Complaint withdrawn: Issue estoppel does not apply

Employee entitled to proceed with wrongful dismissal action despite finding under ESA

When an employee believes he has been wrongfully terminated, the employee has two options: bring a court action against the former employer seeking damages for wrongful dismissal; or, alternatively, make a complaint pursuant to provincial employment standards legislation to recover termination pay.

Prior court decisions have held that an employee cannot seek recovery both under employment standards legislation and through a court action. Where the employee has received judgment pursuant to employment standards legislation, the employee is estopped from bringing or continuing a civil action.

This is known as issue estoppel. In further support of this, employment standards legislation often provides that an employee cannot commence a civil action for wrongful dismissal if a complaint for termination pay has been filed in accordance with the legislation.

However there are instances where issue estoppel does not apply, such as the following case.

Kianre Boniface Eouanzoui was terminated from his employment with the Lycée Français de Toronto. In response to his termination, he filed a complaint under the Ontario Employment Standards Act for termination and vacation pay. However within two weeks of filing his complaint, he withdrew his claim for termination pay in writing. The ESA provides that an employee is entitled to pursue a claim for wrongful dismissal if the employee withdraws his complaint under the ESA within two weeks from the date it was filed.

Notwithstanding the fact that Mr. Eouanzoui had withdrawn aspects of his complaint, the employment hearing officer proceeded to determine the issue of termination pay and found in his favour. When he received a letter to that effect in August 2000 he contacted a representative to express concern but was informed that “it was too late.”

He was not informed of any rights of review or appeal. His employer was informed of the hearing officer’s decision and advised that it could apply for a review of the decision with the 45-day appeal period if it was not satisfied with the result. The employer provided a cheque to Mr. Eouanzoui in accordance with the order, which Mr. Eouanzoui cashed.

Mr. Eouanzoui commenced a civil action against Lycée in February 2001. After receiving notice of the claim, the Lycée brought a motion to dismiss the claim on the basis of issue estoppel. Mr. Eouanzoui argued that the order of the employment hearing officer with respect to termination pay was made without jurisdiction as the complaint had been withdrawn.

The Court accepted that the complaint with respect to termination pay was withdrawn within two weeks of being filed. As such, the employment hearing officer proceeded without jurisdiction with respect to the termination pay issue, once the complaint was withdrawn. As the order was made without jurisdiction, it is void ab initio.

The Court then proceeded to address the argument of issue estoppel, in the event that she was wrong on the issue of jurisdiction. The Court held that issue estoppel did not apply. Mr. Eouanzoui had complied with the ESA by withdrawing his complaint for termination pay within two weeks of filing it.

Mr. Eouanzoui did not pursue his right to review within 45 days because he was informed that it was too late. The letter he received only referred to an employer’s rights for a review of the decision. Mr. Eouanzoui did not have legal counsel when he received the employment hearing officer’s decision. The decision was the result of a summary procedure. The summary procedure did not deal with contractual issues or questions of appropriate notice periods.

For the reasons above, the Court held that the action for wrongful dismissal against the Lycée could proceed.

For more information:

Eouanzoui v. Lycée Français de Toronto, Ontario Superior Court of Justice, Docket No. 01-CV-205746, Sept. 26/01.

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