Employer Seeks to Move Matter to Small Claims Court

Written on behalf of Peter McSherry

Small Claims Court is a relatively quick, efficient and less formal forum available to a party seeking to commence a lawsuit for damages of $35,000 or less. Small Claims Court may also hear various employment law matters, however, claimants need to bear in mind the maximum damages they will be able to recover. In a recent Ontario Superior Court of Justice decision, an employee commenced a wrongful dismissal claim against his former employer in the Superior Court of Justice. However, the employer sought to move the matter to Small Claims Court instead in order to limit the potential damages that the employee could recover.

Employee alleges constructive dismissal during COVID-19

In the matter of Martin v Stainless Process Equipment Inc., the employee filed a statement of claim on March 22, 2022 under the Simplified Rules, claiming that he had been constructively dismissed from his employment on December 13, 2021. The employee sought $43,000 in damages directly related to his wrongful dismissal, which was equal to an eight-month notice period inclusive of vacation pay. The employee also submitted that the employer discriminated against him on the basis of disability. The total damages the employee sought to recover amounted to $173,000.

The issues that the employee claimed led to his wrongful termination began on October 4, 2021. The employee alleged that the employer unilaterally changed the terms of his employment when the employer required him to get a COVID-19 vaccine or, in the alternative, submit to COVID-19 testing every 72 hours. These rules were outlined in a COVID-19 policy developed and implemented by the employer. The employee claimed that no accommodations were made with respect to this policy.

Employee placed on unpaid leave following non-compliance with vaccination policy

On December 13, 2021, the employee stated that he was placed on an unpaid leave of absence as he did not confirm that he had received the COVID-19 vaccine and could not pay for COVID-19 testing every 72 hours. He told the Court that no accommodations were made for this policy. However, he argued that he was entitled to a reasonable notice period of eight months following his termination as a result of his failure to comply with the policy.

The employer argued that the employee resigned or abandoned his job when he refused to get the vaccine or provide regular test results. The employer’s statement of defence indicated that the employee was placed on unpaid leave for a reasonable purpose, and that unpaid leaves of absence related to COVID-19 do not constitute constructive dismissal. Further, the employer stated that it added gratuitous paid hours to the employee’s timesheets so that he was not out of pocket for the cost of the COVID-19 testing.

The employer also provided the Court with an affidavit stating that the employee was able to find new employment at a comparable wage only three months after their employment relationship concluded. The employer argued that if damages were awarded, they would be within the jurisdiction of the Small Claims Court. Therefore, the employer sought to transfer the matter there.

Can a matter be transferred to Small Claims Court?

The Court began by acknowledging that the defendant’s request was not within the jurisdiction of Small Claims Court because, on its face, the plaintiff’s claim exceeded the maximum Small Claims Court award. The plaintiff had also not conceded that damages from his claim would be below $35,000. The Court noted that the defendant failed to identify previous cases where a motions judge transferred a case to Small Claims Court when the plaintiff objected to the transfer. Further, there was no evidence to suggest that a wrongful dismissal claim had ever been transferred to Small Claims Court.

However, this does not mean that a matter filed in the Superior Court of Justice cannot be heard before a Small Claims Court. For example, a plaintiff may commence a claim and, upon receipt of a statement of defence, may realize that their claim may not result in the damages they originally claimed. A similar situation occurred in the 2019 case of Royal Bank of Canada v. Lendak, where the Court stated that ​​”there is no reason or need for this case to be litigated in the Superior Court of Justice” and the case was transferred to the Small Claims Court.

Court declines to transfer case to Small Claims Court

Further, even if the damages claimed were within the jurisdiction of Small Claims Court, the Court would be required to undertake a partial assessment of damages and ultimately determine that some elements of the plaintiff’s claim were not viable. In this case, the employer sought to dismiss portions of the employee’s claim related to human rights violations and the length of reasonable notice, which should be adjusted due to the employee’s ability to find new work.

However, in order to find in favour of the employer’s argument, in essence, the Court would have to provide a partial summary judgment. Once again, there was no case law provided to the Court that showed this had been done in the past.

The Court ultimately agreed with the employee that it was not within the interests of justice for the matter to be transferred to Small Claims Court, and the employer’s motion was dismissed.

Call Guelph Employment Lawyer Peter A. McSherry For Advice on Wrongful Dismissal and Severance Packages

If you believe you have been wrongfully or constructively dismissed by your employer, it is crucial to consult with an experienced employment lawyer as soon as possible to ensure that your rights are protected and you receive appropriate severance and other entitlements. Peter A. McSherry and his employment law team understand how confusing and unnerving a termination can be, which is why we help clients under their rights and statutory minimum entitlements upon the breakdown of the employment relationship. Our team will provide you with the resources and necessary knowledge to ensure that your employment law dispute is resolved quickly and effectively so that you can make informed decisions moving forward. To learn more about how we can help you, contact us online or call us at 519-821-5465.