It is not uncommon for companies to change ownership or restructure. After a business is transferred or sold, this may affect employee rights and employer liability. It is important for both employees and employers to understand their rights and obligations if the company is transferred. In some cases, there may be issues determining whether a business was transferred and whether certain rights or liabilities apply. Before it gets to the point of transfer, it is important to consult with an employment lawyer to understand the legal consequences for both the employee and employer. 

This post will discuss employee rights and employer liability in business transfers. We will also discuss when a business is considered transferred, which may only be applicable in some cases. In particular, we will examine Stock Transportation Ltd. v. Llanos, 2024 ONSC 575, where the court found that the employee was entitled to severance as the business was not transferred to a new employer. Therefore, The former employer was liable for damages despite introducing the employee to the new employer who was taking over a work contract. This post will provide important takeaways for both employees and employers who may be involved in a business transfer. 

What happens to employee rights after a business is transferred?

After selling a business, an employee may be asked to continue working under the new employer. Under the Ontario Employment Standards Act section 9, if an employer sells a business or part of a business, and the purchaser employs one of the seller’s employees, that employee is not considered terminated or severed. In particular, the employee would not be entitled to termination damages if the business is transferred. This is because the employee would be considered to be working under the same business, and their employment would continue. 

If an employee continues working for the new employer, it is important to gain clarity on whether they are hired on an indefinite basis or a fixed-term contract. If hired indefinitely, they are entitled to more protections than with a fixed-term contract, as employers are not required to provide reasonable notice of termination for fixed-term employees. Employers are also expected to advise the employee if their role has changed to a fixed-term or temporary position after selling the business. 

What happens to employer liability in business transfers?

There are some exceptions to the rule of continuity, however. The former employer may be liable for severance or termination pay if the employee is not rehired by the purchaser for longer than 13 weeks after the earlier of the following:

1. The employee’s last day of employment with the seller; or
2. The day of the sale.

It is, therefore, important for a business seller to discuss with the purchaser what will happen to the current employees, including if the purchaser intends to hire them, as it can affect the purchaser’s liability as a former employer. 

The purchaser may also be liable for termination or severance pay if they terminate the employee later and the company rehired them as a permanent employee rather than on a fixed-term or temporary basis. 

The seller and purchaser will need to examine the potential employment liabilities arising from the transfer of a business. 

When is a business considered transferred?

Besides the sale of business assets or the business as a whole, a business is also considered sold by a former employer if all or part of the business is leased, transferred, or otherwise disposed of in another manner. 

However, it is important to note that a party can only transfer a business they own. The Employment Standards Act section 9 exceptions to employee termination pay only apply if a business is sold. It is not considered the sale of a business if a work contract from a third party is awarded to a new company that subsequently employs employees of the former employer. This was the case in the Stock Transportation case, discussed below. 

Former Employer Liable for Termination Pay Despite Agreement with New Employer to Hire Existing Employee

In the Stock Transportation case, the employer-provided bus services in Ontario. Under section 64 of the Employment Standards Act, the employer was required to pay severance pay to terminated employees within 7 days of the termination or at the employee’s next payday, whichever is later. The employer contracted with the Student Transportation Services of York Region Consortium to provide bus services for students commuting from home to school. 

The employee began working with the employer in 2010 as a bus driver. She was one of the drivers for the York Consortium routes.

This continued until 2021 when Stock Transportation’s contract with the York Consortium would expire. As a result, the employer provided the employee with a termination letter that specified that they would pay her severance pay after she was terminated, pursuant to the Employment Standards Act. 

The contract for the bus routes was awarded to a new company, Voyago. Before the contract expired, Stock Transportation entered into an agreement with Voyago to introduce drivers of those routes to Voyago so that they could extend employment offers if they met Voyago’s conditions. The agreement stated that Voyago would recognize the employee’s length of service with Stock Transportation. This agreement did not transfer any of Stock’s assets or business operations to Voyago. 

Voyago offered the employee of this action a role to continue driving the same bus routes as she had done while employed by Stock. Her original start date with Stock was honoured by Voyago. 

As a result of this agreement and subsequent offer to the employee, which she accepted, Stock did not pay her any severance pay. Stock claimed they were not required to do so under section 9 of the Employment Standards Act, as the agreement was considered a “sale,” and Stock was exempt from paying severance. 

The court found that no sale of business occurred. The contract from the York Consortium was not something that Stock could transfer or sell to Voyago. It was not under Stock’s control, and rather, the contract expired and was awarded to another company. The agreement to introduce Voyago to Stock’s employees was not a sale, as employees could not be sold. No purchase and sale agreement between Stock and Voyago would exempt Stock from paying severance to the employee, even though Voyago subsequently hired her. 

Contact Haynes Law Firm in Toronto for Advice on Employee Rights and Employer Liability After A Business is Sold 

After a business is sold, the new employer must consider whether to seek work from existing business employees. Our experienced employment law legal team at Haynes Law Firm in Toronto can assist you with issues that arise from termination. Our goal is to ensure that employees understand their rights and receive maximum compensation in termination cases. Haynes Law Firm also assists employers in avoiding liabilities that may arise from terminations that are not permitted by the legislation. We are dedicated to finding the best resolution for you.

To book a consultation, please contact us online or by phone at 416-593-2731.

Employees are typically asked to sign a release agreement by their employer when they are terminated. While it depends on the specific language of the agreement, releases generally involve an employee giving up their rights to most employment or human rights claims after their employment ends. This type of agreement allows for some certainty for employers in knowing that they will not have the risk of future employment or human rights claims from an employee. However, from the perspective of an employee, they may feel that they are required to give up their rights to certain claims in order to receive a settlement payout or simply as a result of the power dynamic in an employer-employee relationship. 

In this post, we will discuss considerations for employees if they are asked to sign a release agreement at the end of their role. We will also discuss situations where a release agreement may be invalidated, including key principles that apply when determining if a release agreement is valid. In particular, we will discuss the role of duress when an employee is asked to sign a release and how it is often difficult to prove. This post will provide important considerations for employees when they are presented with a release agreement from their employer. 

What is a release agreement?

A release agreement is prepared by the employer for the employee to sign. In this document, it will typically describe the types of claims that an employee would be giving up after they sign the agreement. For example, after signing a release, the employee may no longer be able to make a claim for wrongful dismissal or any human rights claims against the employer. 

The purpose of a release agreement is to provide certainty to an employer that they will not have to address the future claims of a terminated employee. In most cases, the employee would be provided a severance package or benefit upon termination in exchange for signing the release. In some situations, the employment contract may also specify that the employee is required to sign the release upon their termination. 

Are employees required to sign a release agreement upon termination?

There is typically a power dynamic between the employee and employer where the employee may feel pressured to sign a release document in order to receive any severance offered or specified in their contract. It can be difficult for an employee to assert their rights when terminated. 

The employee’s employment contract may specify that they must sign a release agreement upon termination so it is important to review with a lawyer before signing a release.

Generally, if the employee is being asked to sign a release, the employer needs to provide some consideration, such as payment. For instance, the employer may require the employee to sign a release agreement or letter before paying out a severance package. The release should specify any payments or other considerations that would be provided to the employee so that they will give up further legal claims against the employer regarding employment or termination. 

The release agreement or letter does not permit the employer to avoid paying the minimum standards for termination under the Employment Standards Act. The employee is not required to sign a release in order to receive their minimum compensation under the Employment Standards Act. 

Employees may be pressured to sign the release on the spot, but they may not fully understand the rights and claims they are giving up. It is important for employees to be given time to obtain legal advice before signing the release, as it may significantly change their legal position. Given this power dynamic, the courts have recognized situations where a release agreement may be invalid, which involves signing under duress. 

When would a release agreement be invalid?

A release agreement would only be invalid in narrow circumstances involving duress, coercion, or fraud. There is a high bar to find that there was duress, fraud, or coercion. The courts have noted that stress is not the same as duress. While the court recognizes that settlement agreements between a terminated employee and their former employer can involve personal and economic stress on the employee’s part, this does not necessarily invalidate the signing of a release. 

A release would only be invalidated if it was entered into under duress or it arose due to undue influence. In particular, the employee must have entered into the agreement willingly, even if there is some degree of pressure to accept the agreement. If the degree of pressure was undue or improper, then it could invalidate a release signed by the employee. In other words, even if there was pressure to sign, it may not necessarily be enough to invalidate a release agreement. 

For pressure to rise to the level of duress, the employee’s consent must be removed, and certain factors can assist the court in determining duress. In particular, the court will look at whether or not the employee objected, whether the employee, at the time of signing, did not have any other option such as legal action, whether the employee had independent legal advice, and whether the employee took steps to avoid fulfilling the agreement terms after signing. 

Key Takeaways 

At termination, an employee may be asked to sign a release that prevents them from pursuing any further employment or human rights-related claims against the employer. They are often required to sign the release in order to receive their termination package. There is a very high bar to show that a release was signed under duress and, therefore is invalid. The courts have recognized that while there is unequal bargaining power between a terminated employee and their former employer, it may not necessarily invalidate a signed release, even if there is some degree of pressure for the employee to sign, including being asked to sign on the spot without consulting with an employment lawyer first. Therefore, it is important that an employee proactively seeks legal advice on a release agreement before signing. Otherwise, an employee may give up many or all of their claims against their former employer. 

Contact Haynes Law Firm in Toronto for Advice on Termination and Release Agreements

Employees may be asked to sign a release on future claims against their employer before they can receive their termination package. Our experienced employment law legal team at Haynes Law Firm in Toronto can assist you with issues that arise from termination. For employees, our goal is to ensure that they understand their rights and receive maximum compensation in their termination package. Haynes Law Firm also assists employers in avoiding liabilities that may arise from terminations that are not permitted by the legislation. We are dedicated to finding the best resolution for you.To book a consultation, please contact us online, or by phone at 416-593-2731.

During employment, an employee may be required to handle company property, including physical and digital assets. Even if the employee played a significant role in developing the digital asset, such as a website, this may be considered company property based on the employment contract terms. Typically, an employment contract includes terms that specify that anything created as part of the job will be company property, as well as terms that describe the consequences of destroying company property. Both employees and employers must carefully consider these terms in the employment contract, as it may relate to whether a termination was justified. 

In this post, we will discuss when digital assets may be considered company property and the possible consequences of deleting these assets. In particular, we will examine how it relates to just cause dismissals and provide an overview of the test as it relates to how an employee has dealt with digital assets created by the employee but owned by the company. For instance, in the case discussed below, Park v. Costco Wholesale Canada Ltd., 2023 ONSC 1013, the court found that an employee was validly dismissed for just cause after he deleted a website he created for his employer. As a result, the employee was not entitled to damages after being terminated. 

What digital assets are considered company property?

Company property can include both physical and digital assets. This can include property created by the employee during their employment for the employer. The terms for company property are typically defined in the employment contract, so both employees and employers need to understand at the outset what falls under this category according to the contract. For example, digital assets could include websites, software source code, or company data.

Overview of Just Cause Dismissals 

It is important to consider company property, as employment contracts typically set out the consequences for destroying company property, which may include dismissals for cause. In other words, if an employee deletes any digital assets that are considered company property, this may be a factor in determining whether the employer validly terminated them and whether they would be entitled to any damages due to the termination. 

If an employee’s dishonesty resulted in a breakdown of the employment relationship, there are grounds to dismiss the employee for just cause. In other words, cause for dismissal can arise where the employee’s dishonesty violated an essential part of the employment contract, breached the inherent faith in the employment relationship, or is fundamentally inconsistent with the employee’s obligations towards their employer. An employer is justified in terminating an employee if the misconduct is serious and affects the core of the employment relationship. 

This finding depends on the facts of the case, which considers the entire context of the misconduct, including the nature and circumstances of the misconduct. In particular, the court can also consider the employee’s age, employment history, seniority, role, and responsibilities to determine if the termination was justified. Also, the court can consider the employer’s type of business, any relevant policies or practices set out, the employee’s position in the organization, and the degree of trust in the employee. 

Lastly, the court will consider whether reconciling the employment relationship is possible if the misconduct is not severe. However, suppose the misconduct is serious, resulting in a breakdown in the employment relationship. In that case, an employee may be terminated for cause and may not receive damages from their termination. 

Wilful Misconduct Includes Deleting Company Property 

In the Park case, the employee made a claim for wrongful dismissal against his employer, including 24 months of reasonable notice, lost coverage for his health benefits, damages for bad faith and human rights violations, and aggravated damages. The employee had worked for the employer for 20 years. During this time, he created a website for his employer, which he completed during work hours. The purpose of the website was to assist staff with file sharing.

The employee’s supervisor was aware of the employee’s work on the website and suggested that it be sent to management. The employee then sent a link to the website to management and stated that he was eager to share the website with his department, different regions, and international sectors of the company. The employer did not respond with any feedback on the website, and the employee went on medical leave.

A few months later, management could no longer access the website. The employee’s supervisor emailed him to provide access to the website. In the email, the supervisor also asked for ownership of the website to be transferred to management. 

Shortly after, the employee deleted the website, as he was upset and believed management was acting spitefully towards him by seeking ownership of the website. He also emailed management, stating that he had not received any feedback about the website for several months after sending it, so he believed no one was interested in using it.  

The employer restored the website, and the supervisor informed the employee. Before he received notice that the website was restored, the employee deleted it a second time, including clearing it from his computer’s recycling bin as a final deletion. He claimed that he did not know that the website was restored, and when he saw the website was up again, he thought he had not properly deleted it. Overall, the employer admitted that he deliberately deleted the website twice and made a misleading statement in his employment insurance application that his employer hacked into his account. 

Employee Terminated for Just Cause for Deleting Company Website 

Shortly after, the employee was terminated for cause, as he had deleted the website.

The employment contract included a section outlining causes for termination, which included willful damage or destruction of company property, acts of insubordination, including refusing to comply with management instructions and contemptuous behaviour or remarks to a manager. The contract also stated that all creative work, business ideas, and products an employee designs and develops as an employee or related to the employer’s business are the employer’s sole property. In this case, it was not disputed that the website was the employer’s property. 

The court found that by deleting the website not once but twice, the employee had destroyed company property, which was grounds for termination for cause, as set out in the employment contract. The court also found insubordination, as the employee used disrespectful and inflammatory language when responding to the request to give management ownership of the website. This also contributed to a finding that the employee was terminated for cause. Ultimately, the employer was not required to pay any damages for terminating the employee. 

Contact Haynes Law Firm in Toronto for Advice on Termination and Wrongful Dismissal Claims

Employers and employees should carefully consider the termination clauses set out in the employment contract and any factors that may be relevant for cause termination. Our experienced employment law legal team at Haynes Law Firm in Toronto can assist you with issues that arise from termination. For employees, our goal is to ensure that they understand their rights and receive maximum compensation in wrongful dismissal cases. Haynes Law Firm also assists employers in avoiding liabilities that may arise from terminations that are not permitted by the legislation. We are dedicated to finding the best resolution for you.

To book a consultation, please contact us online or by phone at 416-593-2731.

For many people, work plays a significant part in their lives, but an employment relationship may not last forever. For instance, an employee may move to a different city, find another role, or change careers. In some cases, the employment relationship may have ongoing issues that lead to a termination for cause. This can be an uncomfortable process but may be necessary if an employer can no longer protect their company and mitigate risk while employing an individual. It is, therefore, important to understand when a for-cause termination would be valid, as it may not be appropriate in all situations. 

This post will discuss the principles for determining whether a for cause termination was valid. This post aims to provide key takeaways for employees seeking to understand their rights in the event of a termination and employers seeking to fulfill their obligations in the event of a termination. Also, we will examine a case example, Pirani v. Canadian Imperial Bank of Commerce, 2023 ONSC 5991, in which the court found a valid termination for cause. This recent case example will help illustrate how the principles for just cause termination apply. 

What Is a For Cause Termination in Employment Law?

A termination for cause is contrasted with a termination without cause. For without cause terminations, an employee may be entitled to certain rights and benefits upon termination. For instance, they may have been laid off and receive a severance package as a result, pursuant to the employment contract. 

Employees can be terminated for cause, meaning they were terminated for a reason and are therefore not entitled to certain rights. The employment contract typically states what would occur if the employer terminated the employee for cause. For example, the employment contract may stipulate that the employee would not be entitled to the severance package set out in the contract if they were terminated for cause. 

However, this does not allow the employer to decide when a termination is for cause. The termination clause, including any portions concerning termination for cause, must meet the minimum standard in the Employment Standards Act (ESA). Under the ESA, the employee must have engaged in willful misconduct to find that there was a valid for cause termination. This is a higher standard than the “just cause” standard, the common-law standard set out in case law. If a for cause termination provision does not specify the standard, it could be interpreted to mean that it requires just cause, which does not meet the ESA’s minimum standard and could be invalid.

The employer bears the onus to prove that the for cause termination was valid. Some examples of circumstances where an employee may be terminated for cause include the following: 

1. The employee is guilty of serious misconduct; 
2. The employee has habitually neglected their duties; 
3. The employee is incompetent; 
4. The employee’s conduct is incompatible with their duties or prejudicial to the employer’s business; 
5. The employee is guilty of wilful disobedience to the employer’s orders.

The evidence provided must be clear, convincing, and cogent. Also, the employer must show that the termination was proportionate to the misconduct at issue, given the surrounding circumstances and the nature or degree of the misconduct. The court will assess whether the misconduct was sufficiently serious to result in a breakdown in the employment relationship such that a termination for cause was justified. For instance, this may include misconduct that is clearly inconsistent with the employee’s duties under the employment contract. The misconduct must have violated an essential part of the employment contract or breached the faith inherent in the employment relationship. 

These principles highly depend on the facts of the case, including the type of role involved. For instance, in the Pirani case, the court found that there was valid termination for cause after an employee failed to follow the policies set out by the employer, which were significant as she worked in the banking industry. 

Failure To Follow Banking Policies Leads to For Cause Termination

In the Pirani case, the employee was terminated from her role as Senior Financial Services Representative at a bank after eight and a half years of service. The employer claimed that she was terminated for cause, as the employee continued to breach the bank’s Code of Conduct, policies, and procedures. The employee was also provided two warnings concerning her conduct, which was described as violating the bank’s policies. After a final warning, the employee was dismissed for cause. The employer claimed that there was cause for termination as the breaches were of a serious nature and resulted in a breakdown in the employment relationship. 

The employee claimed she was wrongfully terminated and sought special damages for overtime, damages for reasonable notice of 48 months, severance under the ESA, and $300,000 for mental distress and moral damages. She also sought an additional $200,000 in punitive damages. 

The employee agreed to follow the bank’s policies and procedures in the employment contract. These policies and procedures were available to her throughout her employment. Her role involved assisting clients with their financial needs based on their situation, risk profile, intended time period, and personal factors. She was required to accurately capture and validate clients’ personal and financial information to ensure they aligned with the bank’s policies and procedures. 

In November 2010, the bank provided a warning letter to the employee outlining her failure to review overdraft reports. The letter stated that she was required to strictly follow all procedures, not just those that pertained to reviewing overdraft reports. Also, the letter stated that she would be subject to ongoing reviews to ensure she followed procedures, and further issues would result in disciplinary action. The court found that the employee’s actions posed a serious risk to the bank. 

The employee also did not fulfill her requirements for charting notes but claimed that she did not understand parts of the template. However, she had previously worked for eight years in a higher position as a financial advisor for the bank. The employee had filled out the same content for different clients and stated that this did not pose any risk to the bank because a mistake could be caught later. The court found that she disregarded the requirement to keep accurate records, which went against the bank’s need to maintain client service, comply with regulations, and mitigate risk. Also, the court found that this was a serious lack of judgment by the employee that put both the bank and the clients at risk. 

The employee was also found to have accessed clients’ credit bureau information without signed consent, which the court concluded could have put the bank at risk of privacy breaches. 

Ultimately, the court concluded that the employee’s misconduct was enough to justify a for cause termination. 

Key Takeaways 

To find cause for termination, the employer must show that the employee engaged in willful misconduct that was serious enough to warrant a termination. This can include conduct that puts the employer at serious risk, such as in the Pirani case.

Contact Haynes Law Firm in Toronto for Advice on Termination and Wrongful Dismissal Claims

Employers and employees should carefully consider the termination clauses set out in the employment contract and any factors that may be relevant for cause termination. Our experienced employment law legal team at Haynes Law Firm in Toronto can assist you with issues that arise from termination. For employees, our goal is to ensure that they understand their rights and receive maximum compensation in wrongful dismissal cases. Haynes Law Firm also assists employers in avoiding liabilities that may arise from terminations that are not permitted by the legislation. We are dedicated to finding the best resolution for you.

To book a consultation, please contact us online or by phone at 416-593-2731.

During economic uncertainty, difficult decisions must be made, and terminations may become more commonplace. Even senior, high-level employees may be terminated despite long years of service with their employer. Generally, there would be a longer notice period for these types of employees. While there is no upper limit to the notice period, generally, a notice period longer than 24 months would only be appropriate in cases with exceptional circumstances. Some cases have increased the notice period to around 30 months of pay in lieu of reasonable notice. 

In this post, we will discuss when a court may find that the reasonable notice period of an employee should extend beyond 24 months. In particular, we will examine a recent case, Milwid v. IBM Canada Ltd., 2023 ONSC 490, to illustrate how the court balances the factors in finding whether a case is exceptional to warrant a notice period longer than 24 months. The purpose of this post is to provide important takeaways for both employees and employers when it comes to determining a reasonable notice period after termination.

What are the factors for determining an employee’s reasonable notice period upon termination?

When an employee is terminated, they are entitled to reasonable notice or pay in lieu of notice. The length of the reasonable notice period varies on a case-by-case basis. For all employees, the court must consider the following factors for determining a reasonable notice period:

1. The character of employment;
2. The employee’s length of service;
3. The employee’s age;
4. The availability of similar employment, given the employee’s experience, training, and qualifications.

Longer reasonable notice periods in exceptional cases

There are further considerations to determine if the case is exceptional to warrant a longer notice period beyond 24 months. 

The court can look into what would be considered similar employment for the terminated employee. The court can consider if the employee had a substantial annual compensation and if there was the possibility of receiving equity in their employer’s company. If these circumstances exist, then the court may extend the reasonable notice period, as it would be more difficult to find similar employment with the same compensation or possibility of receiving equity in the company. 

The court can also look at whether or not the termination was essentially a forced retirement, given the age and circumstances of the employee. For example, if an employee is nearing the age of 60 and over and they worked for the employer for 20 to 30 or more years, then the court may find that a longer notice period is appropriate. The length of service of an employee is considered to affect their employability, especially if they have worked exclusively for their employer for a long time. 

The character of employment is also a critical factor for determining whether or not a longer notice period is appropriate. Generally, a reasonable notice period longer than 24 months may apply in cases where the employee was an executive or had significant managerial duties. 

Pandemic as a factor for length of reasonable notice period 

The court can also consider economic circumstances when determining an employee’s reasonable notice period. In particular, a longer notice period may be appropriate if it is shown that there is an economic downturn generally or in a particular industry that would affect the employee’s ability to find similar employment. In other words, an economic downturn may mean that it takes longer for the employee to find similar employment, so the reasonable notice period would be extended to reflect this circumstance. 

The court will look at the timing of the termination in relation to the pandemic as well. For instance, the courts have recognized that the pandemic, especially at the beginning stages of government shutdowns with great economic uncertainty, can affect the employee’s ability to find similar employment. However, in some cases where an employee was terminated right at the beginning of the pandemic (i.e. March 2020), the court found that it was not yet clear at that time of termination how the pandemic would affect the economy. 

Senior management employee granted reasonable notice period of 26 months for pandemic layoff

The Milwid case can help illustrate how the factors apply in a particular scenario. In this case, the employee was granted 26 months of reasonable notice. While there is no upper limit to an employee’s reasonable notice period, cases beyond a 24-month notice period are considered exceptional cases. 

In the Milwid case, the employee worked for the employer for 38 years after immigrating to Canada from South Africa. In South Africa, he also worked for the same company. He worked in a high-level managerial role for one of the company’s technical units for software and cloud solutions. 

His annual salary was approximately $169,000, and his compensation included RSUs and a discretionary bonus. He was terminated in May 2020, near the pandemic’s start, and a portion of his RSUs would vest in November 2020. He was 62 at the time of termination.

The court found that a lengthier period of reasonable notice was appropriate. In particular, the court noted that the employee worked for the company for 38 years, most of his working life. Also, the company was his only employer since he immigrated to Canada. The court found that in situations such as this, the employee’s length of service would impact the employee’s employability, as a future employer may view that employee as set in their ways and not adaptable to change, making it more difficult for the employee to find a similar position. A longer notice period was therefore necessary. Also, given that the employee was 62 at the time of termination, this amounted to a forced retirement warranting a longer notice period. 

Also, due to the employee’s specialized skills, a longer notice period was appropriate. The court found that the employee in this case had significant responsibilities in a specialized industry. His role was just below an executive, and he led a business unit. He also had significant responsibilities in developing and supporting the marketing department, including overseeing several managers. 

An additional month was included in the reasonable notice period to recognize the impact of the pandemic on the ability to find similar employment, given the economic uncertainty in May 2020 when the employee was terminated. 

Contact Toronto Employment Lawyer Paultte Haynes for Advice on Termination and Wrongful Dismissal Claims

Our experienced employment lawyer, Paulette Hanyes, at Haynes Law Firm in Toronto, can assist you with issues that arise from termination. For employees, our goal is to ensure that they understand their rights and receive maximum compensation in wrongful dismissal cases. Haynes Law Firm also assists employers in avoiding liabilities that may arise from terminations not permitted by the legislation. We are dedicated to finding the best resolution for you.

To book a consultation, please contact us online or by phone at 416-593-2731.

As an employee, if you are terminated, you are entitled to a reasonable notice period or pay in lieu of notice at common law. The notice period can be quite extensive for employees who have worked at the company for a long time and maybe even longer depending on the individual’s particular circumstances, such as their age, role, etc. It is, therefore important to determine the notice of termination date, which affects the notice period and how much compensation an employer would need to provide to the terminated employee. 

This article will discuss what happens when an employer extends an employee’s termination date and how it would affect an employee’s notice period. We will discuss a critical case, Di Tomaso v. Crown Metal Packaging Canada LP, 2011 ONCA 469, which provided a key ruling on termination dates if an employer extends them. This post will provide important takeaways for employees who are facing an extension to their termination date or for employers to understand their obligations during the termination of an employee. 

Regulation allows temporary work for a terminated employee 

Issues concerning termination are covered by the Employment Standards Act, 2000, S.O. 2000, c. 41. There is a further regulation (O. Reg. 288/01: Termination and Severance of Employment – the “Regulation”) that sets out additional rules for terminating an employee. 

In particular, at s. 6 of the Regulation:

Temporary work, 13-week period

6. (1) An employer who has given an employee notice of termination in accordance with the Act and the regulations may provide temporary work to the employee without providing a further notice of termination in respect of the day on which the employee’s employment is finally terminated if that day occurs not later than 13 weeks after the termination date specified in the original notice.  O. Reg. 288/01, s. 6 (1).

(2) The provision of temporary work to an employee in the circumstances described in subsection (1) does not affect the termination date as specified in the notice or the employee’s period of employment.  O. Reg. 288/01, s. 6 (2).

This means that if an employer gives notice to an employee of termination, that employee can continue to work for up to 13 additional weeks for the employer without altering the notice of termination date. This is significant, as it affects the notice period and how much compensation an employer would need to provide to an employee. An employer can essentially count that period of temporary employment towards the employee’s statutory notice entitlement, thus reducing the compensation owed. 

What happens when an employer continues to extend the termination date on multiple occasions? The following Di Tomaso provides a ruling on this issue. 

Employer extends termination date five times 

In the Di Tomaso case, the employer, Crown Metal, was a manufacturer of metal packaging. The terminated employee was Mr. Di Tomaso, a mechanic for the company. He had worked for the company for 33 years and was 62 at the time of termination. 

Crown Metal first informed Mr. Di Tomaso of his termination on September 9, 2009, and set the termination date at November 6, 2009. A few days before this termination date, on November 4, 2009, Crown Metal extended Mr. Di Tomaso’s employment by a few weeks to a new termination date of December 18, 2009. 

Crown Metal extended Mr. Di Tomaso’s termination date over five months. Before each termination date, Crown Metal would inform him that they were extending his employment. Mr. Di Tomaso ultimately received five written notices of termination, which contained four different termination dates, with the last letter confirming the final termination date set out in the previous letter. Each letter indicated that Mr. Di Tomaso’s employment was being extended temporarily. 

Mr. Di Tomaso was ultimately terminated on February 26, 2010. He received 26 weeks’ severance pay as per the Employment Standards Act and his accrued vacation and benefits. 

Lower court finds only the last notice of termination was clear and unequivocal 

Mr. Di Tomaso then filed an action, seeking 24 months’ pay for wrongful dismissal at common law. 

Crown Metal claimed that the original termination notice on September 9, 2009, should be upheld, as the temporary extensions were authorized by s. 6 of the Regulation. They claimed that each of the extensions was valid, as they were less than the 13 weeks as specified by the Regulation. 

Mr. Di Tomaso claimed that the extensions ought to be cumulative and were, therefore, longer than the 13 weeks permitted by the Regulation. He claimed that the final letter in February 2010 provided him with clear notice of termination. 

The lower court judge found that s. 6 of the Regulation did allow an employer to count a temporary employment period towards the notice period. The lower court agreed with Mr. Di Tomaso’s interpretation that the extensions should be viewed cumulatively. 

The lower court determined that where there are ambiguities in the legislation, it should be interpreted to benefit the employee, as the Employment Standards Act is meant to provide minimum standards to protect and provide certainty to employees. The court noted that notice of termination must be clear and unequivocal, and only the final letter fulfilled these requirements. 

Court of Appeal upholds finding that temporary work extensions should be cumulative 

Crown Metal appealed the decision. 

The Ontario Court of Appeal upheld the lower court’s decision as it best fits the purpose of the legislation. In particular, if an employer was allowed to provide notice of termination but also extend the employment for multiple periods of less than 13 weeks, then this would be contrary to the purpose of the Employment Standards Act, which was enacted to protect employees. The Court of Appeal agreed with the lower court that Mr. Di Tomaso did not have certainty of his termination until the final date. Therefore, the extensions of his employment did not count towards the notice period and compensation that was required from Crown Metal. 

The appeal was dismissed. 

Key Takeaways 

An employer can extend an employee’s employment temporarily for not more than 13 weeks. If there are further periods of temporary employment, then only the final termination date will be upheld. An employer is not permitted to continually extend an employee’s employment for periods of less than 13 weeks and claims that the termination date ought to be the original date to limit the compensation required for reasonable notice. 

Contact Haynes Law Firm in Toronto for Advice on Termination and Wrongful Dismissal Claims

Our experienced employment law legal team at Haynes Law Firm in Toronto can assist you with issues that arise from termination. For employees, our goal is to ensure that they understand their rights and receive maximum compensation in wrongful dismissal cases. Haynes Law Firm also assists employers in avoiding liabilities that may arise from terminations that are not permitted by the legislation. We are dedicated to finding the best resolution for you.

To book a consultation, please contact us online or by phone at 416-593-2731.