Employment & Labour

Judgment opens reasonable notice debate for fired workers

By Tony Poland, AdvocateDaily.com Associate Editor

A judgment dealing with reasonable notice for long-serving workers has takeaways for employers and employees, says Toronto employment lawyer Ellen Low.

The judgment illustrates that the long-held belief that common law reasonable notice for terminating an employee with many years on the job may not necessarily be limited to 24 months, says Low, principal of Ellen Low Employment Law.

“The bar is being pushed up and up, and I think you’re going to continue to see plaintiff’s counsel pushing that 24-month bar,” she tells AdvocateDaily.com.

In the case, the Superior Court of Justice found the 62-year-old man was terminated without cause in October 2015 from his role as senior vice-president of an insurance company.

The man, who had been with the company for 37 years, told court he had planned to work until he was 65 and sought 30 months’ notice, bringing him to what would traditionally be considered the retirement age.

Finding in the man’s favour, Justice Donald J. Gordon considered all of the Bardal factors —­ age, length of service, character of employment, and availability of alternate employment — ruling that termination without cause is “tantamount to a forced retirement.”

“He should have been allowed to retire on his own terms,” Gordon writes. “With no comparable employment opportunities, in particular, I would have felt this case warranted a minimum 36-month notice period.”

Low says the judgment appeared to be a softening of the “informal cap that we’ve been operating under in Ontario, that 24 months is the maximum amount that you can get” for wrongful termination.

“All of a sudden we’re now looking at the chance that perhaps there will be longer notice periods, that this is showing an upward trend with respect to termination notices,” she says.

However, the Ontario Court of Appeal overturned the decision last month, stating “There were no exceptional circumstances that warranted a longer notice period.” Instead, the court ruled the man was entitled to 24-months’ severance pay.

Low says she found it puzzling that someone who is 62 and had worked for the same organization for 37 years would not be considered exceptional.

“If that isn’t extraordinary then what on earth is?” she wonders.

Low compared the ruling to a 2015 judgment that awarded a husband and wife 26 months’ termination notice after they were fired from their jobs where they had spent their entire careers. The man was 63 when he was fired after working for the company for 32 years, while the woman was 61 and had been employed there for 25 years.

“I can’t reconcile these two cases in my mind,” she says.

However, Low says even though the 30-month award for the former vice-president was trimmed to 24 on appeal, “There appears to be a lengthening of notice periods for older employers who have dedicated their lives to one organization.”

“The Court of Appeal is saying they are open to there being exceptional circumstances where you could get in excess of 24 months,” she says. “At this point, it’s up to plaintiff’s counsel to get creative and persuasive about what’s exceptional.”

Low notes that with the end of mandatory retirement and people working later in life, she wouldn’t be surprised to see lengthier termination notice periods.

With that in mind, Low suggests workers need to consult a lawyer when faced with a termination notice and shouldn’t assume the status quo is good enough when it comes to negotiating a settlement.

“The key takeaway is if they are entitled to a common law notice period, they shouldn’t necessarily feel limited to 24 months. There are at least some arguments that even if there is an informal cap, the Court of Appeal has confirmed it’s going to be a case-by-case assessment,” she says.

“With not a lot of case law about what exceptional circumstances means, it will depend on the plaintiff’s counsel to put forward some arguments that their client fits into that category.”

As for employers, Low says the issue illustrates the need for “an enforceable well-drafted termination provision in an enforceable employment contract.”

“In light of what might be growing and longer periods of reasonable notice, it’s increasingly important to have a contract that limits your employee in that respect,” she says. “Find an enforceable contract of employment that ousts a common law determination.”

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