Severance entitlement of a pregnant employee

Does pregnancy entitle a laid off employee to a greater severance payment?

Brian Johnston
Question: I know terminating employees just prior to or during a maternity/parental leave is not possible but what about an employee who is part of a scheduled downsizing who lets us know she is three months’ pregnant? Her common-law based severance payment would only be about four months — not long enough to get her maternity leave. But she would have difficulty finding another job when she is pregnant. Does that increase the severance obligation?

Answer: Yes, the severance obligation will likely be increased.

A court considers many factors, including the employee’s age, type of work, education, and length of service to determine how difficult it will be for the employee to find similar employment. Reasonable notice is designed to give the dismissed employee an opportunity to find other employment.

It is clear from recent case law that pregnancy is akin to the factors outlined in the Bardal decision which determine an employee’s notice entitlement. The Ontario Superior Court of Justice in Ivens v. Automodular Assemblies Inc. recognized it would be more difficult for a pregnant employee to find another job, and accordingly pregnancy should be taken into account when determining reasonable notice.

In Harris v. Yorkville Sound Ltd., the Ontario Superior Court of Justice awarded an eight-year employee a total of 14 months’ notice after she was dismissed without cause. The judge increased the notice period by two months because the woman would have a more difficult time finding replacement employment, and a further two months with Wallace damages. While two of the three managers involved in the decision to dismiss were not aware the employee was pregnant, the manager who initiated the dismissal did and intentionally withheld the information from them. Merely terminating the pregnant employee without just cause did not trigger Wallace damages but the fact the pregnancy was intentionally concealed from two of the decision-makers did.

While the notice period for a pregnant employee may be longer, there is no absolute obligation on the employer to provide employment or notice until the time the former employee commences maternity leave. So, in your case, the four months may have to be increased, but an employer should not be responsible for paying notice up to the time the employee starts her maternity leave.

For more information see:

Ivens v. Automodular Assemblies Inc. 2002 CarswellOnt 2093 (Ont. Div. Ct.).

Harris v. Yorkville Sound Ltd., 2005 CarswellOnt 7266 (Ont. S.C.J.).

Brian Johnston is a partner with Stewart McKelvey Stirling Scales in Halifax. He can be reached at (902) 420-3374 or [email protected]

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