Investment banker awarded damages in wrongful dismissal suit

Investment banker awarded damages in wrongful dismissal suit
Scotia Capital banker terminated after grieving bonus

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An Ontario Superior Court judge has awarded an investment banker $920,000 in damages in a wrongful dismissal suit.

According to the judgment in the case, Kenneth Mathieson, sued Scotia Capital Inc. after he was dismissed from the firm in May 2007, following 30 years on the job. Scotia did not dismiss him for cause, and they offered him an 18 month severance package, in lieu of notice.

Mathieson rejected the severance, and sued. The firm continued to pay his base salary and most of his benefits for 24 months following his termination, it noted.

The judgment says that while the termination took place in May 2007, the trouble began a few months earlier after Mathieson received a poor performance evaluation and a bonus of just $360,000. From 2000 to 2005, his bonus had fluctuated from a low of approximately $500,000 to a high of approximately $1,100,000, it said.

“Mathieson vigorously grieved his bonus, complaining on a number of occasions to his superiors at Scotia Capital. When these efforts failed, he grieved to senior officials at the Bank of Nova Scotia, the parent corporation that owns Scotia Capital. In addition, he expressed broader concerns about his assignment to the Forest Products Industry group where he felt there were limited opportunities. He raised these broader issues at the same time as his specific concern about his reduced 2006 bonus. It was towards the end of this lengthy process of grievance, about both the 2006 bonus and about his desire for responsibilities outside of Forest Products, that Scotia eventually dismissed Mathieson in May, 2007,” the decision explains.

The case raises three main issues, the court said: whether the 2006 bonus was awarded unfairly and unreasonably and in breach of his employment contract; whether the 18-month notice period offered by Scotia was sufficient; and, whether the firm's conduct over the period preceding the termination gives rise to other damages.

The court ruled that the claim that the bonus was unfair or unreasonable was not proven; but that the appropriate notice period should be considered 24 months. While he was paid his base salary during the notice period, and received $210,000 as a pro rated share of his 2007 bonus, the court found that he is also entitled to some amount for year end bonuses during the 24 month notice period. It set that amount at $460,000 per year, concluding that he is entitled to an additional $920,000 (plus pre-judgment interest), beyond the salary and benefits already paid by Scotia during the period.

It didn't find grounds for damages for the period between the award of the disputed bonus and the dismissal.