By Stephen Dugandzic
Maximenko v Zim, 2024 ONSC 5540 is a significant Ontario Superior Court decision concerning wrongful dismissal and the calculation of reasonable notice and bonuses.
Background
Ms. Maximenko, nearly 59 years old, served as a General Manager at Zim Integrated Shipping Services for almost 21 years, earning approximately $160,000 annually. In March 2023, she was terminated without cause. Zim offered her eight months’ salary in exchange for a full and final release, which she declined. Consequently, she received only her statutory entitlements and was not paid her 2022 bonus.
Court’s Findings
Reasonable Notice Period:
Justice Brownstone awarded Ms. Maximenko 24 months of reasonable notice. This decision considered her age, lengthy tenure, senior managerial role, the specialized nature of the shipping industry, and her limited Canadian work experience. The court also acknowledged her job search efforts, noting they were reasonable given her responsibility to care for her ill mother.
Bonus Calculation:
The court addressed the issue of annual bonuses during the notice period. Historically, Ms. Maximenko’s average annual bonus was $27,725. However, in 2023, no bonuses were paid to any employees. Zim argued for a 47% reduction in the bonus calculation, assuming no bonuses would be paid in 2024. The court rejected this assumption, noting that 2023 was the only year without bonuses since their inception. In the absence of evidence to the contrary, the judge found it more likely than not that bonuses would resume in 2024. Therefore, the court applied a 23.5% reduction to the average bonus amount to account for the lack of a 2023 bonus, resulting in an award of $42,420 for the bonus component over the 24-month notice period.
Significance
This case underscores the importance of considering an employee’s age, tenure, and personal circumstances when determining reasonable notice periods. It also highlights the court’s approach to bonus calculations during notice periods, emphasizing the need for employers to provide concrete evidence when arguing for reductions based on anticipated future performance.
*Always seek legal advice. The above is for information purposes only.
Stephen Dugandzic received his Juris Doctor degree from the University of Alberta in 2013 and is Calgary-based. He previously practised with Bennett Jones LLP and Taylor Janis LLP before founding YYC Employment Law Group in 2018.