A beauty esthetician was awarded 10 months’ reasonable notice after being terminated without cause.
It’s a textbook lesson in how not to present a worker with a new employment contract. (Hint: Don’t hand it to workers mid-shift and demand it be returned before they leave.)
And it also attracted some criticism from the court for an expletive filled and “clumsy, ill-conceived” post-termination meeting where management attempted to convince workers to rejoin the company as independent contractors.
The facts
The worker was an esthetician who worked part-time at the Beauty Express salon inside The Bay at the corner of Bloor Street and Yonge Street in Toronto.
In the latter half of 2019, she was terminated without cause and given working notice of just over 11 weeks.
According to her T4s, in 2017 she earned $12,892. In 2018, her pay was $20,416.88 and in 2019, it was $26,004. In her testimony, she claimed to have worked full time in the years prior to 2017, but there was no documentation to back that up or record of what she earned.
Her employer had a hard-drive problem and likewise had no records prior to 2017.
Both sides agreed the woman worked for Beauty Express for six years, from 2013 to 2019. They also agreed she worked for Premier Salons at the same job, under the same management team and mostly at the same location, from 1999 to 2013. (Premier Salons went bankrupt in 2013, and Beauty Express was selected by Hudson’s Bay Company to operate the salon in the Bay Street store.)
The employment agreement
The woman said she initially worked at Beauty Express full time when she started in 2013, but her hours were gradually reduced to part time – something she was not happy about. She expressed that concern to her manager, took no further action and worked on a part-time basis.
On Feb. 14, 2018 – five years into her role – she was approached by her manager in the middle of the workday and presented with a document titled “Employee Policies and Agreements.” The manager told her to sign and return it before her shift ended.
The document was several pages long, according to the Ontario Superior Court of Justice, and the woman spoke English as a second language.
The court described her command of English as “somewhat halting and incomplete.”
The woman said she did not have time to read the document, as she was busy with customers. But she did notice the agreement did not guarantee her a certain number of hours each week. That concerned her, as she had already expressed unhappiness about a reduction in hours over the years.
The termination clause
The document contained a lengthy termination clause (full text at bottom below). It read, in part:
You hereby agree that the Company may terminate your employment at any time without cause and you shall have no claim against the Company for any termination pay and/or severance pay, whether under the applicable provincial legislation or under the common law provided the Company provides you with that length of notice or pay in lieu of notice, and severance pay, if any, to which you are entitled under the applicable provincial Employment Standards Act.
The woman testified she wanted to take the document home to review it but felt she couldn’t without causing trouble for herself at work. She said she expressed concerns to her manager about the terms, but she was unreceptive.
She signed it before the end of her shift. She did not receive independent legal advice before executing it, despite the fact the agreement stated she had the opportunity to do so — she did not “realistically” have a chance to do so, the court said.
Further, it said it was “abundantly clear” she received no consideration in return for signing the document.
Courts have been clear that, if an existing employee is provided a new contract, there must be fresh considerations given in exchange, it said.
Given the lack of time to review the agreement and the lack of consideration, the agreement was unenforceable, the court said.
Reasonable notice
At the time of termination in 2019, the woman was 69. The court was satisfied that she diligently looked for another job after being let go.
Her age, combined with the COVID pandemic, made her job search difficult and ultimately futile, the court said.
The woman claimed that Beauty Express was a successor employer to Premium Salons, where she began working in 1999. She said she never had notice of the bankruptcy and the transition from one corporate employer to another was so seamless she didn’t know until several months after that it had happened. (The changing of the sign was her clue, she said.)
She kept her same chair, customers and manager and, as far as she was concerned, same employer and job. While she conceded that a bankruptcy is a constructive dismissal, she argued that her time at both Premium and Beauty Express should be counted when calculating the notice period.
Beauty Express said it was legally unrelated to Premium Salons, and her previous years of employment are irrelevant.
The court sort of settled in between those two positions. It noted that a long-term employee is assumed to be of more value to the employer than a new employee who comes from unrelated employment.
But there wasn’t a lot of evidence with respect to the particular character of the woman’s job and value of her long experience. That gave the court “pause,” it said.
It settled on 10 months’ notice as a reasonable amount, less the nearly three months’ working notice she had already received.
Aggravated and punitive damages
The woman claimed she was targeted for reprisal because she complained about her reduction in hours. But there was no real evidence of individualized mistreatment, the court said.
She also claimed she was mistreated in a post-termination meeting held for all the employees who had been let go. That meeting, which took place six weeks after notice was given, was an attempt by the employer to convince workers to stay on in a new arranagement as independent contractors.
“There is no doubt that the meeting was “clumsy and ill-conceived,” the court said.
“The transcript of the meeting reveals that (a manager) wins no award for refinery or tact. His language is crude and peppered with less-than-genteel turns of phrase,” the court said. “He seems to comfortably, almost naturally drop the F-bomb. He testified that he is an accountant by profession and that he has been running businesses for many years and is familiar with employer-employee relations.”
“That may be so, but, to reference a Canadian cultural touchstone, his choice of language is sometimes more Trailer Park Boys than boardroom financier.”
When one employee said her lawyer told her not to sign the proposed new independent contractor agreement, he replied: “A lot of lawyers say stupid things.”
It was wrong, of course, for management to dissuade employees from seeking legal advice, the court said.
“Any challenge to an agreement signed after being told that lawyers are “stupid” and that they only help those who “never f-ing settle” would doubtless succeed,” it said.
While the remarks made at the meeting were insensitive, it was not oppressive nor did it give rise to damages, the employer argued.
The court agreed. It said the purpose of punitive damages is not to police words as one might in school or church. While street language and workplace language make for an uncomfortable mix, and management would be wise to choose its words more carefully in the future, there was no grounds for additional punitive or aggravated damages, it ruled.
The award
There was also a claim for discrimination based on the worker’s age, but that was tossed.
The damages were set at seven months using her 2019 average monthly pay.
For more information, see Chin v Beauty Express Canada Inc., 2022 ONSC 6178 (CanLII)
Appendix: The termination clause
The full text of the termination clause:
Termination Policy – You hereby agree that the Company may terminate your employment at any time without cause and you shall have no claim against the Company for any termination pay and/or severance pay, whether under the applicable provincial legislation or under the common law provided the Company provides you with that length of notice or pay in lieu of notice, and severance pay, if any, to which you are entitled under the applicable provincial Employment Standards Act. Additionally, you hereby agree that the Company may temporarily lay you off as outlined in the applicable provincial Employment Standards Act and you shall have no claim against the Company for any termination pay and/or severance pay, whether under the applicable provincial legislation or under the common law provided that the Company recalls you back to your position within the guidelines specified under the applicable provincial Employment Standards Act. Additionally, you hereby expressly agree that the maximum amount of notice, or pay lieu of notice, and severance pay to which you will be entitled in the event of your termination without cause shall be limited to that amount of notice or pay or pay in lieu of notice, and severance pay if any, to which you are entitled under the applicable provincial Employment Standards Act. In addition, all company benefits, including medical, dental, life disability, vacation, and any other company benefits will continue through the severance and notice period. If you are terminated for cause, you understand and agree that you will not receive any notice or pay in lieu or severance pay. Cause for this purpose includes, but is not limited to, such things as unsatisfactory performance, dishonesty, insubordination and serious misconduct, all as determined in the sole discretion of the Company. You hereby acknowledge that you have been advised of your right to seek independent legal advice in connection with the signing of this employment contract.
