Courtroom Victory: $456,908.82 Awarded for Wrongful Dismissal Against Artisan Cell Labs Inc.
Overview
Represented by Marc W. Kitay, Dr. Nicholas Timmins successfully won a wrongful dismissal claim against Artisan Cell Labs Inc. (ACL) and Artisan Development Labs, Inc. (ADL). The Ontario Superior Court of Justice ruled in his favour, awarding Timmins $456,908.82 in damages for common law notice, plus an additional $27,900 in costs.
The decision arose after the court found that the defendants failed to honour Timmins’ employment contract, repudiating the agreement by offering an insufficient severance package contingent on signing a broad release. This case highlights the importance of employer compliance with severance obligations and the risks of leveraging releases in exchange for owed entitlements.
Background
Dr. Nicholas Timmins was employed by ADL starting November 11, 2019, initially as Vice-President, Cell Technologies, and Entrepreneur in Residence. Over the years, he was promoted to Executive Vice-President and later Chief Development Officer, overseeing the Canadian operations, which included the formation of ACL as a subsidiary.
Timmins’ employment contract stipulated that in the event of termination without cause, he would be entitled to either three months’ pay or his minimum entitlements under Ontario’s Employment Standards Act, 2000 (ESA), whichever was greater.
On March 3, 2023, Timmins was dismissed without cause. However, the defendants offered 3 months’ severance, conditional on Timmins signing a full and final release, which he refused.
Case Details
Timmins’ Position
Timmins argued that:
- The termination clause in his employment contract was void for violating the ESA.
- The employer’s failure to pay his contractual severance, and conditioning payment on signing a release, amounted to repudiation of the employment contract.
- He was entitled to common law reasonable notice, which should be assessed at nine months based on his senior position, salary, and difficulty in finding comparable employment.
- ACL and ADL were jointly liable under the common employer doctrine.
- Punitive damages should be awarded based on ACL and ADL’s behaviour.
Defendants’ Position
The defendants initially defended the claim but withdrew their defense 19 days before trial, leaving the matter uncontested.
Results
Justice Callaghan ruled in favour of Timmins, determining that:
- Repudiation of Contract: By failing to provide the full contractual severance, the employer demonstrated an intention not to be bound by the agreement, entitling Timmins to common law notice.
- Common Law Notice Period: Given Timmins’ high salary, senior role, and limited employment opportunities in the specialized gene therapy industry, the court set the reasonable notice period at nine months.
- Damages Awarded: Timmins was awarded:
- $356,836 in salary for nine months
- $14,273 in RRSP contributions
- $35,684 for health and dental benefits
- $59,376 for his lost bonus
- $803 in phone reimbursement
- Minus one week of severance already paid ($10,064), totaling $456,908.82
- Common Employer Doctrine: Both ACL and ADL were deemed jointly liable as they operated as a single enterprise, exercised control over Timmins, and issued his termination letter under ACL’s name.
- Costs: Timmins was awarded $27,900 in costs, bringing the total award to $484,808.82, plus interest.
- Pre-Judgement Interest: Timmins was awarded $33,898.88, bringing the final awarded amount to $518,707.70
- Punitive Damages: The court declined to award punitive damages, finding that the substantial increase in the severance award was already a sufficient deterrent.
Conclusion
This case reinforces the principle that employers cannot withhold contractual severance or entitled termination pay under the ESA, to coerce employees into signing a release. It also highlights how courts may void termination clauses and award higher damages when employers attempt to leverage severance payments unfairly.
Advice for Employees
If you have been wrongfully dismissed or denied proper severance, consult an employment lawyer immediately. You may be entitled to significantly more than your employer initially offers. Contact us today for a consultation online or by phone at (416) 640-2667.