Case: Ariss v. NORR Limited Architects & Engineers, 2019 ONCA 449 (CanLII)

Keywords: Employment Law; Reasonable Notice; Architect; Employment Standards Act, 2000, SO 2000, c 41

Synopsis:

The Appellant, Mr. Ariss, is a professional architect in Kingston. Starting in 1986, he is employed by Dominik Thompson Mallette, Architects and Engineers Inc. (“DTM”). In 2002, DTM is sold to NORR Limited Architects and Engineers (“NORR”). Mr. Ariss’ employment is continued by NORR.

In 2006, Mr. Ariss signs an acknowledgment of amendments to his employment agreement with NORR which waives his common law entitlement to reasonable notice. (See para. 15). In 2013, Mr. Ariss transitions from full-time to part-time hours (at his request). Following a series of negotiations, Mr. Ariss signs an “Offer of Casual Employment” which includes the following termination language: “Either party may terminate this agreement by providing the minimum notice required under the Employment Standards Act of Ontario.” (See para. 20).

A few years later, Mr. Ariss is dismissed without cause. He is given 3.5 weeks’ notice and benefits for a period of two weeks. NORR does not provide severance pay on termination.

Mr. Ariss brings an action for wrongful dismissal damages under the principle of reasonable notice. The Motion Judge (Justice Sylvia Corthorn, Ottawa) determines Mr. Ariss is entitled to termination and severance pay under the Employment Standards Act, 2000, SO 2000, c 41 (the “ESA”) for his years of service (dating back to 1986). That being said, she finds Mr. Ariss is bound by the 2006 waiver and so not entitled to reasonable notice. The Court of Appeal dismisses Mr. Ariss’ appeal.

Importance:

This case is about the enforceability of terms which purport to waive an employee’s years of service and other entitlements under the ESA, particularly in circumstances where there has been a change in ownership affecting the employee/employer relationship.

With respect to the termination language agreed to by Mr. Ariss and NORR in 2013, the Court of Appeal agreed that, insofar as that agreement attempted to waive his accumulated years of service from 1986, it was contrary to ss. 5(1) and 9(1) of the ESA and void.

As the Court of Appeal explained, s. 5(1) prohibits contracting out of minimum statutory entitlements and provides that any waiver to this effect is void. (See para. 36; see also Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986, at p. 1000).

Additionally, s. 9(1) of the ESA protects entitlements related to length of service where the purchaser of a business (in this case “NORR”) continues to employ individual employees of the vendor (in this case, Mr. Ariss as an employee of “DTM”) after the sale. (See para. 38).

The Court of Appeal referred to Abbott v. Bombardier Inc., 2007 ONCA 233 (CanLII), 85 O.R. (3d) 21, at paras. 18, 20 and Kerzner v. American Iron and Metal Co., 2018 ONCA 989 (CanLII), at paras. 34-35 as authority for the proposition that s. 5(1) invalidates any purported waiver of s. 9(1). The Court of Appeal determined that all of this applied to void the 2013 termination language, as the Motion Judge had found. (See paras. 38-39). Practically speaking, this means Mr. Ariss was entitled to termination and severance pay under the ESA from 1986.

However, with respect to Mr. Ariss’ entitlement to reasonable notice, the Court of Appeal determined that none of this invalidated the 2006 termination clause and its waiver of common law reasonable notice:

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. (See para. 39).

Citing Machtinger at p. 998, the Court of Appeal noted that, absent a clear rebuttal, there is a strong presumption that employment agreements contain an implied term that employees are entitled to reasonable notice. (See para. 40). Here, the Court of Appeal agreed with the Motion Judge’s findings that the 2006 waiver was clear an unequivocal:

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”. (See para. 40).

Counsel for the Appellant: Alayna Miller (Mann Lawyers LLP, Ottawa)

Counsel for the Respondent: Albert Formosa and Caitlin Steven (Weirfoulds LLP, Toronto) *The Who – Won’t Get Fooled Again

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