Assessing how much notice of termination a particular employee is entitled to is a challenge most employers would like to avoid. As those of you who deal with the issue on a regular basis know, employment standards legislation sets out the minimum amount of notice, but it will almost never be sufficient unless the employee has an enforceable contract that limits them to the statutory amounts. In most cases, the common law will require that an employer provide “reasonable notice”, and though there are many myths, there are no easy ways to determine what is reasonable.
For decades, the leading case with respect to assessing notice of dismissal has been Bardal v. Globe and Mail Ltd., in which Chief Justice McRuer set out the factors that a court should take into account in determining what constitutes reasonable notice of dismissal. He stated as follows:
There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.”
Since then, our courts have made it clear that the factors enumerated in Bardal, being
- the character of the employment,
- the length of service of the employee,
- the age of the employee, and
- the availability of similar employment, having regard to the experience, training and qualifications of the employee,
are not exhaustive. Dozens of other factors have been considered; perhaps the most common is inducement, which will serve to extend the notice period when an employee is lured away from secure employment.
Our courts have also consistently rejected any form of simple calculation, as they all tend to focus solely on the employee’s length of service. Statistical evidence confirms that myths such as the “rule of thumb” of one month of notice for every year of service are just that: myths. Notice periods have been significantly impacted by age and position; considering only an employee’s length of service is inconsistent with the case law.
Historically, there has been an underlying assumption that individuals in “lower level” positions should have an easier time finding new employment, as there would be more positions available, and their notice periods have been shorter as a result. This has been called into question recently by cases such as Di Tomaso v. Crown Metal Packaging Canada LP, in which the Ontario Court of Appeal held
there is recent jurisprudence suggesting that, if anything, (position/character of employment) is today a factor of declining relative importance.”
With respect to age, employees approaching retirement age previously tended to receive shorter notice periods, since the underlying assumption was that they would not be working much longer anyway. However, people are working until later in life than they used to, and the reality is that it is difficult for a 60 or 70 year old to find a new job.
The end of mandatory retirement has introduced an interesting complication. In the past, an employer that found an older worker was slowing down could allow them to retire with dignity, knowing the employee would leave when they turned 65. Now, they do not know if or when the employee will retire. In many cases, employees will not retire since they know that doing so will mean they don`t get a severance package. As a result, the situation can devolve into a ‘game of chicken’, with each party waiting for the other to blink first. For employers, they may be faced with an unproductive employee that they are scared to coach, discipline or dismiss as they believe that any action will result in a human rights claim.
Even if the employer decides to dismiss an older employee, they are faced with the challenge of determining how much notice or severance to provide. As indicated above, the notice periods for older workers used to be shorter. However, in Filiatrault v. Tri-County Welding Supplies Ltd., an Ontario court considered a wrongful dismissal claim brought by two employees in their 80s. In reaching its decision, the court made the following comments:
There are few, if any, cases where the courts have awarded notice periods of more than 24 months. The higher notice periods have normally been awarded to persons of senior age, usually persons in their 60s and less often in their 70s, not normally to persons in their 80s. The durations of employment that have attracted higher notice periods have rarely if at all been as great as 40 years. This will likely be an increasing trend with the statutory end to retirement at age 65, a point I will return to later. There is no suggestion here with the current reality of employees working to more senior ages that the upper limit on notice periods should be infinite. However, the fact of the matter is courts will have to increasingly grapple with adjusting what a reasonable notice period is in this new reality.”
In that case, the plaintiffs had agreed to limit their claim to 18 months of notice, which is what they received. In another recent case, Kotecha v. Affinia, the plaintiff was a 70 year old labourer with 20 years of service. A notice period of 22 months was found to be reasonable.
It seems clear that the law with respect to the calculation of reasonable notice is evolving. One of the core factors—position/character of employment—may no longer be particularly relevant. And another—age—may no longer have the impact it once did on “older” employees. Employers and courts will increasingly have to deal with employees in their 60s, 70s and 80s that have been dismissed and are seeking severance pay. Given the trend toward working later in life, and the likelihood that those individuals will not be hired into new positions, they are likely to receive lengthy notice periods, particularly when their length of service is commensurate with their age. The unofficial maximum of 24 months of notice seems likely to increase as well.
Of course, the unpredictability of common law “reasonable notice” can be avoided altogether if the parties use an employment agreement to clarify exactly what their rights and obligations will be in the event of dismissal. I often work with clients to do so.
Stuart E. Rudner
Rudner MacDonald LLP
Canadian Employment Law