Digging up the past – Ontario court orders employer to produce past severance packages in wrongful dismissal claim

By: Amanda Pizzardi

An Ontario court has recently compelled an employer in a wrongful dismissal action to produce termination packages of previously dismissed employees as well as details about how the defendant determined said packages – two questions that the employer refused to answer during discoveries.

In Saarinen v. Rogers Communications Ltd., 2023 ONSC 4328, the plaintiff brought a motion compelling the defendant employer to answer two refused questions asked at the examinations for discovery of the defendant’s representative. The disputed questions were the following:

• To produce the termination packages of all employees (names of said employees may be redacted to only provide first initials) who had more than 25 years of service and were terminated without cause by the Defendant during the period of January, 2017 to December, 2019.
• To advise of the Defendant’s Human Resources department’s practice in determining in January, 2019 what termination packages would be offered to employees who were terminated without cause and did not have a written employment agreement, who made said determination, and whether there were any general guidelines, written or otherwise used regarding:
• • Length of notice;
  • Claw-back use;
  • Short-term incentive inclusion;
  • Long-term incentive inclusion;
  • Pension;
  • Other benefits;
  • Outplacement;
  • Legal fees; and/or
  • Other.

The defendant refused to answer the questions on the basis of relevance, and later asserted at the motion (for the first time) that the questions were also refused on the basis of privilege.

The Court first noted that termination packages offered to other employees would ordinarily not be relevant to the determination of the applicable reasonable notice period for the plaintiff under the common law, and as such, if the plaintiff’s claim were based solely on a common law entitlement, the requested information and documents would not be relevant. However, the plaintiff alleged in her claim that she was wrongfully dismissed and that based on the implied terms of her employment contract and the defendant’s policies, she was entitled to a termination package that included 24 months compensation with no mitigation requirements. The court therefore held that in light of the pleadings, the disputed questions were relevant.

Regarding the issue of privilege, the Court noted that the defendant failed to file any evidence to support its assertion that the sought after information were subject to settlement privilege, but instead asked to the court to infer that any communications and offers it made to terminated employees were per se made on a without prejudice basis and that, therefore, they are all privileged. The Court rejected the defendant’s submission, stating that without any evidence for its position, it could not find that settlement privilege applies.

Key Takeaway: Aside from reminding us about what courts assess to be “relevant”, this decision provides us with two takeaways for employment lawyers (or counsel generally):

• If you are representing an employee: think before you plead. Instead of pleading an issue broadly, think about what would be useful evidence to obtain at discoveries and ensure the pleadings specifically address those topics. This decision reminds us that what is considered “relevant” for the purposes of discovery is driven by the pleadings in the action.
• If you are representing an employer: evidence is key. If you maintain a refusal at an undertakings motion, be sure to provide evidence as to why the question should not be answered. Broad or bald assertions, without any evidence to support those assertions, will not persuade a court.