The times – and notice periods – they are a-changin’
Older workers, staff in non-managerial roles receiving higher awards than in the past
Jul 29, 2013
By Stuart Rudner
Although Canadian courts have steadfastly insisted there are many different factors that can be considered when assessing the amount of notice of dismissal to which an employee is entitled, those of us who deal with dismissals on a regular basis focus on the “core” factors originally set out in the 1960 ruling of Bardal v. Globe and Mail Ltd.:
•character of the employment
•length of service of the servant
•age of the servant
•availability of similar employment, having regard to the experience, training and qualifications of the servant.
Of course, we don’t refer to employees as “servants” anymore. And we are also mindful that if the employee was induced to leave prior employment, that can add significantly to the amount of notice.
In recent times, however, questions regarding the application of two of the core factors have arisen. As I discussed in "Is Position or Character of Employment Still Relevant?", recent decisions, including one by the Ontario Court of Appeal, explicitly reject position as an important factor.
Historically, the underlying theory was individuals in “lower level” positions should have an easier time finding new employment as there would be more positions available, but this has been questioned. In Di Tomaso v. Crown Metal Packaging Canada LP, the Ontario Court of Appeal held "there is recent jurisprudence suggesting that, if anything, (position/character of employment) is today a factor of declining relative importance."
In addition, the age factor has become somewhat of a wildcard in light of the aging workforce and the abolition of mandatory retirement. Previously, employees approaching retirement age tended to receive shorter notice periods, since the underlying assumption was they would not be working much longer anyway. However, people are working later in life than they used to, and the reality is it is difficult for a 60 or 70 year old to find a new job. As a result, there have been several recent cases where older workers have received lengthy notice periods.
Recently in Ontario, we have seen a wrongful dismissal case in Ontario with two plaintiffs in their 80s and another involving a 70 year old labourer. In the first case, the plaintiffs were awarded 18 months’ notice (they had agreed to limit their claims to this amount), and the court made the following comments:
• “However, the fact of the matter is courts will have to increasingly grapple with adjusting what a reasonable notice period is in this new reality.”
• “I do not think there is a place in this social reality for an automatic presumption that persons should or would naturally retire on reaching senior age.”
The second case was Kotecha v. Affinia, in which a 70 year old labourer with 20 years of service received 22 months of pay in lieu of notice. As you can see, this case involved both factors discussed above — an older worker and a lower-level position. Despite those two factors, the plaintiff was awarded 22 months of notice, two less than the “unofficial cap” on notice periods of two years, which seems likely to become less relevant as well.
It is also noteworthy that the decision in Kotecha was made on a motion for summary judgment. Clearly, courts are becoming more willing to determine straightforward dismissal cases, where the only real issue is the notice period, without a full trial.
The trend definitely appears to be toward lengthier notice periods, particularly for non-managerial or executive employees that previously were often limited to 12 months or less. Older workers are also being awarded substantial notice periods, creating a difficult situation for employers that could, in the past, wait for an employee with declining performance to hit age 65 and retire with dignity. Now, employers may not only have to dismiss them, but provide a substantial severance package.
Of course, the unpredictability of common law “reasonable notice” can be avoided altogether if the parties use an employment agreement to clarify exactly what their rights and obligations will be in the event of dismissal. I often work with clients to do so.
Stuart Rudner is an HR lawyer and a founding partner of Rudner MacDonald LLP, a Toronto-based firm specializing in Canadian employment law. He provides clients with strategic advice regarding all aspects of the employment relationship, and represents them before courts, mediators and tribunals. He is author of You’re Fired: Just Cause for Dismissal in Canada, published by Carswell. He can be reached at email@example.com. You can also follow him on Twitter @CanadianHRLaw and join his Canadian HR Law Group on LinkedIn.
Stuart Rudner is a founding partner of Rudner MacDonald LLP in Toronto. Follow him on Twitter @CanadianHRLaw
. He can be reached at firstname.lastname@example.org