Client Win: Sales VP Wins Six Months’ Severance After Contractor Service Counts

Samfiru Tumarkin LLP secured six months’ severance for an LED sales vice-president by showing that his earlier work as a contractor counted toward his service. Our team also won a separate award for commissions and a bonus owed to his company.

Mark Doughty had moved from providing services through his own company to full-time employment at EcoPower Inc. Less than two months after that change, he was fired without notice or severance. He was 61 years old.

Doughty and his company were represented by Chantel Goldsmith of our Toronto employment law team.

EcoPower Left Compensation Unpaid And Did Not Defend The Case

When Doughty became an employee, EcoPower still owed his company commissions and a bonus from the earlier contract. It acknowledged US$55,219.71 in outstanding compensation and paid US$10,000, leaving a substantial balance.

Doughty and his company sued. EcoPower did not defend the lawsuit or attend the hearing, despite receiving notice.

Our team still had to prove the claims and the amounts owed. We presented contracts, sales records and sworn evidence so the court could decide the case.

How Our Team Made His Contractor Service Count

Looking only at Doughty’s payroll start date would have missed most of his time with EcoPower. His title, responsibilities and reporting duties were essentially the same before and after he became an employee.

Our team showed that his company had worked only for EcoPower. The judge found that his earlier role was that of a dependent contractor—someone working as a contractor but relying on that business for their work and income.

The court counted 17 months of total service. Considering that service, his senior role and his age, it awarded compensation based on six months’ notice.

Our team also used the sales records and contract terms to prove the unpaid commissions and bonus owed to Doughty’s company.

Read the full decision: Mark Doughty v. EcoPower Inc., 2021 ONSC 3923.

What This Means For You

• Your service may start before your first day on payroll. Earlier contractor work can matter when the relationship was continuous and you relied on the same company.
• Severance is not always just base salary. Commissions and other compensation can affect the amount owed. Our guide to executive severance in Ontario explains what to review.
• Keep your agreements and sales records. They can help prove unpaid compensation. A review of your executive employment contract can also clarify how a change in your working arrangement affects your rights.

A Lesson For Employers

Moving someone from contractor to employee does not necessarily reset their service. Unpaid commissions and bonuses can also remain owing after the relationship ends. Ignoring a lawsuit does not prevent the court from ordering payment.

Related client win: Our team won six months’ severance for a tow truck driver misclassified as a contractor.

Contractor First. Employee Later. Owed More?

If you have been let go or are still waiting for commissions or a bonus, do not assume your employer’s calculation tells the whole story. Your severance could be as much as 24 months’ pay.

Our Ontario employment lawyers, including our Toronto executive severance lawyers, can review your full working history and compensation, explain what you may be owed and handle the next steps.

Getting started is simple: contact Samfiru Tumarkin LLP for a review. Many severance disputes can be resolved without going to court.