The law with respect to notice periods at common law seems pretty simple: the maximum is 24 months in the absence of “exceptional circumstances.”
exceptional (adjective)
not like most others of the same type; unusual:
• This is an exceptional contract, guaranteeing no layoffs.
Exceptional also means unusually good:
• Davis has done an exceptional job of reporting.
So what are exceptional circumstances? Well, since “exceptional” is the opposite of “usual,” let’s start with the usual factors:
- The employee’s age;
- The length of service;
- The position/character of employment; and
- The availability of similar employment.
Those are the factors that we are to consider in every analysis of reasonable notice, and the notice period is to be adjusted up to 24 months depending on those factors.
Throughout my career, we have occasionally seen cases where notice periods in excess of 24 months were awarded. In Dawe v The Equitable Life Insurance Company of Canada, the Ontario Court of Appeal made an effort to delineate when the “unofficial cap” of 24 months should be ignored. In that case, the plaintiff was 62 years old and had worked for the defendant for 37 years, ending their service in a senior position. At trial, he was awarded 30 months, but the Court of Appeal rolled that back to 24 months. In so doing, the Court of Appeal held that there would have to be “exceptional circumstances” to justify an award exceeding 24 months. In that case, the plaintiff’s age and impressive tenure were already accounted for by the usual factors.
That would all seem straightforward, and yet the Ontario Court of Appeal subsequently approved of a 26-month notice period for a 58-year-old employee with 40 years of service and no apparent “exceptional” circumstances. That occurred in Currie v Nylene Canada Inc., a 2022 decision. The only arguably exceptional circumstances were the fact that the plaintiff began working for the employee after grade 11, never completed high school, and worked in a specialized field with rudimentary computer skills.
Even more recently, we have the decision of Ramsay J. of the Superior Court of Justice of Ontario in Milwid v. IBM Canada Inc. The plaintiff in that case worked for the defendant for 38 years and was 62 years old at the time of dismissal, which occurred during the pandemic. The court found that the plaintiff’s job had been technical and specialized to the defendant. As Ramsay J. noted:
There is no absolute upper limit on what constitutes reasonable notice…However, exceptional circumstances must exist to support a notice period in excess of 24 months. … In my view, such circumstances exist in this case.
I find that there are exceptional circumstances in this case which warrants a notice period in excess of twenty-four months. The plaintiff’s age (62), his length of service with the same employer (38 years), the managerial position he held at the time of termination, his compensation and benefit package (which includes the equity awards) in an uncertain economy, the technical/skilled nature of his skills geared towards the defendant’s business, all support an award of twenty-six months.
What does it mean?
Although Dawe suggested a need for other circumstances, separate and apart from the usual factors, before a notice period in excess of 24 months should be awarded, Currie and Milwid suggest that is not the case. It would seem that the “cap” of 24 months continues to exist, but in circumstances where someone has an extremely lengthy service period (i.e., over 35 years), has effectively spent all or almost all of their career with one employer, and is near retirement age when they are dismissed, notice periods exceeding 24 months can be awarded.
That being said, those cases are few and far between. As a mediator, I often see claims for 26, 28 or 30 months (for some reason, we Employment Lawyers tend to eschew odd numbers) in cases where there is no credible basis to approach the 24-month cap, let alone exceed it. While I fully understand the theory that one should start a little high and leave room to negotiate, asking for excessive amounts can make it more difficult to resolve the matter, and the reality is that if the amount of notice is the only real issue, the matter should be resolved without a trial.
- Twenty-four months’ notice in the absence of exceptional circumstances - March 3, 2023
- Time theft: Employee ordered to repay employer - February 3, 2023
- Court provides clarity on fixed term contracts - January 6, 2023
Leave a Reply