An Ontario company is on the hook for 24 months’ severance after it fired one of its executives without cause
Andries Mellema was let go from his position at Fishercast Global Corp. without cause on Oct. 22, 2004. A termination clause in his employment contract clearly stated that if he was terminated without cause after two years, he would be entitled to 24 months’ compensation. It wasn’t clear from the judgment how long Mellema had been with the company, but it was in excess of two years.
The employer opted to make the termination payments on a continuing salary basis and made payments for 51 weeks from Oct. 22, 2004, to Oct. 15, 2005. But it then stopped the payments and repossessed the company car, which had been provided to Mellema under the terms of the agreement, on Nov. 4, 2005.
The employer claimed Mellema had secured alternate employment with substantially similar compensation to that he enjoyed while with Fishercast. His salary at Fishercast was $300,000 per year along with benefits for a total of about $340,000. His new salary was $204,000 plus $800 per month for a company car allowance.
The employer argued that Mellema had been compensated by both employers from April 18, 2005, (the date he found his new job) until Oct. 15, 2005. If Fishercast continued to pay his salary continuance for another 12 months, Mellema would receive more than $500,000 for that year. It argued the agreement wasn’t meant to cover this kind of double-dipping.
But the court disagreed.
“No matter what canon of construction is applied to the interpretation of the employment agreement, it is clear that (Mellema) is entitled to an additional 12 months’ salary together with the other fringe benefits set out in (his) claim,” the court said.
For more information see:
• Mellema v. Fishercast Global Corp., 2006 CarswellOnt 2882 (Ont. S.C.J.).
The employer opted to make the termination payments on a continuing salary basis and made payments for 51 weeks from Oct. 22, 2004, to Oct. 15, 2005. But it then stopped the payments and repossessed the company car, which had been provided to Mellema under the terms of the agreement, on Nov. 4, 2005.
The employer claimed Mellema had secured alternate employment with substantially similar compensation to that he enjoyed while with Fishercast. His salary at Fishercast was $300,000 per year along with benefits for a total of about $340,000. His new salary was $204,000 plus $800 per month for a company car allowance.
The employer argued that Mellema had been compensated by both employers from April 18, 2005, (the date he found his new job) until Oct. 15, 2005. If Fishercast continued to pay his salary continuance for another 12 months, Mellema would receive more than $500,000 for that year. It argued the agreement wasn’t meant to cover this kind of double-dipping.
But the court disagreed.
“No matter what canon of construction is applied to the interpretation of the employment agreement, it is clear that (Mellema) is entitled to an additional 12 months’ salary together with the other fringe benefits set out in (his) claim,” the court said.
For more information see:
• Mellema v. Fishercast Global Corp., 2006 CarswellOnt 2882 (Ont. S.C.J.).
