Court puts brakes on notice periods (Legal view)

Awards creeping up for short-term employers
By Jeffrey R. Smith
|Canadian HR Reporter|Last Updated: 07/13/2009

While upholding a five-month notice period award for a Vancouver salesperson who was fired after nine months of service, the British Columbia Court of Appeal is trying to slow a recent trend in which short-term employees in non-management positions are awarded disproportionately large notice periods in wrongful dismissal cases.

The court addressed the issue in the appeal of five months’ notice awarded to Jennifer Saalfeld, 37. She was hired by Vancouver-based anti-theft software manufacturer Absolute Software on Oct. 16, 2006, and began work on Nov. 13. Her new position was as a territory manager who would pursue sales to the United States government.

Saalfeld left a sales position with another software company to take the job because she saw an opportunity for higher earnings and career growth. She shared a sales target for the territory with a U.S.-based executive but she didn’t have any managerial duties.

On July 24, 2007, Absolute, unhappy with Saalfeld’s performance, fired her without cause. Since she had only been with the company for nine months, it paid her one week’s salary in lieu of notice and all salary and benefits earned up to that point. It also refunded her contributions to the employee share-ownership plan.

The trial court ruled Saalfeld was entitled to five months’ notice despite her short tenure at Absolute because of her extensive and specialized expertise. Though she didn’t have managerial responsibilities, her position “was a responsible and relatively senior one” that warranted special consideration, said the court. It also took into account the fact it took Saalfeld nine months to find another job.

Absolute appealed the decision, arguing five months’ notice was unreasonable and disproportionate for a non-managerial employee with such short service time with the company. Saalfeld’s counsel argued it had become standard in British Columbia case law — and was becoming standard in other provinces as well — to award notice periods of five to six months when an employee had been employed for less than three years and Saalfeld’s position was still significant enough to warrant that much notice.

Disproportionate notice periods

The B.C. Court of Appeal upheld the five months’ notice because of the length of time it took Saalfeld to find alternative employment, which demonstrated the lack of availability of a comparable job. Without that factor, the notice period was not appropriate for such a short period of service for an employee with Saalfeld’s characteristics, cautioned the court.

“While B.C. precedents are consistent that proportionately longer notice periods are appropriate for employees dismissed in the first three years of their employment, I see little support for the proposition that five to six months is the norm in short-service cases for employees in their 30s or early 40s whose function is significant for their employer, but not one of senior management,” said the court.

Several B.C. cases similar to this one have involved no inducement, bad faith or a particularly difficult job market and the employee was relatively young and didn’t have managerial responsibilities, said the court, and two to three months was more appropriate for an employee with a tenure in the nine-month range.

For more information see:

Saalfeld v. Absolute Software Corporation, 2009 BCCA 18 (B.C. C.A.).

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a sister publication to Canadian HR Reporter. For more information, visit employmentlawtoday.com.

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