Employment & Labour

Employer’s financial state irrelevant to employee notice period

A recent Ontario Court of Appeal decision serves as reminder to lawyers representing employers that any attempt to bring financial difficulties into arguments relating to a dismissed employee's notice period will fall flat, Toronto lawyer Michael Wright tells Lawyers Weekly.

The appeal court’s ruling in Michela v. St. Thomas of Villanova Catholic School [2015] ONCA 801, reversed the Superior Court judgment that found that although three teachers were wrongfully dismissed by their employer, a private, Catholic school, the school could pay them six months' salary in lieu of notice instead of 12 because it claimed it was facing financial difficulties.

On appeal, however, the court confirmed that an employer’s financial state should play no role in determining how much notice is given to employees who are being dismissed.

Acting for the appellants, Wright, of Wright Henry LLP, argued that the motion judge erred in law by relying on the respondent’s alleged financial difficulties to reduce the notice period.

Wright and lawyer Stephen Moreau also contended that the motion judge erred by speculating that the appellants could find similar work within six months, and that enrolment issues constituted a financial problem permitting a reduction in the notice period, Lawyers Weekly reports.

The Appeal Court ruled only on the first argument.

“What’s important about this case in my view,” Wright says in the article, “is it finally and conclusively determines that an employer’s financial circumstances are entirely irrelevant when it comes to deciding notice for a dismissed employee. There’s one goal, which is to protect an individual’s income as they look for employment.”

Wright says the decision does not break new ground, “but it certainly clarifies what was starting to get murky.”

For employers attempting to argue financial difficulties, Wright says, “those arguments are without merit because a court will not accept them. There’s really no reason to factor that into a negotiation."

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