Written on behalf of Peter McSherry
In many circumstances, money is often considered a taboo subject, particularly in the workplace. Compensation in the form of a severance package can also be a primary consideration for an employee who has been terminated from their job. Generally, employees do not know particular details about their colleagues’ salaries or severance packages. However, in a previous blog post we covered a decision where an employer was compelled by the court to divulge severance packages that had been offered to other employees.
In a recent decision from the Ontario Superior Court of Justice, the Court considered an employee’s action for wrongful dismissal in which the employee sought an order requiring the employer to answer particular questions regarding other employee’s terminations.
In Khatib v Goeasy Ltd., the matter related to a wrongful dismissal action for which a trial date has been set. Leading up to the trial, the plaintiff employee sought to receive information from the defendant employer as the employee claimed that the employer let other executives keep their unvested restricted share units and shares upon their termination, however, the employer did not do the same for the plaintiff, and this was purportedly evidence of bad faith. The plaintiff therefore claimed $1,613,596 in compensation, the value of his share units and shares.
The employee’s claim that other executives were allowed to retain their shares resulted in the employee bringing a motion seeking an order requiring six former employees to be examined for discovery and produce termination-related documents, under Rule 30.10 (discovery of non-parties with leave). This came after the employer’s representative refused to answer three questions relating to the termination of other employees at examination for discovery, claiming the questions were irrelevant and settlement privileged.
At the hearing, the employee asked the Court to grant leave, which would delay the scheduled trial, to allow them to file another motion to compel six previous employees of the employer to provide details of their severance packages at a discovery hearing. However, the employer did not want this discovery to take place. The employee’s request was denied by the trial judge, which led to an appeal of that decision. In arriving at its decision, the Court wrote that:
“(The) plaintiff has known that the defendant has refused to provide the information sought since examinations for discovery were conducted in March 2021 and knew that the defendant was continuing to refuse to provide the information when the plaintiff set the matter down for trial a year later. There is no evidence in the record before me of any substantial or unexpected change in circumstances that would justify an order granting leave. The plaintiff’s motion is therefore dismissed.”
The trial judge did not suggest that the former employees could not provide relevant evidence, but rather, denied the employee’s request as the opportunity for discovery had passed. Therefore, the Court noted that the litigation process should not be slowed down simply because the employee suddenly wanted to broaden the scope of discovery.
The employer agreed with this finding, noting that the request for leave to bring a motion for discovery of former employees was precluded by issue estoppel. Issue estoppel is a legal concept that prevents an issue that has already been litigated from being re-litigated with the possibility of a different conclusion being reached.
The test for granting leave
The Court referenced the earlier Court of Appeal of Ontario decision in Horani v. Manulife Financial Corporation, which set out the test for granting leave to bring such a motion. In order for leave to be granted, the moving party must show that there has been a “substantial or unexpected change in circumstances such that a refusal to make an order…would be manifestly unjust.” If this is established, the Court must then determine whether the interests of justice require leave to be granted. The Court also acknowledged that this is not a general test that should be applied consistently in every case. Instead, as noted in the case of Fulop v. Corrigan, the approach should be flexible and the Court must consider several factors, such as:
(1) what the party seeking leave knew at the time of the passing of the trial record;
(2) whether there has been a substantial or unexpected changed in the circumstances since the action was set down for trial;
(3) the purpose of the request for leave;
(4) the nature of the relief being requested;
(5) whether the party opposing the relief would suffer any prejudice; and
(6) whether the relief sought would likely be granted if leave were given to bring the motion notwithstanding the filing.
During the discovery, the employer argued that information about the termination of other employees was irrelevant and privileged and maintained this position over a series of emails with the employee. These communications continued for approximately one year and in April 2021, the employee signaled that they were ready for trial. The employee stated that they reserved the right to request such discovery even after a trial date had been set.
However, the Court found that simply stating such an intention does not mean the employee would be successful if they chose to do so. The Court went on to write that if the employee intended to pursue the requested information, they should have done so before setting the matter down for trial. Further, the Court highlighted the fact that a motion to reopen discovery could be a lengthy process, given that the other employees may not want to attend discovery and may hire their own lawyers to intervene. Overall, the Court refused to grant the employee’s request for leave and dismissed their motion.
This case stands in contrast to our recent case summary which explored an employee’s successful attempt to receive information about other employee’s termination packages, with the biggest difference between the cases being the timing of the employee’s requests. This decision highlights the importance of working with an experienced employment lawyer who can help determine the best approach in similar situations before it is too late.
Contact Employment Lawyer Peter A. McSherry for Advice on Severance Packages and Discovery in Cases of Wrongful Termination
Guelph employment lawyer Peter A. McSherry has extensive experience reviewing severance packages and representing terminated employees in wrongful dismissal claims. Our trusted employment law team will assess your situation and provide you with comprehensive advice to help you make informed decisions until your matter is resolved. To learn how we can assist you with your wrongful dismissal claim, contact us by phone at 519-821-5465 or reach out to us online to schedule a confidential consultation.