After 1 working notice, can there be a second or a third?

Further extensions risk finding that employee was not provided with adequate notice of final day of employment

After 1 working notice, can there be a second or a third?
Geoffrey Lowe

Business is slow, and you are confronted with the always difficult decision to let some people go. After discussing it with your team of human resources and employment law experts, you decide that the most cost-effective approach would be to provide the affected employees with working notice instead of pay in lieu of notice.

You have to pay this amount out anyway, right? Why not get something in return for it? You review each employee’s employment agreement, and determine how much notice each employee is entitled to. 

On Monday morning, you meet individually with each employee and advise that their employment is being terminated, to be effective in varying numbers of weeks from today’s date, and that they will be expected to work at their normal roles throughout this period of time.

Because you worked with your team of experts beforehand, you know that the amount of notice covers each employee’s entitlements at common law and under the Employment Standards Act, 2000 (ESA). Where necessary, you make arrangements to pay out an employee’s entitlements to severance pay under the ESA, because as a savvy employer, you know that severance pay cannot be provided via working notice.

However, a few weeks into the working notice period, something unexpected happens: a big order comes in, which will require all hands on deck for a while longer. Your company is not saved, and the dismissals will still need to happen. However, you’d like to keep the dismissed employees onboard for a longer period of working notice.

You provided working notice once, so what’s wrong with doing it a second time, or even a third? As it happens, there may be several problems with this course of action. 

ESA regulations

Under the ESA, an employer must provide unequivocal notice that an employee’s employment is coming to an end and when this end will occur. The common law does not include as strict of a rule; however, the courts’ review of similar situations has confirmed that the rule in the ESA applies to interpretation of the common law as well: an employee must know when their employment will end.

Both the ESA and the common law permit working notice instead of pay in lieu of notice. An employee who refuses to accept working notice risks a court finding that they failed in their duty to mitigate their losses. At the same time, an employee does not simply have to accept the period of working notice as the extent of their entitlements. An employee who believes the period of working notice is below their entitlement to reasonable notice may work the period of notice and then bring a claim for the rest of their entitlements.  

The ESA permits that after notice is given, the employer may extend the period of working notice once for a period of up to 13 weeks. The Court of Appeal for Ontario has confirmed that an extension of this nature is a one-time thing only: an employer may not extend the employee’s working notice indefinitely by providing a succession of additional 13-week periods. Where the employer provides anything beyond this 13-week period, it must be given with a fresh notice of termination. This fresh notice of termination will then change the date of the dismissal.

This will be the case even if the employee accepts a further extension of the working notice period and the employer provides the employee with consideration for its acceptance; the employer will remain in breach of the ESA. Above all else, an employer must provide the employee with certainty as to when employment will cease.

An employer that provides multiple extensions of working notice risks a court finding that the employee did not have certainty of the date of the end of their employment. Where this has happened, the court has reviewed the extensions provided to the employee, and determined that the final one provided is the notice of termination.

Fresh notice of termination

This will be deemed to provide fresh notice of termination. This fresh notice of termination restarts the clock on any period of working notice.

This means that any working notice provided prior to the final and fresh notice of termination does not count for purposes of the law - which includes common law notice. This could mean that an employer’s obligation to an employee on dismissal could include months of reasonable notice which the employer had ascribed to having been covered by the working notice period.

That could lead to unexpected costs and/or liability as a result of the dismissal, negating all benefits from the careful work calculating an employee’s notice entitlement and setting up working notice.  

Takeaways

Providing an employee with working notice instead of pay in lieu of notice remains a viable option in some circumstances; it permits the employer to obtain something in exchange for what it is obliged to pay anyway. However, before providing working notice, an employer must keep in mind that the period provided is finite and may only be extended once.

Any further extension risks a finding that the employee was not provided with adequate notice of the final day of employment for purposes of the ESA. This, in turn would negate the benefit of any working notice already provided - meaning the employer cannot offset the employee’s entitlements on dismissal in this amount.

The takeaway is to be cautious when giving working notice - and be sure of your decision before you proceed. If you need to extend the period of working notice, you will only be able to do it one time before you start to create unnecessary risk and liability.    

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