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Employment - New Contract

. Giacomodonato v. PearTree Securities Inc.

In Giacomodonato v. PearTree Securities Inc. (Ont CA, 2024) the Ontario Court of Appeal dismissed an appeal against a finding that the employer and employee entered into a second contract, here where the employee sought a different damage calculation in a successful wrongful dismissal action:
[2] Mr. Donato is a successful investment banker particularly experienced in the mining sector. He was recruited by PearTree to serve as President and co-head of banking in early 2016. The trial judge found that the parties entered a binding employment contract in April 2016. They subsequently negotiated and agreed to a second employment contract in July 2016. PearTree terminated Mr. Donato’s employment without cause in January 2018.

[3] Mr. Donato contends that the trial judge erred by calculating the wrongful dismissal damages owed to him based on the terms in the second contract rather than the first contract. To succeed on this ground of appeal, he would have to persuade us that the trial judge made a series of errors of law and mixed law and fact in finding that the second contract was valid, binding, and enforceable. He has not done so.

[4] The trial judge did not err in finding that there was fresh consideration for the second contract. He correctly recognized that employers do not have the right to alter a contract unilaterally unless something “new and of benefit” (beyond continued employment) flows to the employee in exchange for their agreement to the amended terms: Techform Products Ltd. v. Wolda, (2001), 2001 CanLII 8604 (ON CA), 56 O.R. (3d) 1 (C.A.), at para. 24, leave to appeal refused [2001] S.C.C.A. No. 603; Holland v. Hostopia Inc., 2015 ONCA 762, 392 D.L.R. (4th) 650, at paras. 51-55; Hobbs v. TDI Canada Ltd. (2004), 2004 CanLII 44783 (ON CA), 246 D.L.R. (4th) 43 (Ont. C.A.), at para. 32, citing Francis v. Canadian Imperial Bank of Commerce (1994), 1994 CanLII 1578 (ON CA), 21 O.R. (3d) 75 (C.A.). As the trial judge also correctly observed, however, courts are concerned with the existence, rather than the adequacy, of consideration: Loranger v. Haines (1921), 1921 CanLII 520 (ON CA), 50 O.L.R. 268 (C.A.); Stott v. Merit Investment Corp. (1988), 1988 CanLII 192 (ON CA), 63 O.R. (2d) 545 (C.A.), citing Ronald Elwyn Lister Ltd. v. Dunlop Canada Ltd., 1982 CanLII 19 (SCC), [1982] 1 S.C.R. 726.

[5] The trial judge found that there was fresh consideration for Mr. Donato’s agreement to the second contract: a $40,000 payment by PearTree to Mr. Donato to cover his costs of severing his contract with his previous employer, and an entitlement to two weeks additional paid vacation time. We are not persuaded that the trial judge erred in finding that the $40,000 payment formed part of the negotiations for the second contract. Although the trial judge mistakenly stated that PearTree made the payment in 2016 as opposed to 2017, his reasoning was premised primarily on the fact that the parties referenced this payment in discussing the second contract. In any event, the trial judge found that the additional vacation entitlement by itself constituted fresh and non de minimis consideration.

[6] Mr. Donato cites no authority for his contention that the trial judge was required to do a comparative analysis of the overall advantages and disadvantages of the first and second contract in assessing whether there was fresh consideration for the latter. We also reject his suggestion that the trial judge disregarded the power imbalance between the parties. The trial judge recognized that consideration is particularly important in the employment context due to the inequality of bargaining power between the parties and the vulnerability of an employee who depends on the remuneration they receive: Machtinger v. HOJ Industries Ltd., 1992 CanLII 102 (SCC), [1992] 1 S.C.R. 986, at pp. 1002-1003; Hobbs, at para. 42. He found that the power imbalance was mitigated in the circumstances of this case for various reasons, including Mr. Donato’s access to information about PearTree’s operations; his experience in negotiating contracts; and his representation by counsel through the negotiation of the terms of the second contract, which lasted over a month.

[7] Our conclusion that the judge did not err on the consideration issue is sufficient to dispose of Mr. Donato’s main argument on appeal.


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Last modified: 04-06-24
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