reasonable notice of termination
While we often help employees who did not receive reasonable notice of termination from their employer, it is often forgotten that employees also owe a similar duty to provide notice to the employer before resigning. This common law duty was the subject of the recent case of Consbec Inc. v Walker. In this case, the BC Court of Appeal reaffirmed the existence of the duty owed by employees to the employer.
In recent years, there have been many decisions on the enforceability and interpretation of termination clauses in employment contracts—which employers and their legal counsel read with both interest and apprehension. The Nova Scotia Supreme Court has now weighed in on the debate.
In its recent decision in Keenan v. Canac Kitchens, the Court of Appeal for Ontario confirmed that dependent contractors are entitled to reasonable notice of employment termination. The required notice period can extend to years, and such as in this case, amount to 26 months.
Bonus plans in employment contracts are a great way to motivate, reward and retain employees. Many of these bonus plans have built–in conditions that must be met before these bonuses are paid out. For example, an employee must be actively employed at the time the bonus is paid. Increasingly, the courts are being asked to determine whether these conditions have to be met and whether a bonus is owing. A recent decision by the Ontario Court of Appeal will come as a surprise to many of you.
In the recent decision of Gagnon & Associates Inc. the Court reminds us that both employers and employees have the obligation to provide reasonable notice of intention to terminate the employment relationship.
I have written several times about cases which significantly depart from the so-called one month per year of service rule. There continues to be a seemingly never-ending stream of cases which confirm the perils of assuming that an employer’s liability for reasonable notice of termination will be capped at one month per year of employment.
A brave new world? – Probably not but employers sometimes have to deal with 26 months’ notice and “dependant contractors”
The Ontario Court of Appeal has further shattered the “24 month maximum” myth. In Keenan v. Canac Kitchens Ltd., the Court of Appeal upheld a Trial Judge’s finding that two long service workers were “dependent contractors” and therefore entitled to 26 months’ reasonable notice on termination.
Can’t afford to keep them, can’t afford to fire them: Poor finances do not reduce termination obligations
Employee salaries and benefits can be some of the greatest costs borne by a business. As a result, when a company faces financial hardship, they will often terminate positions to reduce their costs. However, many employers may not realize that the obligation to provide reasonable notice of termination could negate any short-term cost savings they hoped to realize.
The impact of the employer’s financial condition at the time of termination on the notice period has been the subject of some debate. In 1983, the Ontario Court of Appeal held, in Bohemier v. Storwal International Inc., that the financial circumstances of the employer are a factor that can be considered in the assessment of the notice period. Some courts have explicitly rejected the notion, however…
When advising a wrongfully terminated employee as to her legal rights and obligations, I always point out that a wrongful dismissal claim is not like winning the lottery. While employers are obligated to provide reasonable notice of termination or payment in lieu of such notice, terminated employees must make “reasonable efforts” to find new employment. As is often the case, the devil is in the details. What must a dismissed employee do to meet her obligation to mitigate? What have courts determined to be reasonable steps? What conduct has been held to be unreasonable? From whose perspective will reasonableness be judged–the employers or the employees?
One of the questions at the forefront of many employers’ minds when they are considering terminating an employee without cause is how much it is going to cost. Unless there is a written employment contract with an express termination clause, an employer’s obligation is to provide reasonable notice of termination. Since there is no set formula for determining the appropriate length of the reasonable notice period, employers (or their legal counsel) must estimate what they think the notice period could be, having regard to the employee’s age, length of service, character of employment, the availability of similar employment, and the employee’s skills and training. Often, employers and their legal counsel will use a rough rule of thumb of one month notice per year of service (although the courts have denied that such a rule of thumb exists).
The three most viewed articles in this week HRinfodesk newsletter deals with assessing a probationary employee, dismissing an employee based on a serious misconduct and the upcoming workplace mental health standard…