In Ferguson v Yorkwest Plumbing Supply Inc, 2025 ONSC 5866, the Ontario Superior Court of Justice entered a default judgment for the employee plaintiff, awarding $170,415 in damages. This sum represented six months’ pay in lieu of reasonable notice (including salary and estimated commissions) as well as the unpaid commissions the plaintiff had been owed at termination. The court arrived at this figure by carefully evaluating the uncontroverted facts against established legal principles: it applied the Bardal test to set a notably high notice period for a short-service employee, and it ensured all components of the plaintiff’s compensation were accounted for in the damage award. The judge supported the outcome by citing relevant precedents and rules – from the duties of good faith in the manner of dismissal to the rules enabling a defence to be struck for non-compliance – thereby underlining the law’s expectation of fair play both in terminating employees and in litigating such disputes. In justifying the result, the court stressed how the facts and law intersected: given the plaintiff’s situation and the defendant’s failure to refute any claims, full damages were warranted.
Ultimately, the reasoning in this case highlights two key points. First, an employee wrongfully dismissed (without proven cause) should receive damages that truly reflect their lost position – here, a substantial notice period and all associated income were awarded, illustrating the court’s willingness to go to the high end of the range when circumstances demand. Second, the court’s handling of the case underscores that employers who engage in procedural misconduct do so at their peril. Yorkwest’s delay and obstruction not only led to its defence being struck, but also undermined any ability to contest the claim. The judge’s ruling, firmly grounded in legal doctrine and the factual record, was presented as the fair and necessary consequence: Ferguson was made whole for her wrongful dismissal, and the employer’s tactics were decisively flushed away by the judgment.
Background and Procedural History
- Employment and Termination: The plaintiff, Ferguson, was employed by Yorkwest Plumbing Supply Inc. from October 2015 until March 2017. The employer dismissed her with only one week’s notice, alleging cause (poor performance) as the reason for termination.
- Claim Filed: In August 2018, Ferguson sued for wrongful dismissal, seeking damages in lieu of reasonable notice and unpaid sales commissions. Essentially, she claimed the employer breached the employment contract by failing to provide adequate notice and by withholding commission payments she had earned.
- Delay Tactics and Defence Struck: The litigation was marked by the employer’s persistent delay tactics. Over several months, the employer’s counsel ignored or evaded multiple attempts to schedule discovery examinations. Even after a judge ordered that discoveries be completed by Feb. 28, 2022 and warned the employer to “start cooperating”, the employer continued to obstruct – for example, insisting on an improper order of examinations without legal basis. In response, the plaintiff obtained a court order striking out the employer’s statement of defence on August 16, 2022. The court found the defendant’s conduct “egregious,” noting a “months’ long” pattern of non-cooperation and delay that amounted to an abuse of process. As a sanction under Ontario’s Rules of Civil Procedure, the defendant’s defence was struck, leaving the plaintiff’s allegations effectively unchallenged.
- Appeal Dismissed: The employer appealed the striking of its defence, but the Divisional Court dismissed the appeal in June 2023. The appellate court held that the procedural missteps and delays fully justified the harsh remedy. It also approved of the lower court’s reference to the principle of good faith in litigation (drawing on Wallace v United Grain Growers Ltd) emphasizing that employers must conduct litigation fairly, especially in wrongful dismissal cases. With the defence struck and the appeal lost, the matter proceeded to an undefended default judgment motion on the merits.
Legal Principles Considered
- Reasonable Notice and Bardal Factors: In a wrongful dismissal, an employee is entitled to reasonable notice of termination or damages in lieu thereof. To determine the appropriate notice period at common law, courts apply the Bardal factors – considering the employee’s age, length of service, character of employment (position/duties), and the availability of similar employment in light of the employee’s experience and qualifications. There is no fixed formula; for instance, the oft-cited “one month per year of service” rule of thumb is not determinative, especially for short-service or older employees. The court must exercise judgment to decide a notice period that is fair in the specific circumstances.
- Burden of Proof for Cause: If an employer alleges termination for cause, the employer bears the burden of proving just cause. In this case, because the employer’s defence was struck and it led no evidence, the cause allegation was effectively abandoned. Thus, the dismissal was treated as without cause, meaning Ferguson was entitled to full notice damages.
- Damages for Commissions: Commissions and other incentive pay are recoverable as part of wrongful dismissal damages. The principle is that the employee should be made whole for all compensation they would have earned during the reasonable notice period. Even if a formal commission plan was absent or contested, courts will look at the employment agreement and past practice to ensure earned commissions or those that would have been earned in the notice period are paid. In Ferguson’s case, her claim for unpaid commissions included amounts earned before termination and those she would have earned had proper notice been given.
- Default Judgment Procedure: With the defence struck, the plaintiff proceeded by way of default judgment. In such cases, well-pleaded facts in the statement of claim are deemed admitted, but the plaintiff still must prove the amount of damages if not a fixed sum. Ferguson provided evidence (e.g. regarding her salary, commission history, and job search) to substantiate the damages claimed, since the court had to assess an appropriate notice period and quantify her losses.
Court’s Analysis and Reasoning
- Evaluation of Facts: Since the employer presented no evidence to counter Ferguson’s claims (having forfeited its defence), the court accepted the plaintiff’s factual assertions and evidence as unchallenged. The judge reviewed Ferguson’s employment history and termination circumstances: she had relatively short service (about 1.5 years) and was let go under a cloud of alleged poor performance, which could hinder her re-employment prospects. The court noted that the employer gave only one week notice (far below common law standards), and no cause was proven to justify this scant notice. It was therefore clear that the employer had breached the contract by failing to provide reasonable notice. The court also took into account Ferguson’s compensation structure – notably, that a significant portion of her income was commission-based – when evaluating her losses. All of the plaintiff’s evidence went essentially unanswered, a direct consequence of the defence having been struck for abuse of process. This context underscored that the plaintiff was not to be penalized for the defendant’s litigation misconduct; if anything, any doubt in the evidence would not be afforded to the recalcitrant employer.
- Reasonable Notice Period: Applying the Bardal factors to Ferguson’s situation, the court determined that she was entitled to a substantial notice period despite her short tenure. Key factors influenced this assessment. First, Ferguson’s relatively brief service did not strictly limit her notice entitlement – the court reiterated that there is no one-size rule tying notice to years of service. More important were factors such as her age and the nature of her role, which affected how long it would likely take her to find comparable employment. Although the precise details were not publicly reported, the judge found that Ferguson’s circumstances placed her at a disadvantage in the job market (for example, if she was in a specialized sales role or was more advanced in age, her re-employment would be more difficult). Consequently, the court opted for a notice duration at the higher end of the reasonable range. In the judge’s words, awarding six months’ notice was appropriate – a length the court characterized as the “high end” for someone with her short service, justified because the plaintiff had particular factors making re-employment challenging. This generous notice period reflects the court’s view that short-service employees, especially those in niche positions or later in their careers, may need much longer to secure a new position than a simple prorated formula would suggest. The decision thus aligns with precedent acknowledging that even a few years of service can merit many months of notice in the right circumstances.
- Unpaid Commissions and Other Damages: In addition to salary in lieu of notice, the court addressed Ferguson’s claim for commissions. It accepted that she had earned commissions prior to termination that remained unpaid, and that she would have earned further commissions had she continued working through the six-month notice period. The judge likely relied on the principle that an employee’s compensation during the notice period includes not just base salary but also the average commissions or bonuses the employee would have received. Accordingly, the default judgment award included the value of those lost commissions. The reasoning here is rooted in the goal of making the employee whole: Ferguson was entitled to the income she would have obtained if the contract had been honoured (i.e. if she had been given proper working notice or pay in lieu). The court calculated her commission damages based on her past commission earnings and the evidence of her sales pipeline, in the absence of any contrary evidence from the employer. There is no indication the court reduced the notice damages for mitigation; since the employer led no evidence of Ferguson’s post-termination earnings, and Ferguson’s own evidence did not suggest she had mitigated earlier than six months, the full six-month period was awarded.
- Role of Employer’s Conduct: Although the primary focus of the decision was to quantify wrongful dismissal damages, the court’s reasoning did not ignore the employer’s egregious conduct. The judge was aware that the defendant’s bad-faith tactics had necessitated the default proceeding. This context reinforced the court’s resolve to give the plaintiff the benefit of any doubt. The earlier decisions had already condemned the employer’s behaviour and cited the importance of good faith in dismissal litigation. In the final judgment, while the court did not need to impose further sanctions (beyond costs), it implicitly justified the ruling by reference to fundamental fairness: an employer who subverts the process cannot then complain about the outcome. Thus, the judge had no hesitation in granting judgment for the full measure of Ferguson’s losses. The message was clear – the “delay tactics and abuse of process” deployed by the company had ultimately backfired, resulting in a significant monetary judgment in the employee’s favour.
*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 and Evolution Legal in 2026.