- Firms do not have ‘sole discretion’ to terminate employment contracts - July 26, 2024
- Proposals to update the Workers Act offer minor victories - December 6, 2023
- No right to lay off employees without compensation, court affirms - July 19, 2023
When an employer terminates an employee’s employment, they usually owe the employee prior “reasonable notice” of termination. The notice periods required of employers are generally capped at 24 months. However, courts have granted exceptions where there are exceptional circumstances. But the question then arises: What are those circumstances? Various rulings demonstrate there is no uniform answer coming from the courts on this issue.
In March, the Ontario Court of Appeal upheld a lower court decision granting an employee 26 months of pay because the employer was held to owe 26 months of notice. In Currie v. Nylene Canada Inc., the appeal court ruled,“the trial judge firmly anchored his reasonable notice analysis in a series of case where the court had found that ‘exceptional circumstances should exist to support a notice period that exceeds 24 months.’”
Those circumstances included the fact that the woman had been with the company for 40 years. When she was terminated at the age of 58, her computer proficiency was very limited and her skills were not easily transferable: the court concluded that “given Ms. Currie’s age, limited education and skills set, the termination ‘was equivalent to a forced retirement.’”
Inconsistencies from the bench are evident
I agree that this employee was entitled to a longer notice period considering those factors. But the court has not been consistent in this position. Let’s look at some other judgments in Ontario, in chronological order, that all deal with people who were terminated after a lengthy tenure. The inconsistencies coming from the bench should be evident.
- In the 2000 Ontario Supreme Court case of Baranowski v. Binks Manufacturing Co., a man who was laid off at age 52 with close to 29 years of experience was given 30 months of salary in lieu of notice. “Since the plaintiff held the reasonable expectation his employment was secure until his retirement, this is an ‘exceptional’ case, one which warrants a notice period in excess of 24 months,” the judge wrote.
- In the 2006 case of Lowndes v. Summit Ford Sales Ltd, the Ontario Court of Appeal noted that the determination of what constitutes reasonable notice is “case-specific.” While there is “no absolute upper limit or ‘cap’ on what constitutes reasonable notice, generally only exceptional circumstances will support a base notice period in excess of 24 months.” When he was fired, Grant Henry Lowndes was 59 years old and had worked for the same firm for approximately 28 years. The trial judge had given him a 30-month notice period, which the appeal court knocked down to 24 months.
- Many workers will emerge from the lockdown in a better position
- Workers still have rights when facing layoffs or pay cuts due to COVID-19
- $2.5M class-action settlement gives private school teachers their due
- In 2009 in Cardenas v Kohler Canada Co. an Ontario Superior Court found that a reasonable notice period of 26 months was appropriate for a 43-year-old shift supervisor with 27.5 years of service.
- In 2016, the Ontario Court of Appeal ruled in Keenan v. Canac Kitchens Ltd. that a husband and wife – ages 63 and 61 with 32 and 25 years of experience respectively who worked almost exclusively as contractors for a firm – were entitled to 26 months of notice. As the judge noted: “For over a generation, they were Canac’s public face to the outside world. Over a period of approximately thirty years – the entirety of their working lives – the Keenans’ income had come from Canac and they relied on that income to support themselves and their family … these circumstances justify an award in excess of 24 months.”
- In Dawe v. The Equitable Life Insurance Company of Canada in 2019, a senior vice-president was dismissed at the age of 62 with 37 years of employment and offered pay in lieu equivalent to 24 months’ notice. He sued for wrongful dismissal and the motion judge held that 30 months was an appropriate notice period. The company argued that was excessive and the appeal court agreed, knocking it back down to two years. “There were no exceptional circumstances that warranted a longer notice period,” the judgment states, even though he worked only three years less than Currie.
I’ve addressed “exceptional circumstances” in relation to notice periods before. As I wrote in 2019, people are “jumping to the wrong conclusion” if they think the courts will not award above the 24-month cap despite the court saying that such a cap is not exceeded unless there are exceptional circumstances. There still remains cases where 24 months is awarded (like Dawe) but where, on near identical factors, longer notice periods are awarded. Why was one case exceptional and the other not?
What we need from the courts now is a definitive answer about what constitutes those circumstances. A clear guideline would benefit everyone involved.
More from Cavalluzzo LLP:
