right is overridden.

It reads: ...The provision of such notice or pay in lieu of notice, benefits and severance pay constitutes full and final satisfaction of all rights orentitlements which you may have arising from or related to the termination of your employment (including notice, pay in lieu of notice,severance pay, etc.), whether pursuant to contract, common law, statute or otherwise. [37] Additionally, the Plaintiff has claimed damages for intentional infliction of emotional distress, loss of reputation, expenses insecuring other employment and an unpaid signing bonus.

Given an absence of evidence, these elements of the claim must also bedismissed. A fair and reasonable determination can be made that all elements of the claim should be dismissed. There is no “reasonableprospect that the claim will succeed”

[ 38 ] The Defendant has demonstrated that the Agreement contains a valid clause concerning notice of termination which meets the legal test for enforceability in that it:

a) provides a prescribed period of notice which does not violate the minimums imposed by statue; and,

b) expressly evidences the parties’ intention that the prescribed notice would oust any other notice requirement that may have otherwise been implied. [ 39 ] In my view, the agreement in this case contains a clear and an unambiguous clause which limits the Plaintiff’s entitlement to the statutory minimums upon dismissal without cause. The Plaintiff has been paid the amount required. [ 40 ] The Plaintiff’s application for

summary judgment is dismissed. Furthermore, the action is dismissed in its entirety as requested in the Defendant’s cross application for

summary dismissal. Heard on the 23 rd day of August, 2016. Dated at the City of Edmonton, Alberta this 25 th day of November, 2016. R.P. Wacowich M.C.C.Q.B.A. Appearances: Mathieu J. LaFleche Bennett Jones LLP for the Plaintiff Hugh J.D. McPhail, Q.C. McLennan Ross LLP for the Defendant