Law Times

Feb 25, 2013

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Law Times ��� February 25, 2013 Page 11 FOCUS Employers turn on counsel following $700K judgment BY MICHAEL McKIERNAN Law Times A labour lawyer who won a combined $700,000 judgment on behalf of 24 wrongfully dismissed employees says his clients could be in for a long wait to see the money after some of the defendants in the action sued their former counsel over his handling of the matter. In 2009, 34 former employees terminated from their jobs with a sportswear business sued Avon Sportswear Ltd., Shain Sportswear Ltd., Albert Sliwinski Ltd., and Faylaura Investments Inc. They also sued Albert Sliwin, the man listed with the Ministry of Government Services as the administrator of each of the companies. They claimed the companies fired them without termination or severance pay and provided insufficient notice. In addition, they maintained all five defendants should be liable for damages as they allegedly constituted a ���common employer.��� Things got complicated when all of the defendants except Faylaura Investments had their statements of defence struck. In turn, Sliwin, Albert Sliwinski, and Avon Sportswear sued their former lawyer, Bradley Teplitsky, for $1 million. Meanwhile, the plaintiffs moved for default judgment against Avon and Shain. On Nov. 5, Ontario Superior Court Justice Douglas Gray granted damages totalling $707,000 to 24 of the former workers. Michael Wright, who acted for the terminated employees, says he���s happy with the result but worries the new action against Teplitsky could bog down the proceedings. As well as enforcing the default judgment, the former employees are also continuing their action against the remaining defendants. ���The real pressing issue is my clients haven���t seen a dime yet,��� says Wright, who heads the civil litigation and class actions practice at Cavalluzzo Shilton McIntyre & Cornish LLP. ���Some of these people worked for a very extended period of time, more than 30 years in some cases. They devoted their whole working lives to this company and got absolutely nothing at the end. Now we���ve got a judgment with a decent result and they still haven���t seen a penny.��� The root of the dispute between Teplitsky and his former clients lies in Gray���s earlier decision to strike their statements of defence for failing to provide an affidavit of documents or agree to a discovery plan. Teplitsky also failed to show up at the motion to strike. On March 29, 2011, Gray refused a motion to set aside his order to strike the defences. ���I am not satisfied that the defendants��� failure to appear was through ���accident, mistake or insufficient notice.��� Indeed their non-attendance was the culmination of a pattern of conduct that is unacceptable,��� wrote Gray. According to Gray���s decision, lawyers for the plaintiffs submitted repeated written requests to Teplitsky to engage in the discovery process without success. In an affidavit filed on the motion, Teplitsky swore that the defendants had a meritorious defence, there was no employment relationship between the plaintiffs and Sliwin, and the corporate defendants had provided them proper notice about Jail may deter wage scofflaws Continued from page 10 for hours worked. When that breaks down, someone should be held responsible and this case shows that the law has teeth and, as a director, you could face that accountability.��� Karimjee says the publicity the case has drawn could also increase the chances of another prosecution involving jail. He says employees owed wages may be more likely to complain to the ministry while those whose claims are successful could also push for similar sanctions against employers who ignore orders to pay. ���I think this is part of really a much broader push by the Ministry of Labour. Most of the information from this case came from a press release from them. In the context of employment standards and work- place safety, they���re really trying to send a message about safe workplaces and compliance with the law. This fits within that broader context.��� Abraham says she has also seen an increased emphasis on enforcement from the Ministry of Labour. ���We constantly hear about employees being injured or harmed at work and they seem to be really cracking down as of late with some heavier fines,��� she says. Despite his reservations about the possibility of jail time for employment standards violators, Zeilikman concedes the case could ultimately reduce instances of unpaid wages. ���Employers will certainly think twice about it. Being threatened with civil prosecution is one thing but being threatened with deprivation of liberty is quite another,��� he says. LT the closure of the business. ���Somewhat remarkably, Mr. Teplitsky swears that ���from in or around May 2009, until the fall of 2010, there was not much activity on the file,������ wrote Gray. ���It is remarkable because, as reviewed earlier, counsel for the plaintiffs had, for over a year, made pointed demands of Mr. Teplitsky, which he had ignored. To say that there was not much activity on the file is misleading and disingenuous.��� According to his affidavit, Teplitsky said he failed to respond because, ���among other reasons, I was dealing with a mental health issue of a family member, although I am aware that this was not an excuse.��� But Gray refused to exercise his discretion to reinstate the defences. He suggested the defendants were aware of Teplitsky���s actions from the outset as part of a strategy of ���stonewalling��� the plaintiffs. ���They clearly had sufficient notice and I am not satisfied that there was any accident or mistake. Mr. Teplitsky was aware of the motions and decided not to appear. A family emergency would not have prevented him from sending an agent or telephoning counsel for the plaintiffs or the court. He did neither,��� wrote Gray. Sliwin refused to comment when reached by Law Times, but in a statement of claim dated Jan. 20, 2012, he alleged Teplitsky never informed him of the failure to deliver an affidavit of documents or the consequences that could result. ���As a result of the breach of contract or negligence by Teplitsky, Sliwin will be subject to judgments for damages in proceedings which could have been and ought to have been successfully defended. Sliwin has suffered and will continue to suffer damages as a result of the negligence or breach of contract of Teplitsky,��� the claim alleges. Teplitsky���s lawyer, Gavin Tighe, also declined to comment while the case is before the courts. But in a statement of defence dated May 18, 2012, Teplitsky denied breaching ���any duty he may have owed to��� his former clients and called the action a ���collateral attack��� on Gray���s March 2011 decision. None of the allegations against Teplitsky have been proved in court. In any case, Teplitsky says in his defence that his former clients ���would not have been successful��� in defending the wrongful dismissal actions and that they ���would have been found to be jointly liable to the plaintiffs . . . regardless of any conduct��� on his part. Teplitsky wanted the motion for default judgment adjourned and also sought leave to intervene, arguing that any order made would likely affect him. Wright opposed the move and Gray sided with him in denying the adjournment. Teplitsky then withdrew his motion to intervene. ���He wasn���t entitled to intervene because it has no direct bearing on his interest,��� says Wright. ���The result may impact what���s being sought from him in terms of other litigation he���s involved with, but that action is still essentially legally irrelevant to our action.��� In the default judgment decision, Gray approved Wright���s calculation of the damages owed to each defendant based on the socalled rule of thumb for reasonable notice of one month for every year of employment, capped at 24 months, despite stating his view that that approach is ���not a tenable one at law.��� Gray said the Court of Appeal has rejected that approach but noted he was ���nevertheless persuaded that the damages proposed for each plaintiff are reasonable and I am prepared to award them.��� LT Solutions rarely keep office hours. RubinThomlinson_LT_Feb25_13.indd 1 13-02-15 9:41 AM

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