Trial Win: Full severance for Ontario dental receptionist despite termination clause

Henderson v. Slavkin et al.

Employment lawyer Lluc Cerda, Senior Associate at Samfiru Tumarkin LLP, successfully secured full severance pay for his client in the case of Henderson v. Slavkin et al., a matter that was argued at the Ontario Superior Court of Justice (ONSC).

Overview of the case

Rose Henderson was a 63-year-old dental receptionist who had 30 years of service with the defendants, Drs. David Slavkin and Melvyn Kellner, at the time of her termination. She was provided with six months of working notice and her last day was in April 2020.

Five years prior to Henderson’s dismissal, her employers required her to sign a new employment contract with a termination clause that limited her severance entitlements. If she refused to accept, she would have received 24 months of working notice.

The ONSC found that the termination clause was unenforceable and that Henderson was entitled to 15 months of severance. The court also ruled that the defendants were not entitled to reduce Henderson’s compensation by the amount of financial support she received from the Canada Emergency Response Benefit (CERB).

Facts

• Henderson didn’t sign an employment agreement when she began working for the defendants in 1990.
• In 2015, dentists Slavkin and Kellner began to contemplate retirement and the sale of their practice. The oral surgeons had dental offices across the Greater Toronto Area (GTA) and in Bolton, Ontario.
• As part of the transition, the defendants required all staff to sign employment agreements with a termination clause that limited them to the minimum amount of severance pay under the Employment Standards Act, 2000 (ESA). For Henderson, this would amount to only eight weeks of compensation.
• Henderson was told that she could either receive a $500 bonus for signing the agreement or receive 24 months of working notice, which would end her employment in May 2017. She decided to sign the agreement.
• In November 2019, Slavkin and Kellner informed staff that they would be closing the practice and terminating their employment effective April 30, 2020. Henderson received six months of working notice.
• Henderson’s last day coincided with growing concerns about the COVID-19 pandemic. The Ontario government ordered all dental practices to close until at least June 2020.
• Following her dismissal, Henderson received approximately $10,000 in CERB payments.
• Henderson moved from Toronto to Glencoe, Ontario to reduce her expenses and be closer to family.
• In January 2021, Henderson began applying for new positions. She was hired as a front-line worker 18 months after having been told that her job would end in November 2019.

The Court’s Decision

The court ruled that the termination clause in the employment contract that Henderson signed in 2015 was unenforceable because parts of the agreement breached the ESA. Therefore, she was entitled to full severance – minus the six months of working notice that she had already received.

CERB not deductible

Following a trend in recent wrongful dismissal cases, the defendants asked the court to deduct the amount of CERB Henderson had received from her full severance entitlements. The request was declined since there was a risk that Henderson would have to repay the government.

LEARN MORE
• Employment lawyer on paying back CERB

CERB was not designed to compensate Henderson for her wrongful dismissal. The program provides financial support to Canadians that have lost income due to the COVID-19 pandemic.

It was uncontested that what led to Henderson’s dismissal wasn’t pandemic-related. Slavkin and Kellner decided to retire.

Duty to mitigate

Henderson applied for her first job nine months after her dismissal. The defendants argued that her severance should be reduced because:

• She didn’t do enough to look for work.
• She had moved from Toronto to Glencoe, Ontario, where there would be less jobs.

The court agreed that normally, waiting nine months to start looking for work would be too long. However, it was noted that these were not normal times.

Factoring in the COVID-19 pandemic, Henderson’s age, her inability to continue living in the GTA, and her subsequent move to Glencoe, the court ruled that this all impacted her ability to apply for and secure new employment.

LEARN MORE
• How to calculate a severance package
• Severance pay in the dental industry

Given the circumstances, the court decided to reduce Henderson’s severance entitlements from 18 months to 15 months.

Lesson for employees

• Make the effort to find a new job: Even when unprecedented events like the COVID-19 pandemic wreck havoc on the job market, you still need to look for work if you are fired or let go. While courts can be understanding when times are tough, the best defence is to continue applying for similar positions or jobs in a related industry. Keep a record of all the jobs you applied to and contact an experienced employment lawyer at Samfiru Tumarkin LLP. Our team can review your situation and ensure you receive the compensation you are owed.

Lesson for employers

• Employment contracts must comply with ESA: All clauses in the employment agreement dealing with termination, and potentially any clause in a document outside of the contract, such as a policy or a bonus plan, must comply wit the ESA. In Henderson’s case, failure to do so resulted in a clause becoming unenforceable. Samfiru Tumarkin LLP has employment lawyers in Toronto and Ottawa, serving all of Ontario, who can review your employment contract to ensure it complies with the ESA.