Reid Pederson - v. -, 2021 SKPC 35

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2021 SKPC 35 Date: June 15, 2021 File: 35/20 Location: Regina _____________________________________________________________________________ Between: Reid Pederson - and - Brandt Developments Ltd. Reid Pederson For the Plaintiff Ashton Butler For the Defendant JUDGMENT P. DEMONG, J. Introduction [ 1 ] Mr. Pederson seeks damages arising from the termination of his employment with the defendant (hereafter ‘Brandt’).

He argues that the written employment contract that he entered into with Brandt should be set aside, thereby entitling him to: a period of notice longer than that set forth in that employment contract; and a portion of the discretionary bonus that he had the potential to receive if Brandt concluded that a bonus was in order. He seeks a sum of money in excess of the monetary jurisdiction of this Court, but he is prepared to waive any claim for damages in excess of that amount - which is $30,000.00. He seeks prejudgment interest on that sum and

his court costs. [ 2 ] Brandt has filed a Reply to this action. It alleges that the termination provisions of the written employment contract stipulated that upon termination Mr. Pederson would be given 60 days’ notice of termination or payment in lieu of notice - to be based on Mr. Pederson’s annual base salary - not including any discretionary bonus that Mr. Pederson might otherwise be entitled to. Brandt asserts that it paid Mr. Pederson the appropriate sum of money in lieu of notice, and that it did, therefore, fully comply with the agreement. Brandt denies that Mr.

Pederson is entitled to a period of notice longer than that set out under the terms of their agreement, and it denies that he is entitled to any further payment relating to a bonus (which it argues was purely discretionary) and it puts Mr. Pederson to the strict proof thereof. Brandt asks that Mr. Pederson’s claim be dismissed with court costs in its favour. Issues [ 3 ] The court is called upon to address the following issues:

a) Are written employment agreements enforceable and if so under what circumstances?

b) Was the employment agreement entered into between the parties unconscionable?

c) Was the employment agreement ambiguous?

d) Was the employment agreement illegal?

e) If the employment agreement was not unconscionable, ambiguous, or illegal, are its terms binding on the parties?

f) If the employment agreement is binding on the parties, has Brandt complied with the terms of that agreement, and if so, should Mr. Pederson’s claim be dismissed?

g) If the employment agreement should be set aside, and because he was dismissed without cause, what is the proper measure of common law damages that should be awarded to Mr. Pederson?

h) Is either party entitled to court costs and if so, in what amount? Evidence, Analysis, and Findings of Fact [ 4 ] Many of the facts in this case are undisputed. Where the evidence conflicts, I will explain why I prefer some evidence and reject other evidence. [ 5 ] Brandt is a large and diverse private corporation that is engaged in the manufacture and sale of agricultural, construction, forestry, and railway equipment. It has a division dedicated to the acquisition, development, and management of real estate for its commercial operations. [ 6 ] In or about the spring of 2016 Mr.

Pederson was made aware of an employment opportunity with Brandt’s property development division as ‘Manager of Development Projects’. He submitted a covering letter and resume to Brandt on August 15, 2016, or thereabouts. In his covering letter Mr. Pederson indicated that he was currently working in the development industry in a very similar role and that he felt his background in development, and his diverse experience, made him uniquely qualified for that position. [ 7 ] Mr. Pederson’s resume looks impressive.

His education included a bachelor’s degree, a master’s certificate in Organizational Leadership, and ongoing education dealing with project management and partnership development. He had, since 2009 been employed as a general manager for an American hockey team; an assistant general manager of the Regina Pats; a Director of Corporate Development for the Regina Exhibition Association; A Vice President of Sport and Recreation for Regina Exhibition Park; and most recently, the Vice President of Property Management and Development for a group of companies managing a $120,000,000.00 property portfolio. [ 8 ] Mr.

Pederson is 52 years old. He presented in court as a thoughtful, respectful, articulate, and educated person. While he was somewhat uncertain of the court process, he struck me as well versed and experienced in the commercial world. I have accepted, without hesitation, his assertion that he has, in his previous fields of endeavour, negotiated employment agreements on multiple occasions. [ 9 ] Brandt expressed a desire to hire Mr. Pederson and presented him with a written employment contract for him to review prior to accepting the position. Mr.

Pederson says, and I accept, that he had between seven and ten days to review the contract. He was given sufficient time to review the agreement and to obtain legal advice if he felt it was necessary. He was given the opportunity to negotiate the terms of the agreement and to ask Brandt to clarify the agreement if he felt this was required. He indicated at trial that he saw no need to retain legal counsel because he didn’t think legal advice was necessary.

From this, I draw the reasonable inference that, as a sophisticated businessperson, he was aware of what the terms of the agreement were, and that he understood the legal significance of those terms. I am comforted by that conclusion because he gave no evidence at trial, to the effect that he found any of the terms were confusing or uncertain. He did, in fact, negotiate one aspect of the agreement as it related to the bonus provisions set forth in the agreement. That done, he executed the agreement (identified as Exhibit D-2 in these proceedings) on September 30, 2016.

He commenced work on October 12, 2016. [ 10 ] There are only a few parts of the contract that this Court is called upon to consider in order to resolve this dispute. First,

Article 1 of the agreement makes it clear that the contract was to become effective as at October 12, 2016. I will speak to this shortly in the context of notice periods, and the bonus provisions set forth in the contract. Second,

Article 4, and

schedule B speaks to Remuneration and Benefits. They read as follows: 4. Remuneration and Benefits

4.1 In consideration of the Employee’s performance of the obligations contained in this Agreement, Brandt will pay the Employee the Remuneration and Benefits set out in the attached

Schedule “B”, together with all statutory benefits. Payment to the Employee shall be made periodically in accordance with

Schedule “B”.

Schedule “B” is subject to change from time to time at Brandt’s discretion. Brandt shall make all payroll deductions as required by law. The Employee understands that in his position he is not entitled to overtime. 4.2 Benefits, unless otherwise specified, shall be in accordance with the provisions of the Brandt comprehensive benefit program currently in effect as amended from time to time, for the position.

SCHEDULE “B” 4. Remuneration and Benefits 4.1 The Employee will be entitled to a Base Salary of $110,000 per ANNUM, paid semi-monthly (“Base Salary”). The Employee will be entitled to either a discretionary bonus of up to $30,000 or an annual profit sharing bonus to be developed, subject to meeting company objectives set from time to time as determined by the company. If earned, this bonus will be paid following the finalization of Brandt Developments annual audited financial statements.

The Employee must be an Active Employee employed by Brandt at the end of Brandt’s fiscal year in order to be eligible for the bonus in respect of that year. Brandt will guarantee payment of $30,000 for the annual profit bonus for the first year of employment and will be paid following the twelve month employment period provided the Employee is still in the employ of the company and subject to the termination clause in this agreement. 4.2 The standard waiting periods for enrolment in Brandt’s group life, disability, health, and dental coverage will be waived.

For the purpose of this Agreement: “Active Employee” means — An employee who is at work and performing duties for Brandt and does not include an employee who’s employment has been terminated and in receipt of pay in lieu of notice. [ 11 ] Third, the termination provisions are set forth in

Article 9. This

Article reads as follows: 9. Termination 9.1. The Employee may terminate his employment by giving 30 days’ advance notice in writing to Brandt, unless otherwise provided in

Schedule “B”. Brandt, at its option, may waive such notice, in whole or in part, in which case the Employee shall be entitled to receive pay in lieu of notice for the lesser of: (

a) the remainder of the notice period, which was not worked, or (

b) the statutory notice period for terminations applicable to the Employee as specified in the relevant provincial employment or labour standards legislation for the province in which the Employee works. 9.2 Brandt may terminate this Agreement, immediately and without notice for just cause. Brandt may also terminate this Agreement before it’s expiry date, without cause or reason, by giving the Employee 60 days’ notice, unless otherwise provided in

Schedule B, in writing (or at Brandt’s option, pay in lieu of notice) which shall include all payments or entitlements to which the Employee is entitled in respect of notice and severance pursuant to the relevant provincial employment or labour standards legislation. 9.3 Pay in lieu of notice will be calculated on the basis of Employee’s annual base salary as of the date he receives notice of

termination. Bonuses and other forms of additional compensation will not be considered part of the Employee’s annual base salary. The Employee’s right and entitlement to any performance bonus shall terminate effective as of the earlier of (

i) the date of termination of employment, or (ii) such date prior to termination of employment as may be stated in

Schedule “B” to this Agreement. [ 12 ] I had earlier indicated that Mr. Pederson had been given the opportunity to negotiate the terms of this agreement. The only term that he sought to negotiate, and did so successfully, related to the first-year bonus. The original agreement contemplated that all bonuses would be discretionary and, if earned, paid following the finalization of Brandt Developments annual audited financial statements. Mr. Pederson sought, and obtained, a change to

Schedule B - such that the first year’s bonus would be for $30,000.00 rather than ‘up to $30,000.00’ - and that this bonus would be guaranteed and payable following a twelve-month employment period. [emphasis added]. [ 13 ] The contract stipulated that Mr. Pederson would earn an annual salary of $110,000.00. Payment was made bi-monthly in the gross sum of $4,750.00 per pay period. In addition, he would be entitled to vacation, other employee benefits, and a car allowance of $650.00 per month. [ 14 ] In the first year Mr.

Pederson earned his salary and was awarded the guaranteed bonus of $30,000.00 - which was paid on the anniversary date of his employment. In the second year, he was again paid his full salary and was offered a discretionary bonus of $27,000.00. Following negotiations with his manager, that was increased to $28,500.00. It was paid at the end of January 2018, in accordance with the timelines envisaged under

Schedule B of the agreement - which is after finalization of Brandt Development’s annual audited financial statement - which occurs on October 31 of each calendar year. I accept Brandt’s evidence to the effect that bonuses are considered and either paid or denied within the proceeding three months of finalization of the audited statements. I conclude that Mr. Pederson knew, or ought to have known, of this timeline as it had been complied with in 2018. In that year, Mr. Pederson’s salary was increased to $114,000.00.

I heard very little evidence as to why that occurred, and I can only assume that it was a cost of living adjustment. [ 15 ] In 2018 Mr. Pederson began to report to a different manager, Mr. Oke. Mr. Pederson had worked with Mr. Oke in the latter part of 2018 to set certain goals which they hoped that Mr. Pederson would meet. Over the ensuing eight months, Mr. Oke felt that Mr. Pederson had failed to meet these goals in any meaningful way, and that he was not on track to do so. He asserted that the goals that Mr.

Pederson’s had earmarked for 2018 were similar to the goals of 2017, and that they have not been met to Brandt’s satisfaction. This, combined with an organizational restructuring that made Mr. Pederson’s position redundant, led to Brandt’s decision to terminate Mr. Pederson. At trial, Mr. Pederson disagreed with Mr. Oke’s conclusions as to his performance, but he conceded that regardless of those conclusions the employment contract would, prima facie, entitle Brandt to terminate Mr. Pederson’s employment by making payment in lieu of notice. [ 16 ] Brandt terminated Mr. Pederson’s employment on August 22, 2019.

Brandt paid Mr. Pederson the sum of $19,000.00. The parties concede that this would be the equivalent of 60 days’ notice after the requisite statutory deductions. Brandt decided not to pay Mr. Pederson a discretionary bonus, either in part or at all. Mr. Pederson accepted that payment in lieu of notice, although he did, some short time later, ask Brandt to top up the payment that was made. I will discuss this shortly. [ 17 ] I accept Mr. Pederson’s evidence that he took reasonable steps to mitigate any potential loss arising from his termination by seeking alternative employment.

Following his termination, he actively engaged in several job searches and had a couple of follow up meetings with prospective employers. In January of 2019 he found alternative full-time employment but at a lesser salary. Brandt has argued that he had failed to reasonably mitigate his damages, but, and with respect, it has led no evidence to suggest that the steps taken by Mr. Pederson were anything less than reasonable - and in law the onus of showing that mitigation efforts were less than reasonable falls on the defendant. [ 18 ] On September 3, 2018, after having received payment in lieu of notice Mr.

Pederson sent an e-mail to Brandt indicating that he had sought legal advice in relation to the settlement and he felt that the settlement was inadequate. On September 5, 2018, Mr. Pederson suggested that he receive an additional one month’s pay in lieu of notice and a ‘guaranteed portion of the annual bonus’. On September 11 Mr. Pederson sent a letter to Mr. Oke. That letter indicated that Mr. Pederson’s lawyer had concluded that three months was the minimum compensation that he should be entitled too, equivalent to a further payment of $9,500.00 (before statutory deductions).

In addition, he provided an analysis as to what, in his opinion, should have been the factors that Brandt should have looked to in deciding in favour of exercising its discretion to award a bonus and suggested payment of the further sum $20,000.00 (before statutory deductions). He was, therefore, looking for the further sum of $39,050.00. [ 19 ] Mr. Oke did not respond to these requests other than to indicate that since Mr. Pederson had retained legal counsel, he would refer the matter to his legal department.

Following some presumed back and forth, the details of which were not dealt with in evidence, Brandt’s legal counsel advised Mr. Pederson that it declined to negotiate the matter further, concluding that the employment contract had been clearly worded, the compensation provided was fair, and that the case law that Mr. Pederson had referred to was not applicable to his situation. [ 20 ] Mr. Pederson commenced this action shortly thereafter.

The Law [ 21 ] This Court is often presented with the assertion - by an aggrieved plaintiff who has been terminated without cause - that an employment contract is unenforceable if the terms defining the amount to be paid in the event of termination - do not meet or exceed the common law damages that a court may award in the absence of a written employment contract which dictates the amount to be paid.

When I say ‘common law damages’ I mean those damages which a court, with due consideration of the factual matrix surrounding the employee, the employer, and the nature of the employment, decides is fair and reasonable having due regard to similarly decided cases. [ 22 ] Respectfully, that is an incorrect statement of law. Individual employees and employers (outside the constraints of a collective bargaining agreement) have every right to contractually bind themselves to the terms and conditions of their employment and their

termination - and to identify the sum of money that might be paid upon termination. As Ms. Butler has properly pointed out in her legalbrief, the Supreme Court of Canada in Machtinger v HOJ Industries Ltd., (SCC), [1992] 1 SCR 986 at paras 19-20 hasmade it clear that the presumption of common law notice may be rebutted through an express contrary agreement entered into betweenthe employer and employee.

That court reviewed the law dating back to as early as 1562 and noted that the English courts gradually‘came to accept reasonable notice as a contractual term to be implied in the absence of evidence to the contrary’. [Emphasis added].That court noted that this has been the state of the law in Canada since as early as 1936. On behalf of the majority Mr. Justice Iacobuccistated, at para 20, ‘I would characterize the common law principle of termination only on reasonable notice as a presumption, rebuttableif the contract of employment clearly specifies some other period of notice, whether expressly or impliedly’.

I am satisfied that thiscontinues to stand as good law through-out Canada. In consequence, I am of the view that the correct

interpretation of the law is this: inan action for damages arising from termination of employment without cause, there is a presumption that common law damages shouldbe awarded, but that presumption can be rebutted upon evidence of an existing employment contract which can effectively withstand themyriad of potential legal arguments which may be raised, and which may allow a court to set it aside. [23] There are several legal reasons why an employment contract will not bind the parties.

Some of these reasons have been set out inToronto-Dominion Bank v Wallace (1983), (ON CA), 145 DLR (3d) 431 at para 56: In these circumstances, it cannot be properly concluded, in my view, that the parties were not consensus ad idem and that the contractwas unenforceable on that account.

If the plaintiff intended to displace the normal rule that a party signing a written document is taken tohave manifested his assent to its contents and is bound thereby in the absence of fraud, misrepresentation, non est factum, mistake orsome other recognized basis for invalidating the document, the allegation to this effect ought to have been made.

In the absence of suchallegation, the Bank’s contention that the binding effect of the contract was not in issue is beyond dispute. [24] Put another way, contracts which are intended to govern any given relationship (including an employment relationship) may beheld by a court to be null and void for a variety of reasons. Fraud, misrepresentation, non est factum and mistake are a few of thesereasons but these are not pertinent to this action because there is no evidence to support these contentions.

However, there are others.While I do not intend to speak to all of them (because they are not applicable to this action), there are three situations which do haveapplication: unconscionability, ambiguity and illegality. [25] A contract of employment may be found to be unconscionable and therefore not binding on an employee, but unconscionability demands consideration of certain factors.

Our Court of Appeal in Input Capital v Gustafson, 2019 SKCA 78, 438 DLR (4th) 387 hasrecently reiterated these threshold considerations at para 26: [26] Overall, the combined Kreutziger approach to unconscionable transactions finds expression in Saskatchewan in Dolter v. MediaHouse Productions Inc., 2002 SKCA 140, 227 Sask R 153 where this Court reversed the judgment in Dolter v.

Media House ProductionsInc., 2002 SKQB 228, 220 Sask R 271 [Dolter QB], but took no issue with the way Klebuc J. (as he then was) had identified andsummarised three threshold factors for an unconscionable transaction (at para 20): . . . 1. Significant inequality in bargaining position exists between the parties based on factors such as the relative knowledge and educationof the parties, the financial needs of the weaker party, or other circumstances that coerced the weaker party; 2.

The stronger party has used its position of power in an unconscionable manner to achieve a material advantage over the weaker party.If it has not, then the bargain should not be interfered with even though it may be viewed as improvident, provided that it does nototherwise offend the third threshold factor hereinafter stated. 3. The bargain arrived at has given the one party a grossly unfair advantage over the other, or otherwise is sufficiently divergent fromcommunity standards of commercial morality to warrant it being set aside.

Thus, if the bargain is fair the fact one of the parties was at amaterial disadvantage because of ignorance, need or other distress is of no moment. [26] On the evidence before me I can find no inequality of bargaining power. Mr. Pederson is a sophisticated businessperson who haddealt with employment contracts previously. I have concluded that he is both knowledgeable and educated. There is no evidence that anyfinancial need of Mr. Pederson induced him, unfairly, to enter into this agreement, nor is there any evidence of coercion.

Nor is there anyevidence that Brandt used its position of power in an unconscionable manner to achieve a material advantage over Mr. Pederson. [27] Mr. Pederson was employed prior to accepting this job. Brandt’s employment contract was given to him to review for a periodof between seven and ten days. He was given full opportunity to consult counsel, which he felt was unnecessary. He was given theopportunity to negotiate its terms - and he did so to his advantage. Finally, there is no evidence whatsoever to conclude that the bargainarrived at has given Brandt a grossly unfair advantage over Mr. Pederson.

The contract appears, at least on the evidence before me, toprovide a relatively generous income and car allowance, and the prospect of a significant bonus, to a mid-level business professional. Forthese reasons I find that there would be no factual or legal basis upon which to find that the contract should be set aside based onunconscionability.

[ 28 ] A contract may be invalidated if its terms are so ambiguous that a court cannot rationally understand the impact of its terms and conditions. Alternatively, a court is free to employ the contractual interpretative tool of contra proferentem in order to resolve an ambiguity. G.H.L.

Fridman, in his text, The Law of Contract in Canada , 4 th ed (Thomson Canada Ltd., 1999) explains contra proferentem, at pages 495 and 497: In cases of doubt, as a last resort, language should always be construed against the grantor or promisor under the contract. … Where the contract is ambiguous, the application of the contra proferentem rule ensures that the meaning least favourable to the author of the document prevails. This interpretive aid is used only when a court concludes that the meaning of the term or condition of a contract is reasonably capable of two or more meanings.

In that event, the ambiguity is resolved by the court by interpreting that ambiguity in a manner which favours the promissee. This arises, more often than not, and as Fridman notes at page 496 -497, ‘where the signatory does not really have the opportunity to negotiate its terms but is obligated either to agree, and sign, or forgo whatever advantages such a contract might bring him’. [ 29 ] However, I do not find the termination provisions of this employment contract to be ambiguous.

Article 9.2 authorizes Brandt to terminate the agreement ‘immediately and without notice for just cause, or to terminate the agreement before its expiry date, without cause or reason, by giving the Employee 60 days’ notice … (or at Brandt’s option, pay in lieu of notice), which shall include all payments or entitlements to which the employee is entitled in respect of notice and severance pursuant to the relevant provincial employment or labour standards legislation’.

I am satisfied that the parties clearly understood that 60 days’ notice meant the equivalent of two working months’ notice or pay in lieu, inclusive of any statutory entitlements that are required to be made by legislative mandate.

Article 9.3 subsequently clarifies how pay in lieu of notice will be calculated. It is “on the basis of the employee’s annual base salary as of the date he receives notice of termination. Bonuses and other forms of additional compensation will not be considered part of the Employee’s annual base salary. The Employee’s right and entitlement to any performance bonus shall terminate effective as of the earlier of (

i) the date of termination, or (ii) such date prior to termination of employment as may be stated in

Schedule “B” to this agreement. [ 30 ] In my view, Mr. Pederson’s entitlement to a bonus upon termination is clearly and unambiguously circumscribed under the contract. It was subject to certain prerequisites that are clearly articulated in that contract. First, it was discretionary. The contract stipulates that it was subject to him meeting company objectives set from time to time; that it would only be paid, if earned, after finalization of Brandt’s annual audited financial statements; and only then, if he was, at the requisite time, an active employee employed by Brandt at the end of Brandt’s fiscal year.

The contract further stipulated that for the purposes of the agreement, an ‘active employee’ is one who : (

i) is at work and performing duties for Brandt; and, (ii) does not include an employee whose employment has been terminated and in receipt of pay in lieu of notice. The clauses ‘at work’ and ‘performing duties’ should, in my view, be read as conjunctive. Taken together, they would anticipate both a physical presence and active engagement in the responsibilities that the job entailed.

Even then, it clearly indicates that even if this pre-requisite is met, one is still not an active employee, for the purposes of a bonus entitlement if the employee has received pay in lieu of notice. [ 31 ] On the facts before me, Mr. Pederson did not, in Brandt’s estimation, meet the company’s objectives. He was not, when the discretionary bonus was to be considered (after October 31 of 2018), actively employed, because by that time he was not at work and performing duties. He had, in fact, received payment in lieu pursuant to the termination provisions of the contract.

Therefore, any ‘entitlement’ that he would have had to a bonus upon termination was precluded by virtue of the circumscribed limits on that entitlement. In my view, none of these circumscribing limits, objectively viewed, can be seen to be ambiguous, in the sense that they would admit of any other

interpretation than the plain reading of the words suggests. [ 32 ] If the contract is neither unconscionable nor ambiguous, can the contract be set aside by reason of illegality? By illegality the court does not mean illegal in a criminal context. Rather, in the context of whether it meets, or detracts from, the legal requisites demanded of employers under employment and labour standards legislation. Contracts which do not meet the minimum standards set out under these types of legislation have been held to be unenforceable because they are contrary to the law. Mr.

Pederson has submitted, for this court’s consideration, the decision of the Ontario Court of Appeal in Waksdale v Swegon North America Inc ., 2020 ONCA 391 , 446 DLR (4 th ) 725 [ Waksdale ]. In that case, the court determined that a termination clause in an employment contract that attempts to contract out of the minimum standards of Ontario’s equivalent of The Saskatchewan Employment Act , SS 2013, c-S-15.1 [ our Act ] is unenforceable. I agree with that court’s pronouncement and I accept it as good law. However, it does not, in my view, assist Mr. Pederson on the facts before me. [ 33 ] Mr.

Pederson’s argument is predicated on the fact that the termination provisions set forth in the agreement compelled him to provide thirty days’ notice if he choose to terminate the agreement, and he asserted that this was in violation of our Act - because “our Act only demands that an employee give two weeks’ notice”. He argues, and I think correctly, that Waksdale stands for the proposition that if one term of the contract is in violation of the employment legislation that governs the parties, then, any severability provision that is also set forth in the agreement cannot allow the contract to survive.

If the contract fails, he asserts, then this court must assess common law damages without regard to the agreement which is found to be unenforceable. Following that line of thought, he asserts that because this court would likely conclude that he would be entitled to, at minimum, three months’ common law notice, he would have been actively employed past October 31 of 2018. As such he would have met the criteria for his entitlement to a discretionary bonus. [ 34 ] His assertion that he would have met these criteria is based on the Supreme Court of Canada’s decision in Matthews v Ocean

Nutrition Canada Ltd., 2020 SCC 26, 449 DLR (4th) 583 [Ocean Nutrition]. In that case, our Supreme Court concluded that thewrongfully dismissed employee should be entitled to obtain any of the benefits that he would have been entitled to had he not beenterminated, for so long as the notice period runs. This, because, a restriction that a benefit was not paid because a plaintiff was not ‘full-time’ or ‘active’ does not remove his right to damages for that loss component because, but for the wrongful termination, he would havebeen ‘full-time or ‘active’. [35] Respectfully, I conclude that the argument must fail.

Our Act does not say that an employee need only give two weeks’ notice.Section 2-63(1) of our Act states that an employee must give written notice of at least two weeks. There is nothing in our Act whichprecludes parties contracting for a longer period of notice. As such, the contract does not, for that reason fail for illegality. [36] Arguably, Mr. Pederson could invite this Court to conclude that a bonus, even a discretionary bonus, constitutes a ‘statutoryentitlement’. However, I can find nothing in our Act which finds this to be so. The combined effect of sections 2-60 and

Section 2-61 ofour Act sets the minimum statutory notice that must be given to an employee with Mr. Pederson’s years of service at two weeks. Thepayment that must be made by an employer, must be equal to ‘the sum earned by the employee during that period of notice’ [emphasisadded]. Even if I could conclude that Mr. Pederson was somehow ‘earning’ two weeks of discretionary bonus in the last two weeks ofhis active employment; and even if I could conclude that Brandt would be legally obligated to exercise their discretion to pay the entiretyof a discretionary bonus to Mr.

Pederson (which would be up to $30,000.00); then the pro-rated amount of that sum for Mr. Pederson’sprevious two weeks of employment would equate to $1,153.84 of ‘earned discretionary bonus’. If I could come to all of theseconclusions, I would still have to recognize that the amount actually paid to Mr. Pederson - equivalent to two months’ salary - is in anyevent well in excess of the required minimum amount that has to be paid under the legislation - which would be one pay period in thesum of $4,750.00 together with the further sum of $1,153.84.

In short, Brandt would still be paying a sum of money well in excess ofthe statutorily mandated minimum. [37] Issues

a) through

e) are answered as follows: While Mr. Pederson has a prima facie right to seek common law damages fortermination of his employment without cause, this right has been rebutted. The employment contract that he entered into was notunconscionable, ambiguous, or unenforceable by reason of a violation of prevailing labour standards legislation. Because Brandtcomplied with the terms of the contract when it terminated Mr. Pederson, Mr.

Pederson’s claim is dismissed with costs in favour ofBrandt. [38] That stated, because a judge may, on appeal, subsequently be found to have erred in its assessment of the facts or the law, I amobligated to explain what I would have found if the agreement had been set aside. [39] If I had set aside the agreement and assessed common law damages, then, in consideration of those factors set forth in Bardal vGlobe & Mail Ltd. (1960), (ON SC), 24 DLR (2d) 140 at para 21, I would have awarded Mr. Pederson three months’notice.

I do so having regard to the fact that he was, at the time of his dismissal: 50 years old and approaching the peak of his earningpotential; he has a broad and diverse previous history of employment and that his expertise would be broadly transferable; he had beenemployed for a relatively short period of time - about thirty-two months; he was able to secure employment within a relatively short timeof his termination, evidencing a somewhat robust employment environment; and, he suffered no medical impediment which would in anyway limit his future prospects. The decisions cited by Ms.

Butler, which identify comparable factual scenarios are apropos. In Goodall vWakefield Home Builders Inc., 2013 BCPC 43 the court awarded a 53-year-old construction supervisor who had been employed for 3.5years, three months’ notice. In Lum v Shaw Communications Inc., 2004 NBCA 35, 270 NBR (2d) 141, a 45-year-old marketing managerwho had been employed for two years was awarded 2.5 months’ notice. [40] Had Mr. Pederson been given three months’ notice, then that notice would have run until November 22, 2019.

This would meanthat the notice would have run beyond October 31, 2019, the time when Brandt’s Audited Financial Statement would have beencompleted. If the bonus was non-discretionary, M. Pederson would have bene entitled to that additional benefit, which I find would havebeen $30,000.00.

But the bonus was purely discretionary. [41] In Ocean Nutrition, at paras. 53-53, the Supreme Court has recently confirmed that a court should take a two-step approachwhen deciding whether an employee is entitled to compensation for a bonus during a notice period: would the employee have beenentitled to the bonus … as part of the compensation during the notice period: and, if so, do the terms of the employment contract orbonus plan unambiguously take away or limit that common law right? [42] Since I am dealing with what the court might decide if the employment contract had been unenforceable, I need only concernmyself with the first part of that equation - would Mr.

Pederson have been entitled to the bonus during the notice period? The answerwould be yes if the bonus was non-discretionary. Does the entitlement change because the bonus was discretionary? [43] Brandt argues that there should be no entitlement. It argues that because Mr. Pederson’s goals had not been met, and becausethey felt his performance was declining, Brandt would not have exercised its discretion. [44] The issue of payment of a discretionary bonus following a termination without cause was dealt with by Wright J. in Carignan vNu Salt Corp., 2000 SKQB 324, 197 Sask R 108 [Carignan].

That court canvased the relevant legal authorities at paras 9 -12: [9] The bonus she claims is a more troublesome issue. She relied on the decision in Leduc v. Canadian Erectors Ltd. (1996), (ON SC), 18 C.C.E.L. (2d) 216 (Ont. Gen. Div.). In that case the court had to consider whether Leduc should recovercompensation for loss of what was described as a "discretionary" bonus. The trial judge outlined the following criteria in analysing thelaw (at pp. 229-30): From my review of the authorities, with respect to bonuses, I have distilled the following principles:

(

a) The starting point is always to attempt to determine if there is any evidence of the intention of the parties regarding the entitlement to,and the quantification of, the bonus. (

b) Bonuses probably can be classified into 3 categories: (

i) formula bonuses (ii) quasi-formula bonuses (iii) non-formula bonuses. (

c) A formula bonus is one that is determined by means of an arithmetical formula. (

d) A quasi-formula bonus is one that is determined by means of certain factors, some or all of which are subjective in nature. (

e) A non-formula bonus is one that is determined by the employer without the obligation to take into account specified factors or toweigh factors in a specified manner. (

f) If, in the case of quasi or non-formula bonuses, they are routinely awarded in a certain amount or in a certain range, they should beincluded in the assessment of damages, just like any other fringe benefit. (

g) In the case of quasi or non-formula bonuses, which, due to their very nature, require an element of discretion, that discretion must beexercised reasonably and, wherever possible, on the basis of objective criteria. (

h) A bonus scheme that, historically, has become an integral part of an employee's wage or salary structure is a benefit that has a valueand should form part of the calculation of the employee's damages. (

i) If the historical conduct of the parties gives rise to a reasonable expectation of a bonus, then the bonus is a benefit that has a value andshould form part of the calculation of the employee's damages. (

j) A distinction must be made between the entitlement to a bonus and the quantification of the bonus. If the former is established thecourt will grapple with the latter. He then went on to say this at p. 231: ...Based upon the entirety of the evidence I find that, on a balance of probabilities, the plaintiff, but for his dismissal, would havecontinued to do work for the defendant both in his capacity as a Construction Engineer/Project Manager as well as in the designengineering department and, as such, would have received a bonus of $2,250.00 for the year 1994. [10] The defendant relies on a number of decisions including Kenzie v. Standard Motors

(77) Ltd. (1985), (SKKB), 40 Sask. R. 228 (Sask. Q.B.). In that case Mr. Justice Maurice considered the issue of discretionary bonuses. He had this to say atpp. 231-32: [11] In 1979, the company began paying a bonus based on its net profit to department heads. This bonus was divided among five

department heads, of which Kenzie was one, as the management of the company thought fit. One half of the bonus was paid at the end ofthe year and the other one half was paid at the end of June the following year. Kenzie was paid a bonus for 1983, one half at the end of1983 and the final instalment on termination of his employment in June, 1984. Kenzie claims damages for the bonus he would havereceived for the period of reasonable notice. An employee is only entitled to recover, by way of damages, a bonus he was entitled toreceive under the contract of employment (Bardal v. Globe and Mail, supra).

In this case the bonus was a discretionary one. Thecompany was not obligated by agreement to pay a bonus and probably would not have paid any bonus to Kenzie during the period ofreasonable notice, if he had continued to be employed by it. He is not entitled to damages under this heading. [11] In my respectful view, the conclusion expressed in Kenzie more accurately reflects the law in Canada and certainly in theProvince of Saskatchewan. In that respect, I refer to the decision of the Saskatchewan Court of Appeal in Herbison v. IntercontinentalPackers Ltd. (1983), (SK CA), 29 Sask. R. 296 (Sask.

C.A.) where a bonus was denied to an employee. The Court ofAppeal reversed the trial judge's decision, and in the course of doing so, made these remarks at p. 300: [12] His [i.e. the plaintiff's] employment was terminated November 12th, 1980, or about five and one-half months into the period duringwhich he was entitled to the incentives and bonuses.

The termination, without notice, and without cause, deprived him of these bonusesand incentives, not only for the five and half months, from June to November, during which he worked, but for the ensuing six and halfmonths, ending May 31st, 1981, during which he did not work for the company. He is entitled to recover this loss. However, thecompany was under no obligation to pay him any incentive or bonus payment thereafter, and that, in my opinion ends the matter.... If I were in any doubt, however, and I am not, that doubt is dispelled by the acknowledgement signed by the plaintiff in November, 1997.

Conclusion: [12] The plaintiff will have judgment for the sum of $24,206.00 ($3,458.00 × 7) less the sum of $4,788.48 paid to her on termination.She is also entitled to pre-judgment interest and costs to be taxed. [45] To my knowledge, Carignan has not been overruled by our Court of Appeal and I consider it binding on this Court. Had I foundthat Mr. Pederson was entitled to common law damages I would not have found him to be entitled to the discretionary bonus either inpart or at all. [46] Had Mr. Pederson been successful, he would have been entitled to his court costs.

I would have awarded him the cost of filingand service of his claim under section 36(1) of The Small Claims Act, 2016, SS 2016, c S-50.12 I would also have awarded him furthergeneral costs equal to 5% of the amount that he would have been awarded, having due regard to the factors set forth in section 36(3).This would have equated to $475.00 since he would have been awarded an additional one month pay in lieu.

I would not have awardedhim the monies he sought which constitute payment of legal fees made to his lawyer for the provision of legal advice as these wouldconstitute legal fees and they are not properly considered as court costs under

section 36. [47] Because I have dismissed the action, Brandt is entitled to its costs calculated by reference to the amount of the claim that hadbeen advanced by Mr. Pederson and which stood at $30,000.00. It is my practice, all other factors being equal, to award costs to asuccessful party in the sum of 5% of the amount claimed against them unless the defendant could prove that they had made an offer tosettle for more than that ultimately awarded - this to reflect the Queen’s Bench practice of awarding double costs when a party hasattempted to resolve a claim on terms better than they obtain at trial.

There was no evidence of such an offer being made. As such Iaward general damages to Brandt in the sum of $1,500.00. It seeks out of pocket expenses of $50.00 for its Reply filing fee and thefurther sum of $508.85 which constitutes printing charges. I do not know how much of this related to the brief that was filed, and howmuch was charged to Brandt for services rendered. As such, I will reduce that to the lesser sum of $100.00, for a costs award of$1,650.00. ______________________ P. Demong, J