The recent case of Olivares v. Canac Kitchens, 2012 ONSC 284 provides a useful reminder of what to include in a damages calculation for a wrongful dismissal case. In this case, the Plaintiff had worked for Canac Kitchens for 24 years when his employment was terminated along with many others as a result of the company closing its manufacturing operations in Canada. The Plaintiff was earning an annual salary of $93,000 including pay for overtime and insurance benefits. One issue on this motion for summary judgment was how to properly calculate damages with respect to overtime pay and insurance benefits.
Justice Lederman confirmed that overtime pay is to be included in the calculation of the Plaintiff’s damages:
 Overtime pay had become an integral part of the anticipated income of the terminated employee and should be considered as compensable damages. If overtime has been paid in years immediately preceding the termination, it is appropriate to take that overtime into account when assessing damages for wrongful dismissal (see Guitierriz v. Canac Kitchens Ltd. 2009 CanLII 593 (ON SC), 2009 CanLII 593 (Ont. S.C.J.) at paragraphs 12-14;Munoz v. Canac Kitchens, 2008 CanLII 63151 (ON SC), 2008 CanLII 63151 (Ont. S.C.J.) at page 23).
In addition to any regular overtime that makes up an employee’s compensation, a damage award will also include the value of lost benefits over the span of the reasonable notice period.
Justice Lederman held that the calculation of damages in a wrongful dismissal action is based on the “global compensation” that an employee was making. This is an important reminder for both employees and employers, and their legal counsel, when calculating damages for the purposes of a legal action or for negotiating a settlement.