Constructive dismissal nets worker $40K more

A man who opted to continue working for his employer during a dispute over a major pay cut has received a further $40,000 after a judge ruled in his favour late last year.

Lorenzo Russo received nearly $82,000 in damages to cover the difference between his old earnings and his pay under a new wage structure at Kerr Bros. Ltd., a candy manufacturer in Toronto.

The additional $40,000 settled the final four months of his notice period after he left the company following the judgment in November.

The financially troubled manufacturer brought in a consultant to help reduce costs in April 2009 who recommended 10-per-cent pay cuts for workers.

Russo was one of four employees identified for additional concessions.

The 53-year-old had quit school at 16 to work for the company full time and made his way up to the position of warehouse manager to earn $115,000 per year.

The company cut his remuneration to $60,000 per year, but he continued to work while taking the position that it had constructively dismissed him.

On Nov. 2, Ontario Superior Court Justice Douglas Gray decided Russo was able to mitigate his damages by continuing his employment at the lower rate of pay but only until the completion of the period of reasonable notice. Continuing beyond that time would constitute an acceptance of the new terms and conditions, Gray wrote.

Gray, setting the notice period at 22 months, ordered the $82,000 payment to cover the 18 months up until he heard the case.

The judgment in Russo’s favour sped settlement negotiations along, according to his lawyer, K.C. Wysynski of Evans Law Firm in Burlington, Ont.

“Mr. Russo was told his services were no longer required almost immediately after the decision was issued and he was paid for the entire notice period based on the damages calculation used by Justice Gray,” she says.

For more on this story, see "3rd option granted in constructive dismissal."

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