Longer notice periods should be the norm for pandemic terminations

Employees terminated from their jobs during the COVID-19 pandemic should expect an extended notice period.

That could be the result following a recent Superior Court of Justice decision in Yee v Hudson’s Bay Company, where the judge ruled that the scarcity of employment opportunities brought on by the lockdown merited a longer notice period.

When determining an employee’s common law notice entitlements, courts traditionally look to a 1960 case, Bardal v. Globe & Mail Ltd., for what are now commonly known as the Bardal factors: age, length of service, position, and the “availability of similar employment having regard to the experience, training and qualifications of the employee.”

Hudson’s Bay offered Yee 11 months of salary and benefits. In deciding if that notice period was fair, Justice Grant R. Dow spoke to each of the Bardal factors.

“Yee is 62 years of age. While this is not ‘old,’ by more recent standards, it is within the latter stages of the usual working life career for most persons. It is a factor that favours a longer reasonable notice period.”

Bardal factors weighed

His focus then shifted to the second factor.

“Yee’s 11.65 years of service with HBC was not so long as to fall within that of ‘life-long’ employee,” the judgment reads. “However, it was not brief. I find it to be neutral to somewhat favouring a longer period of reasonable notice.”

As far as position, Dow notes, “In some of [his] previous roles with HBC, [Yee] held the title of Vice-President and was described as an ‘executive’ … this also favours awarding a longer period of reasonable notice. “

In addressing the fourth factor, “availability of similar employment,” the judgment notes that Yee’s lawyer had argued the court “should take into account the recent COVID pandemic and resulting significant increased difficulty in obtaining comparable employment.”

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To support that position, he referenced the 2016 Ontario Court of Appeal (COA) decision in Paquette v. TeraGo Networks Inc., which states “economic factors such as a downturn in the economy or in a particular industry or sector of the economy that indicate that an employee may have difficulty finding another position may justify a longer notice period.”

In considering that argument, Dow said the Paquette ruling must be weighed against the 2015 COA ruling in Holland v. Hostopia.com Inc., which states: “Notice is to be determined by the circumstances existing at the time of the termination and not by the amount of time it takes the employee to find employment.”

COVID named as a factor

That is important, since the Yee termination occurred on Aug. 28, 2019, seven months before the pandemic started.

In his ruling, Justice Dow acknowledged that “terminations which occurred before the COVID pandemic and its effect on employment opportunities should not attract the same consideration as termination after the beginning of the COVID pandemic and its negative effect on finding comparable employment.”

Returning to the Bardal decision, he then added: “The four cornerstone factors to be considered are prefaced with the statement ‘the reasonableness of the notice must be decided with reference to each particular case.’ To that end, based on consideration of the entire factual matrix as detailed above, I find 16 months to be the proper notice period.”

This is the first time the Superior Court has said that COVID is a factor when determining a fair notice period, which makes this a significant decision. Going forward, the message appears clear that a March 2020-onward termination means more notice owed because of the coronavirus.