Executive Summary: Key Legal and Evidentiary Issues

• Whether Robert Brunette was an employee of Guycan Ltd. or a dependent contractor turned on whose business it was, even though he was paid through his personal company, 360 Property Management Inc.
   
• Resignation versus constructive dismissal depended on whether his July 16, 2020 text giving two weeks notice was a clear and unequivocal resignation.
   
• Two undefined contract terms, "gross hard cost" and "standard pricing model," had to be interpreted to determine how commissions and incentive bonuses were calculated.
   
• Guycan's internal Quote Calculator spreadsheet was a central part of the factual matrix used to interpret the Employment Agreement.
   
• Credibility findings shaped the outcome, with the court finding Brunette evasive and accepting Deonarain's evidence on contract formation and the events of summer 2020.
   
• Statutory entitlements, including public holiday pay and vacation pay, were owed once employee status was established, subject to the Limitations Act, 2002.
   

Facts of the case

Guycan Ltd. is a roofing company serving mainly the commercial and industrial flat-roof market. Randy Deonarain founded it in 1975 and runs it with his son, Jason Deonarain. In December 2017, Guycan hired Robert Paul David Brunette as an account executive whose main job was to find and secure roofing contracts. The parties signed an Employment Agreement on December 11, 2017, providing a base salary of $865.00 per week plus commissions and incentive bonuses. At Brunette's request, his pay went to his personal service company, 360 Property Management Inc. (a co-plaintiff), which gave him tax benefits, including the ability to write off expenses. No statutory deductions were taken, and 360 paid WSIB premiums for him. On August 30, 2018, Guycan signed a letter at his request describing 360 as a "consultant" paid $40,000 per year; Brunette agreed he needed the letter to prove his income in family law proceedings, although Guycan in fact paid 360 considerably more.

Like other sales representatives, Brunette was laid off in March 2020 when the COVID-19 pandemic hit Ontario. Because he had not been receiving employment income, he had difficulty obtaining the federal emergency relief benefit, and when he returned in June 2020, Guycan began paying him directly with source deductions. After an earlier attempt to resign in October 2019, which he abandoned once Guycan agreed he would not have to split commissions, Brunette texted Jason Deonarain on July 16, 2020, giving two weeks notice. He turned down a new sales opportunity on July 20, 2020, and Guycan stopped paying him on July 26, 2020. Negotiations over a revised employment agreement followed and ended on August 12, 2020, when Brunette wrote that Guycan's refusal of his proposed changes was the "main reason Guycan is not the place for me." Deonarain replied the next day that Guycan would gladly accept him back. Brunette sued for wrongful dismissal and/or breach of contract later in 2020, Guycan counterclaimed, and the matter was tried before Schabas J. in May and June 2026.

Policy and legislative provisions at issue

The commissions provision defined New Sales Revenue as roofing contracts secured by the employee within the fiscal year, on business he directly opened or received as a lead from the Sales Manager, and stated: "5% Commission will be calculated from the Gross hard cost of the project." For incentive bonuses, the agreement provided: "The contractor will receive 50% of all revenue generated on sales marked up from the standard pricing model (all markups must be approved in writing)." Both sides agreed at trial that these terms were ambiguous, since neither "gross hard cost" nor "standard pricing model" was defined. Deonarain had inserted the word "contractor" in some places after Brunette asked to be paid through 360, acknowledging that he "didn't change every word." Brunette also argued that the agreement's termination clause was unenforceable because it sought to avoid the mandatory provisions of the Employment Standards Act, 2000 (ESA). Public holiday pay was both provided in the agreement and required by the ESA, while the Limitations Act, 2002, together with its pandemic-related suspension, limited how far back that claim could reach.

Reasoning and analysis

Applying 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., Belton v. Liberty Insurance Co. of Canada, and Braiden v. La-Z-Boy Canada Limited, Schabas J. found that Brunette was an employee from December 2017 until the summer of 2020. Receiving income through a personal company was not determinative. He earned a regular base salary, was trained and supervised by Guycan employees, worked full-time, used a laptop, cellphone, and tools supplied by Guycan, and had no discretion over pricing or suppliers. Risk of loss on sales was assumed only by Guycan, which led the court to conclude that it was Guycan's business.

On the second issue, the court held that Brunette clearly and unequivocally resigned on July 16, 2020, relying on Kieran v. Ingram Micro Inc. and related authorities requiring an objective assessment of the totality of the circumstances. His refusal of new work on July 20 confirmed the resignation, and his August 12 email made clear that he walked away once he rejected Guycan's offer. Guycan never said or did anything amounting to termination or constructive dismissal; it wanted him to stay, and Brunette admitted he could have continued under either the original agreement or the new one Guycan proposed. Having resigned, he was not entitled to pay in lieu of reasonable notice, so the court did not need to address the notice period, mitigation, aggravated and punitive damages, or the ESA challenge to the termination clause. Although Brunette argued his employment ended on August 12, 2020, the court fixed the end date at July 30, 2020, the close of his notice period. Nothing showed he did work for Guycan after that date, and his July 29 email announcing time off for safety training was a unilateral message that Guycan did not answer and that did not retract his resignation.

Brunette's expert calculated $521,816.00 before taxes in unpaid commissions and bonuses based on Guycan's actual costs and actual profits, and Brunette also sought 4% vacation pay on that sum and pre-judgment interest of over $100,000. Credibility weighed heavily on this claim. Although both principal witnesses were challenging, the court found Brunette evasive and rejected as not credible his claim that pre-employment discussions were only "high level." Deonarain, who was admonished and impeached on some issues, was nonetheless found credible on contract formation, and the court concluded that the two would have reviewed the Quote Calculator before the agreement was signed and that Brunette fully understood how his commissions and bonuses were calculated. That spreadsheet totalled estimated costs as "Hard Cost," added a 25% markup, calculated a commission usually set at 5% of hard cost, and then added an "overage" premium, half of which went to Brunette. Drawing on Sattva Capital Corp. v. Creston Moly Corp. and the commercial reasonableness principle in Resolute FP Canada Inc. v. Ontario (Attorney General), the court held that the 5% commission was to be calculated on the estimated hard costs in the Quote Calculator and the incentive bonus on the overage shown there. A claim to 50% of actual profits was not commercially reasonable for a salesperson who took no risk. Post-contract conduct did not need to be considered, though the court observed that for approximately two years Brunette invoiced on the Quote Calculator basis and never asserted entitlement to the roughly $250,000 per year he now claimed.

Ruling and overall outcome

Judgment was granted in favour of Brunette, although the court rejected his interpretation of the commission and bonus provisions. Guycan owes $3,460.00 in public holiday pay, calculated at $173.00 per day from March 18, 2018 through July 30, 2020, and $692.00 for an additional four days' base pay through July 30, 2020. Relying on Brunette's expert report, the court also awarded $12,688.09 for overage underpaid on 12 projects, along with $49,607.66 in commissions and $26,339.56 as his 50% overage share on seven projects he had not invoiced when he left. Vacation pay at 4% on all earnings, including amounts already paid, was left for the parties to calculate, as was any adjustment for deductions Guycan may owe the Canada Revenue Agency. Guycan's counterclaim, which was not seriously pressed, was found to have no merit. The reasons state no overall total, so an exact final amount cannot be determined, and both the precise damages and costs remain to be settled by agreement or further submissions.