Below are the answers to common initial questions many clients have when they first contact LALANDE EMPLOYMENT LAWYERS. We hope that the information below address many initial concerns you may have, but if you don’t find the answers here, please contact us with questions specific to your case. The consultation is free and confidential.
In every non-unionized employment relationship, the employer has an implied common law obligation to give the employee reasonable notice of its intention to terminate the employment relationship, unless there is just cause for termination. If the employer fails to give the employee reasonable notice of termination, the employee can bring a wrongful dismissal action for breach of that implied term.
Your employer is obligated to provide you reasonable notice of your termination – or in the alternative – payment in lieu of such notice. If your employer has not provided you with reasonable notice OR payment in lieu of notice, or your employer has provided innapropriate notice then you may in fact have a claim for wrongful dismissal.
No, independent contractors are not entitled to common law reasonable notice of termination.
The purpose of providing reasonable notice is to allow the employee a period of time in which to secure alternative employment
Yes, unlike statutory minimum termination pay, you can certainly contract out of reasonable notice. As a substitute for common law reasonable notice, you and your employer might have agreed at the outset to any amount of notice or pay in lieu of notice that is equal to or above the statutory minimum.
The starting point for determining the reasonable notice period is set out in an old seminal case case called Bardal v. Globe & Mail Ltd., from 1960. Bardal tells us that reasonable notice is decided with reference to the certain key factors (the “Bardal factors”):
Bardal lists the most important factors to be considered in assessing the common law reasonable notice period. These factors are weighed and balanced by the courts in their analysis. No single Bardal factor is to be given disproportionate weight.
It’s important to understand that Bardal does not provide an exhaustive list of the factors to be considered. Courts have added other factors into the analysis. However, additional factors are not given the same weight as the Bardal factors, except (arguably) for the factor of inducement.
The reasonable notice period has been generally capped at a rough upper limit of 24 months of notice, with the court awarding above 24 months if exceptional circumstances are demonstrated.
For example, in the case of Dawe v. Equitable Life Insurance Company, 2018 CarswellOnt 8419 (Ont. S.C.J.) a 62-year-old senior vice president with 37 years of service was awarded 30 months of notice. The court would have awarded 36 months on the basis that no comparable employment was available however only 30 months of notice was claimed.
This approach has been rejected by the appeal courts as it overemphasizes the length of service factor and undermines the flexibility of the Bardal analysis. The rule of thumb approach to reasonable notice also has little correlation to reality. Short term employees may well receive reasonable notice in excess of a month per year of service (sometimes up to four or five months per year of service) and longer-term employees (over 20 years) tend to receive less than a month per year of service.
In considering the character of employment, the courts are more concerned with the responsibilities, skills and character of the work performed rather than the minutia of the employee’s job duties or the employee’s job title.
In the past many courts assumed that senior level employees with a high degree of management functions or professional skills would have a harder time finding alternative employment and, as a result awarded greater reasonable notice for more senior level positions than for lower level or non-skilled positions. However, in the last 20 years Appeal Courts have considered the character of employment factor as one of “declining” importance or significance in the reasonable notice assessment. The character of employment factor is relevant to the reasonable notice analysis, but it is not to be given disproportionate weight (See Keays v. Honda, 2008)
Long term employees are typically entitled to longer notice periods than short term employees of the same age, with the same skills and responsibilities.
“Barring specific skills, it is generally known that persons over 45 have more difficulty finding work than others. They do not have the flexibility of the young, a disadvantage often accentuated by the fact that the latter are frequently more recently trained in the more modern skills”.
The court may increase the amount of reasonable notice where there is limited similar employment available in the job market, having regard to the experience, training and qualifications of the employee. On the other hand, where similar employment is widely available, less notice may be awarded.
This is conceptually different than the time taken to find a new job. Reasonable notice is determined by the circumstances existing at the time of termination and not by the time that it takes to find alternative employment (which goes to the duty to mitigate and not to the length of reasonable notice). See Holland v. Hostopia.Com Inc., 2015 CarswellOnt 16985 (Ont. C.A.)
Yes, it is. The Supreme Court of Canada has expressly recognized that inducement is a factor to be considered in the reasonable notice analysis. Have a read of our blog post about inducement about how the inducement factor comes into play when en employee has left a relatively secure job.
These are extra-contractual damages. Terminating an employee in a manner that is unfair or is in bad faith by being untruthful, misleading or unduly insensitive may result in additional damages being awarded to the terminated employee. Read more here.
It depends if there has been a merger or a take-over/asset purchase. Normally, if there is a share purchase, the ownership of the company changes but not the legal identity of the employer. There is no termination of employment as the employment relationship flows through to the purchaser and the length of service is not interrupted. If there is an asset purchase, the legal identity of the employer changes. The sale may terminate the employee’s employment with the vendor. The employment relationship does not automatically transfer to the purchaser. There is no common law right of assignment.
If the purchaser of a business does not offer employment to existing employees, the vendor remains liable for reasonable notice damages based upon the employee’s length of service with the vendor. See Addison v. M. Leob Ltd., 1986 CarswellOnt 836 (Ont. C.A.).
If the purchaser hires the vendor’s employees, a new employment contract is created. Unless there is an express contractual term to the contrary, the court will imply a term into the new employment contract giving the employee credit for his past service with the vendor and the prior years of service will be considered in the determination of the common law reasonable notice period. See Sorel v. Tomenson Saunders Whitehead Ltd., 1987 CarswellBC 175 (B.C. C.A.)
In every jurisdiction, minimum standards legislation provides for the continuation of the employee’s length of service where the employee has continued employment with the purchaser after the sale or transfer of a business, particularly when it comes to issues of vacation entitlements and termination notice requirements. Any contract purporting to waive service credit for minimum standard purposes will be void. See Kerzner v. American Iron & Metal Inc., 2018 CarswellOnt 20637 (Ont. C.A.)
The employer may choose to provide the employee with working notice of the termination of his employment. In this case, the termination letter would be given to the employee in advance of the actual termination date and expressly provide a final termination date that reflects the end of the applicable notice period.
Not typically. A release should not be used where the employee is given only working notice of his termination. If the employer offers additional payments over and above any minimum standards obligations (for example, the amount of working notice will not cover the entire reasonable notice period), it may require the employee to execute a release in exchange for the additional payments over minimum standards requirements.
In many cases, the employer notifies the employee that the employment relationship is terminated effective immediately and offers the employee pay in lieu of notice, either in the form of a lump-sum package or as a salary continuance package. Lump-sum packages are typically structured so that the employee receives a fixed sum, with no reduction for mitigation income earned during the notice period.
Severance pay is a payment that is made by the employer upon termination of an employee, in addition to any individual notice of termination and group termination notice. Where notice of termination is meant to give an employee an opportunity to prepare for an upcoming termination and take measures to seek alternative employment, severance pay is meant to compensate the employee for the investment of her long service with the employer’s business.
Severance pay cannot be given as working notice and must be given as additional pay upon termination. The employer is required to pay the employee her total severance pay amount even where it provides greater than the minimum required amount of working termination notice. (Mattiassi v. Hathro Management Partnership.)
In Ontario, a termination clause that gives the employer the option to provide severancepay as working notice, in part or for the entire severance pay entitlement, will likely be unenforceable for contracting out of the Employment Standards Act, 2000, S.O. 2000, c. 41. (Wood v. Fred Deeley Imports Ltd.)
Yes, Any severance pay paid to the employee is deductible from her common law reasonable notice entitlement. See Stevens v. Globe & Mail, 1996 CarswellOnt 1590 (Ont. C.A.) and Brake v. PJ-M2R Restaurant Inc., 2017 CarswellOnt 7619 (Ont. C.A.).
No, amounts paid as continuing salary will not qualify as a retiring allowance pursuant to Section 248(1) of the Income Tax Act and therefore cannot be transferred into an RSP or RRSP for the purpose of the deferral specified in Section 60(j.1).
We typically offer a free phone conversation to see if we can help you with your particular situation. If we determine that we can be of assistance, we will invite you for an in-office consultation. At this point the in-office consultation will be invoiced to you to pay when we meet, or in the alternative, at the conclusion of your case, depending on your particular scenario.
Constructive dismissal occurs when the employer acts in a way that demonstrates that it no longer wishes to be bound to the employment relationship or the employer breaches a fundamental term of the employment contract. Even if the employee resigns, in a constructive dismissal scenario, the employer will be deemed to have dismissed the employee without just cause, and the employee may be entitled to bring a wrongful dismissal action for reasonable notice damages as a consequence
The onus is on the employer to show cause for dismissal, “which must be misconduct of the most serious kind”. It has also been stated that there “is a substantial onus on the defendant to prove just cause
The employer has the onus of proving cause for summary dismissal on the balance of probabilities. The degree of proof, however, has been higher where the case involved an allegation of dishonest conduct or a breach of trust. While a civil court did not adopt so high a degree as a criminal court, it did require a degree of probability which was commensurate with the occasion.
. . . absent a flagrant dereliction of duty, it must be shown that something was done clearly inconsistent with the proper discharge of the employee’s duties that reasonably indicates a risk of injury to the employer’s interest through continued employment.
You should have been advised that whatever misconduct you’re accused of is a matter of serious significance and its continuation could place your employment in jeopardy. Unless a single act of misconduct is extremely serious toward immediate termination, which is quite rare, yes, your employer has a duty to warn you that your misconduct could result in dismissal for cause should further misconduct occur.
The failure to warn an employee is considered to be condonation, accepting the improper behaviour (see Henry v. Foxco Ltd., 2004 CarswellNB 127 (N.B. C.A.) at paragraph 123
Generally, the misconduct of an employee prior to his or her employment cannot be utilized as the basis for summary discharge. The only exception to this rule is when an employee, in an attempt to obtain a job, misrepresents his or her background, skills or qualifications at the hiring stage. If such occurs, the company has a right to terminate the employee without notice or severance pay.
Yes. It is well-established that a dismissed employee must mitigate or minimize any damages arising out of the wrongful dismissal by making reasonable efforts to secure alternate, comparable employment. This comes from an old 1975 case called Michaels v. Red Deer College. However, it is equally clear that the employer bears the burden of proving the employee’s failure to mitigate; and that this burden is not light (Michaels) The mitigation inquiry is fact-driven and considers all the relevant circumstances. The question is whether you, as the employee has made reasonable efforts in the circumstances to find comparable employment.
You are required to make reasonable efforts to find alternate, comparable employment. “Comparable employment” does not mean “any employment”, but comprehends employment comparable to Mr. Ariss’ employment with his former employer in status, hours and remuneration. This comes a recent Ontario Court of Appeal case called Carter v. 1657593 Ontario Inc.
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