The recent commentary piece by Nikolay Chsherbinin (see “Deductions of disability payments in wrongful dismissals clarified,” Aug. 24) highlights what I believe is a major difficulty inherent in contracts of adhesion where one party, typically the employer, has far greater bargaining power and the employee is essentially left with a take-it-or-leave-it option.
In such instances, the courts often impute the intention of the parties in order to resolve the issues being litigated. In my opinion, while the resolution provides some future guidance for lawyers in the employment bar, it does so to the detriment of the employee who is virtually never given an opportunity to express his or her intentions. As well, the doctrine of contra proferentem, which should be the analytical standard, is usually disregarded. Given that it is the employer who drafts the contract, any doubt or ambiguity should be interpreted in favour of the employee.
In Fernandes v. Peel Educational, the court was tasked with deciding the question of entitlement to double recovery (whether an employee should be entitled to simultaneous payment of notice and disability benefits) in the absence of a clause expressly dealing with that issue. The court came to a decision denying concurrent payment based upon an assumption of the employer’s intentions. It also distinguished previous decisions where concurrent entitlement was only denied if the employer paid the entire premium. Previous decisions held that if the employee paid any portion of the premium, concurrency was the outcome (the basis for which is another fiction into which I will not delve).
In its wisdom, the court distinguished Fernandes from prior decisions on the basis that the employer, and not an arm’s-length third-party insurer, was the payer. According to Chsherbinin, the court held that where the employer was the payer, it would be inequitable to allow double recovery as that would put the employee in a better position than had the termination not occurred. However, double recovery and a preferable position are exactly what occurred in those previous cases. The employee was equally in a better position. However, in Fernandes, the court felt that an employer would never have intended to put itself in that position and decided in the employer’s favour. The court states that the employment contract speaks against the intention of double recovery but does not point to wording to support that statement. The decision makes no reference to the contra proferentem rule.
It may arguably be true that an employer would never knowingly expose itself to make concurrent payments. However, I suggest that it would be incumbent upon an employer to spell that out clearly in its contract. As the contract was silent and it was, at best, ambiguous in this regard, the court should have decided in the employee’s favour. Absent anything that expressly established the parties’ intentions, I believe the employee should have been successful on this point.
Steinberg Title Hope & Israel LLP,