Category: Employee Terminations

While an employer is entitled to terminate an employee at any time, the employee may bring a wrongful dismissal action if the employer does not provide sufficient notice or pay in lieu of notice, as required by law. 

Some employment agreements attempt to remove an employee’s entitlement to receive common law notice in the event of termination without cause. This article looks at how courts interpret such provisions, along with a recent decision of the Court of Appeal for Ontario that found an agreement’s termination provisions were unenforceable.

Employment agreements may attempt to reduce the length of notice for termination without cause

Employment agreements normally contain provisions relating to termination. Some agreements state that if the employee is terminated without cause, the employer will pay the minimum notice period required under the Employment Standards Act 2000 (ESA) but will not pay any additional amounts, such as notice that would have been required under the common law.

As we have previously reported, while employers have a statutory obligation to give a minimum period of notice to employees terminated without cause, notice periods under the common law may be more generous. 

Courts have decided that termination provisions are unenforceable where the just cause termination provision violates the ESA

Since the case of Waksdale v Swegon North America Inc., courts have been finding provisions that remove common law notice for without cause terminations unenforceable where the agreement also contains a just cause termination provision that violates the ESA.

Firstly, courts have held that broad termination for just cause provisions that remove the entitlement to any notice may violate the ESA and be void. This is because, according to the Termination and Severance of Employment Regulation (Regulation), statutory notice must be provided except in certain circumstances, such as where the employee “has been guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer”. Attempting to contract out of the obligation to pay statutory notice for a just cause termination where the employee’s conduct does not rise to the level of wilful misconduct is therefore not permitted under the ESA.

Secondly, courts have not been prepared to sever such a just cause termination provision from the other termination provisions in the employment agreement. In other words, courts have found that the correct approach is to determine whether the termination provisions in an agreement read as a whole violate the ESA. If the just cause termination provision is void for violating the ESA, the without cause provision is also unenforceable. This is the case even if the without cause provision provides for the payment of statutory notice in accordance with the ESA.

Court of Appeal re-examines a just cause termination provision

In Rahman v Cannon Design Architecture Inc., the Ontario Court of Appeal was called on to re-examine a just cause termination provision that the Superior Court of Justice decided did not violate the minimum standards of the ESA.

CannonDesign employed the employee as a senior architect, principal and office practice leader for over four years. She was terminated without cause and paid four weeks of base salary. When she joined the employer, she signed an offer letter which restricted her notice to the minimum amount specified in the ESA in the event of without cause termination and also said:

CannonDesign maintains the right to terminate your employment at any time and without notice or payment in lieu thereof if you engage in conduct that constitutes just cause for summary dismissal.

The Superior Court of Justice upheld these provisions, deciding that there was a mutual intent to comply with the minimum ESA standards. The judge gave weight to the fact the termination provisions were the object of specific negotiation after the employee obtained independent legal advice. The employee appealed.

Court of Appeal decides that the just cause termination provision violated the ESA

Justice of Appeal Gillese, writing for the Court of Appeal, decided that the judge erred by allowing the employee’s sophistication and access to independent legal advice, coupled with the parties’ subjective intention to not contravene the ESA to override the plain language in the termination provisions. 

Her Honour explained that ESA notice and termination pay must be given for all terminations, even those for just cause, except in the circumstances set out in the Regulation, where the employee is guilty of wilful misconduct. The wilful misconduct standard requires evidence that the employee was “being bad on purpose.”

Her Honour noted that nothing in the just cause termination provision limited its scope to just cause terminations for wilful misconduct. As a result, the contract purported to give CannonDesign the right to terminate the employee without notice or payment for conduct that constitutes just cause alone. This contravened the ESA and was therefore void. 

The termination provisions were unenforceable

Finally, Justice of Appeal Gillese, following the approach in cases like Waksdale, held that if a termination provision in an employment agreement violated the ESA, all the termination provisions in the contract were invalid. 

As a result, the Court of Appeal decided that the termination provisions in the contract were void and could not be relied upon by the employer.

The Superior Court of Justice has continued to follow this approach and finds termination provisions unenforceable (see, for example, the recent decision of Nicholas v Dr. Edyta Witulska Dentistry Professional Corporation).

Contact Haynes Law Firm in Toronto for Guidance on Employee Termination and Employment Contracts

Haynes Law Firm helps employers and employees throughout Ontario achieve effective solutions to legal issues and conflict management in employment law and civil litigation. We ensure our employee clients leave nothing on the table when negotiating the terms of their dismissal so they have the resources they need while they seek new employment. We also help employers manage employee terminations to limit their exposure to legal claims. We carefully draft employment contracts to limit reasonable notice. Please contact us online or call us at 416.593.2731.

While an employer is entitled to terminate an employee at any time, the employee may bring a wrongful dismissal action if the employer does not provide sufficient notice or pay in lieu of notice, as required by law.

This article looks at the recent decision of the Ontario Superior Court of Justice in Gracias v Dr. David Walt Dentistry. This case raised several interesting issues, including whether the parties can contract out of the requirement to pay reasonable notice upon termination and whether Canada Emergency Response Benefit (CERB) payments should be deducted from damages awards. In addition, the employer went to lengths to try to show that the employee had fabricated records of her job applications to prove that she had not mitigated her loss.

The plaintiff was dismissed without cause from her almost six-month employment 

In September 2019, the plaintiff employee accepted a full-time job offer from the defendant, Walt Dentistry. She is a 39-year-old dental hygienist. 

Her employment contract stated that she could be terminated without cause for any reason upon the provision of the minimum notice required to be provided under the Employment Standards Act 2000 (ESA) and that no further amounts shall be due, including under the common law. It also stated that she could be terminated for cause in certain circumstances without notice or compensation in lieu of notice. 

After five months and twenty-one days of employment, the plaintiff was dismissed without cause on March 15, 2020. She received $16,000 in CERB payments between March and September 2020. In September, she was hired by another company to provide dental practice management and advisory services.

The plaintiff was entitled to notice under the common law despite her employment contract attempting to preclude this 

Justice Perrell explained that employers and employees could rebut the presumption of reasonable notice by agreeing to a different notice period. Still, their agreement will be enforceable only if it complies in its entirety with the minimum employment standards of the ESA.

His Honour decided that the terms of the plaintiff’s employment contract dealing with termination for cause did not comply with the ESA. Specifically, these provisions would deny the plaintiff any notice and her benefits under the ESA for conduct that may not amount to wilful misconduct. This is the benchmark set by the Act for depriving an employee of statutory notice.

As a result, even though the termination without cause provision in the contract may be lawful, the unlawful termination provision could not be severed and tainted the entirety of the contract’s termination provisions. His Honour held that the plaintiff was entitled to her common-law entitlements for dismissal without cause.

The role of the COVID-19 pandemic in the assessment of damages

Justice Perrell explained that some court decisions had found CERB payments were not to be deducted from a wrongful dismissal award, while others had found that they were. Without explanation, his Honour stated that he preferred the reasoning in the former group of cases and decided not to deduct the CERB payments from the plaintiff’s damages.

His Honour explained that economic factors such as a downturn in the economy or in a particular industry or sector that indicate that an employee may have difficulty finding another position might justify a longer notice period. However, his Honour preferred the employer’s evidence that, despite the pandemic, there was a robust enough market for dental hygienists such that the downturn in the economy did not justify a longer notice period.

Three months notice period was reasonable

Justice Perrell applied the Bardal factors to determine the length of reasonable notice. Although the plaintiff had worked for less than six months, his Honour considered three months a reasonable notice period. His Honour noted that the plaintiff was in the prime of her career with considerable work experience and her age, credentials, and experience presented competitive advantages in the job market. 

The employer did not establish a failure to mitigate

Justice Perrell explained that the onus was on the defendant to establish a failure on the part of the plaintiff to take reasonable steps to find a comparable position. “Releasing the dogs of litigation war and going for the jugular”, the employer sought to demonstrate that the plaintiff had falsified evidence of her Internet job applications.

His Honour preferred the plaintiff’s evidence that she did not falsify documents to that of an expert forensic examiner retained by the defendant, who opined that she had falsified most (but not all) of the 139 job applications she claimed to have made. 

His Honour found that there was insufficient evidence to conclude that the plaintiff had fabricated the applications and that it was far more plausible that any anomalies were a product of mistake or misadventure in the plaintiff’s use of a job application website or her email account. His Honour said:

There was no purpose to fabrication, and it would be idiotic for her to falsify evidence … She had 37 of the 139 job applications that are acknowledged to be genuine. That would have been enough to rebuff Walt Dentistry’s attack, because the law is that mitigation needs only to be reasonable, not comprehensive, and she did not need so much evidence, nor did she need to prove that she applied to every dental job posted on Indeed.com or posted elsewhere.

Justice Perrell awarded the plaintiff a three-month notice period. 

Contact Haynes Law Firm in Toronto for Guidance on Employee Termination and Employment Contracts

Haynes Law Firm helps employers and employees throughout Ontario achieve effective solutions to legal issues and conflict management in employment law and civil litigation. We ensure our employee clients leave nothing on the table when negotiating the terms of their dismissal so they have the resources they need while they seek new employment. We also help employers manage employee terminations to limit their exposure to legal claims. We carefully draft employment contracts to limit reasonable notice. Please contact us online or call us at 416.593.2731.

The next in our “has my employee…?” series looks at whether an employee has engaged in wilful misconduct. If an employee engages in wilful misconduct or neglect of duty that was grave, it is possible to terminate them “for cause,” whereas termination without cause requires the payment of reasonable notice. 

However, the recent decision of the Court of Appeal for Ontario in Render v ThyssenKrupp Elevator (Canada) Limited shows that it might not be this simple. The Court recognized that employee conduct that does not rise to the level of wilful misconduct may still warrant dismissal for cause, but the employee will be entitled to the minimum termination and severance entitlements under the Employment Standards Act 2000 (ESA).

Termination without cause vs. termination for cause 

It is widely known that employers are permitted to terminate an employee. However, when terminating an employee without cause, the employer must provide reasonable notice or payment in lieu of notice. We have previously reported on the length of such notice. Employees may also be entitled to severance pay, depending on the circumstances.

On the other hand, employers are not obligated to provide notice of termination to an employee who is terminated for cause. This can only occur in serious situations – incompetence or poor performance typically does not warrant termination for cause (at least outside the context of an implemented progressive discipline policy.

According to the Termination and Severance of Employment Regulation 2001, if an employee “has been guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer”, they are not entitled to reasonable notice, payment in lieu of notice or severance pay under the ESA.

Employee slaps female co-worker on the buttocks

The plaintiff had worked at his father’s elevator company since 1984. In 2002, it was sold to the defendant’s employer and the plaintiff was made the operations manager of the Mississauga office. Justice of Appeal Feldman described the office environment in the following terms:

There was a very social atmosphere in the Mississauga office, including lunches and other events and regular joking and bantering… This atmosphere included inappropriate jokes. One of the men… made sexist and offensive comments to or about Ms. Vieira [the slapped co-worker]. The male workers would occasionally tap each other on the buttocks and say “good game” as if they were football players on the field or in the locker room… The [plaintiff] and Ms. Vieira would engage in jokes and banter, including Ms. Vieira making jokes or teasing the [plaintiff] that he was short and not as good-looking as his brother… she gave him a holiday party gift of an apron with a muscular man in underwear on it.

The trial judge found that Ms. Vieira made a joke about the plaintiff’s height. He crouched down with his face close to her breasts, then slapped her buttocks. The trial judge found that it was not accidental. Three days after the incident, the plaintiff was handed a termination letter with no severance, termination or vacation pay. 

The plaintiff claimed he was wrongfully dismissed, or in the alternative that he should nevertheless be granted his ESA entitlements. 

Trial judge finds that the employer had grounds to terminate the employee for cause 

The trial judge explained that the governing rule in termination for cause cases is proportionality. In other words, an employee’s job can only be terminated for cause if that is a proportionate response to the misconduct. The core question for determination is whether an employee has engaged in misconduct that is incompatible with the fundamental terms of the employment relationship.

The judge decided that termination for cause was warranted in the circumstances. Given the seriousness of the conduct involving non-consensual touching of a private part of the body, the employer determined that it could not condone it or be seen to condone it. 

The judge looked at all the circumstances, including that the plaintiff was a manager responsible for implementing the company’s anti-harassment and anti-discrimination policy, and decided that the employer was entitled to terminate the plaintiff’s employment for cause. 

Court of Appeal awards the employee eight weeks of statutory termination pay

However, the Court of Appeal decided that the trial judge erred by failing to award the plaintiff his entitlements under the ESA. 

Justice of Appeal Feldman held that the standard to be disentitled from the ESA entitlements is different from that required for dismissal for cause under the common law. According to the Regulation, “wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer” is required. The test is higher than the test for “just cause”:

Careless, thoughtless, heedless, or inadvertent conduct, no matter how serious, does not meet the standard. Rather, the employer must show that the misconduct was intentional or deliberate. The employer must show that the employee purposefully engaged in conduct that he or she knew to be serious misconduct.

Her Honour decided that the plaintiff’s conduct did not rise to the level of wilful misconduct required under the Regulation. Although the conduct warranted dismissal for cause, it was not pre-planned. It was done in the heat of the moment in reaction to a slight. 

As a result, because the plaintiff had been employed for eight years or more, he was entitled to eight weeks of termination pay under the ESA.

Contact Haynes Law Firm in Toronto for Guidance on Employee Termination

The team at Haynes Law Firm in Toronto helps employers in multiple industries to manage employer risk and reduce liability concerning employee terminations. We work with employers across the country to limit their exposure to legal claims stemming from poorly executed terminations. We also assist employees that have been terminated to ensure they receive maximum compensation and all eligible benefits from their employers.

Haynes Law Firm helps employers and employees throughout Ontario achieve effective solutions to legal issues and conflict management in employment law and civil litigation. To discuss how our employment law team can assist you, please contact us online or call us at 416.593.2731.

The next in our “has my employee…?” series looks at whether an employee has abandoned their position. Again, in some circumstances, it may not be obvious. For example, what happens if a worker takes an extended break from work? Whether an employee has abandoned their position has implications, for instance, on whether the employee is owed termination entitlements.

This article looks at what constitutes abandonment and some of the implications. We also look at a recent decision of the Superior Court of Justice of Ontario, in which an employee claimed that she was wrongfully dismissed after taking extended medical leave. At the same time, the employer argued that she had not provided a doctor’s certificate and had abandoned her employment.

What constitutes abandonment?

Whether an employee has abandoned their position depends on whether the statements or actions of the employee, viewed objectively by a reasonable person, clearly and unequivocally indicate the employment contract binds an intention to no longer. As is often the case, the totality of the circumstances must be considered. 

In a medical leave context, there is case authority for the proposition that employees on medical leave are not immune to abandonment where they fail to follow employee policies and where there is no medical evidence available to support that the employee could not comply with these policies.

Why does it matter whether an employee has abandoned their position?

An employee abandoning their employment has different effects than an employer terminating an employee, so characterization is important. 

If an employer terminates an employee without just cause, they are entitled to reasonable notice or pay in lieu of notice. The employee might be entitled to other things, such as severance pay. Employees may also be entitled to retain benefits for the duration of the reasonable notice period and unpaid compensation, such as bonuses or commission. These do not apply if an employee has abandoned their employment.

Employee takes an extended medical leave of absence

In Hettrick v Triple F Paving Co. Ltd., the plaintiff employee was hired in 1996 as a receptionist, bookkeeper and office administrator for the defendant paving company located in Oakville. In 2015, she wrote to the operations manager to request a stress-related medical leave of absence. In this letter, the plaintiff stated that she would be unable to work for “4 weeks or longer”, but that she expected to be able to fulfil her duties upon recovery and return to work. She asked what additional information was needed to process the request, offering to obtain a doctor’s certificate.

A week later, she received a paycheque and her record of employment, with a post-it note saying, “Don’t forget to send/email the Doctor’s Note.” About another week later, the employer told her it still had not received the doctor’s note and that if she did not provide it within two weeks, the employer would need to advise the Canada Revenue Agency (CRA) that the record of employment would need to be cancelled.

A letter from the plaintiff’s doctor dated the following month confirmed that she was not presented well enough to return to work, but the plaintiff did not forward it to her employer due to her mental state at the time.

Employee seeks to return to work

About two years later, in 2017, the plaintiff wrote to the company’s president proposing a graduated return to work. About a month and a half later, the employer responded by saying that it had concluded that she had abandoned her position because she had not provided a doctor’s note. Furthermore, there were no vacant positions.

The plaintiff brought a claim for wrongful dismissal, arguing that she had not abandoned her position.

Court decides that the employee had not abandoned their position

Justice Miller found that the post-it note did not constitute a communication indicating that a medical certificate was required to approve the leave. Neither did the subsequent letter, which just indicated consequences regarding the CRA.

Her Honour held that the plaintiff had not abandoned her employment. The plaintiff had not clearly and unequivocally indicated an intention to abandon her employment. This was because when the plaintiff requested leave, she specifically communicated her desire to return. The employer did not inquire whether this intention had changed or warn that her position would be considered abandoned.

Employee was entitled to 18 months’ notice

The plaintiff asked for 24 months’ pay in lieu of notice, along with payment of bonuses and benefits. The defendant argued that damages should be limited to 18 months’ notice and should not include any bonus, which was discretionary.

Justice Miller applied the Bardal factors and decided on 18 months’ pay, noting that the plaintiff was 73 when her position was terminated and that she did not hold a management position. Her Honour agreed with the plaintiff that she was entitled to the bonus paid every year she worked for the company and was, therefore, an integral part of her annual salary. Finally, her Honour held that at age 73, the plaintiff had no duty to mitigate her loss. 

Justice Miller upheld the plaintiff’s claim and granted damages of almost $77,000. 

Contact Haynes Law Firm in Toronto for Guidance on Employee Termination

The team at Haynes Law Firm in Toronto helps employers in multiple industries to manage employer risk and reduce liability concerning employee terminations. We work with employers across the country to limit their exposure to legal claims stemming from poorly executed terminations. We also assist employees that have been terminated to ensure they receive maximum compensation and all eligible benefits from their employers.

Haynes Law Firm helps employers and employees throughout Ontario achieve effective solutions to legal issues and conflict management in employment law and civil litigation. To discuss how our employment law team can assist you, please contact us online or call us at 416.593.2731.

Sometimes it might not be obvious whether an employee has resigned. For example, what happens if a worker walks out during the middle of a shift? Knowing whether an employee has resigned can have implications, such as whether the employee is owed termination entitlements.

This article looks at what constitutes resignation and some of the implications. We also look at a recent decision of the Superior Court of Justice of Ontario, in which an employee claimed that he was constructively or wrongfully dismissed. At the same time, the employer argued that he voluntarily resigned from his employment in the middle of a shift.

What constitutes resignation?

For a resignation to be valid and enforceable, it must be clear and unequivocal. This means that it must objectively reflect an intention to resign – the test is whether a reasonable person would have understood that the employee resigned. This is a fact-driven assessment, and the surrounding circumstances’ totality is relevant.

Courts have accepted that a resignation during a spontaneous outburst in highly charged emotional circumstances can undermine its essential voluntariness. Therefore, in some cases, the employee’s conduct may be sufficiently ambiguous that it cannot be objectively construed as a voluntary resignation.

Furthermore, an employee may retract a resignation provided that the employer has not relied upon it to its detriment.

Why does it matter whether an employee has resigned?

An employee resigning has different effects than an employer terminating an employee, so the characterization is important. 

Employer is responsible for payment if the employee is terminated

If an employer terminates an employee without just cause, they are entitled to reasonable notice or pay in lieu of notice. We recently reported on how the length of this period is calculated. The employee might be entitled to other things, such as severance pay. These do not apply if an employee has voluntarily resigned.

However, if an employee resigns following a situation that warrants a constructive dismissal claim, this is not a voluntary resignation. This may occur, for example, if the employer makes a significant and unilateral change to the employment relationship. In such circumstances, the employee will be entitled to a remedy, which is typically paid in place of reasonable notice and severance pay, if applicable and warranted. Employees may also be entitled to retain benefits for the duration of the reasonable notice period and unpaid compensation, such as bonuses or commission.

Employee liable for damages?

Employees are entitled to resign from their employment but need to provide reasonable notice of their resignation. This is to give the employer time to hire and train a replacement.

The Employment Standards Act 2000 does not set out minimum notice periods for employees. It might be set out in the employment contract. Factors considered by courts that influence the length of the notice period include:

• the nature of the employee’s position and the area of work that the employer was competing in;
• the length of time it would take to recruit and train a replacement; and
• the salary and length of service of the employee.

Failure to provide such notice may give the employer a claim for damages. The employer must prove loss and that they have attempted to mitigate it. It is possible that the employer may have other claims, for example, for an employee’s breach of the employment contract or fiduciary duty.

Employee verbally resigns and executes written confirmation in the middle of a shift

In Miller v Ontario Potato Distribution Inc., the plaintiff employee was employed for 11.5 years in a manual labour position at the defendant employer’s potato farming and distribution business in Cambridge. 

He verbally resigned his employment in the middle of a shift and executed a written confirmation of his resignation. He later asked for a “buy-out.”

The plaintiff commenced an action for constructive dismissal. He argued that he resigned following a threatening incident that made him feel unsafe and that he executed the written confirmation under duress. Specifically, the plaintiff claimed that his supervisor sent him to the car park at 3 am. He was threatened by an unidentified man wearing a trench coat concerning texts that he sent to the day shift supervisor two weeks previously complaining about having his benefits cut off. 

Court finds no constructive dismissal and that the plaintiff voluntarily resigned

Justice Broad accepted the defendant’s version of the events, finding that the plaintiff had not proved that the threatening incident took place and that the defendant had any role in it. As there was no other evidence led to support the existence of a hostile work environment, there was no basis for finding that the plaintiff was constructively dismissed. 

His Honour found that the resignation was not part of a spontaneous outburst in highly charged emotional circumstances because there was no proof that the threatening incident had occurred. As a result, there was nothing to suggest that the resignation was not voluntary or that the plaintiff was under duress. 

His Honour felt that the plaintiff’s subsequent conduct was consistent with the belief that he had effectively resigned. The fact that he later asked for a “buy-out” implied that he knew his employment had ended. At no point did he seek to resile from or withdraw his resignation.

As a result, Justice Broad held that the plaintiff had voluntarily resigned his employment. His Honour dismissed the plaintiff’s action. 

Contact Haynes Law Firm in Toronto for Guidance on Employee Terminations

The team at Haynes Law Firm in Toronto helps employers in multiple industries to manage employer risk and reduce liability concerning employee terminations. We work with employers across the country to limit their exposure to legal claims stemming from poorly executed terminations. We also assist employees that have been terminated to ensure they receive maximum compensation and all eligible benefits from their employers.

Haynes Law Firm helps employers and employees throughout Ontario achieve effective solutions to legal issues and conflict management in employment law and civil litigation. To discuss how our employment law team can assist you, please contact us online or call us at 416.593.2731.

When terminating employees without cause, employers must provide reasonable notice or pay in lieu of notice. While reasonable notice under the Employment Standards Act 2000 is based on the duration of employment, notice periods under the common law may be more generous. We recently reported on the factors that are considered in determining the length of the notice period.

One issue that can arise in employee terminations is whether there has been a break in the employment relationship. This matters because the length of service is relevant for the purpose of determining the period of reasonable notice.

This article looks at whether retirement and then re-employment constitutes a break in service. We also look at a recent decision of the Court of Appeal for Ontario in which an employee argued that she was terminated after 39 years of service. On the other hand, the employer claimed that she recently retired and then was rehired for a period of one and a half years only.

Does retirement constitute a break in service?

It all depends on the specifics, so it is important to get advice from an experienced employment law lawyer. Assessing a potential break in service is a fact-specific exercise.

If an employee unequivocally resigns or retires and then accepts a new offer of employment, it is possible that this will constitute a break in service.

However, as will be seen, this is not always the case. In some circumstances, signing a new employment contract will not break the period of service for the purpose of determining the length of reasonable notice. The years of service clock might not be re-set to zero, for example, if the employee did not voluntarily and knowingly give up their right to common law reasonable notice.

An employee retired for the purpose of accessing her pension plan

In Currie v Nylene Canada Inc., the plaintiff employee took up employment with the employer’s predecessor in 1979. She worked in fiber operations and was employed in a specialized manufacturing role. After numerous promotions and title changes over the years, and changes to the employer following sales of the business, the plaintiff was advised in 2017 that she satisfied the criteria to receive her pension plan. The defendant’s employer told her that she would need to retire to access the plan, but that she would be offered employment following the retirement.

One and a half years after accepting a new offer of employment, the defendant discontinued the relevant part of the business and 17 employees, including the plaintiff, were dismissed without cause. The plaintiff was 58 years old. She was paid 8 weeks of termination pay and 26 weeks of severance pay but remains unemployed. The plaintiff commenced a claim against the employer, including seeking 26 months’ notice.

There was no break in service

The employer argued that the plaintiff retired and accepted a new offer of employment, constituting a break in service. In terms of recognition of service, all that the new contract said was that her service would be recognized for the purposes of determining benefits eligibility.

The trial judge found that there were no entries for 2017 in the plaintiff’s employment file and that the defendant told her that nothing was going to change in her employment. She did not provide the defendant with a notice of resignation or retirement. His Honour found that there was no break in service, stating:

[The plaintiff] was not prepared to stop working. She signed the documents prepared by [the defendant] for the sole purpose of accessing her Pension Plan and on the assurance that her employment would remain the same.

The Court of Appeal agreed, saying that it was open to the trial judge to conclude that the retirement and re-hiring process was for the limited purpose of enabling the plaintiff to access her pension plan and did not affect her years of service for the purpose of determining the reasonable notice period.

Exceptional circumstances supported a notice period that exceeds 24 months

The defendant argued that 15 months’ notice was reasonable, whereas the plaintiff sought 26 months. Prior decisions held that exceptional circumstances should exist to support a notice period that exceeds 24 months. 

The trial judge agreed with the plaintiff that 26 months was reasonable, based on her 39 years of service. His Honour found that there were exceptional circumstances, including:

• that the plaintiff left high school to work for the defendant’s predecessor and she faithfully remained there for her entire working life;
• at the time of termination, the plaintiff was in her twilight working years;
• the plaintiff had very specialized skills making it difficult to find alternate employment and despite diligent efforts to acquire basic computer skills, it was unlikely she would succeed in securing alternative employment;
• the work landscape had evolved since 1979 and the plaintiff’s experience with one employer in a specialized manufacturing job made it very difficult to transfer her skills to a new employer; and 
• given the plaintiff’s age, limited education and skill set, the termination “was equivalent to a forced retirement”. 

The Court of Appeal agreed that there was ample support for the trial judge’s award of 26 months’ salary as compensation in lieu of notice. 

Contact Haynes Law Firm in Toronto for Guidance on Employee Termination

The team at Haynes Law Firm in Toronto helps employers in multiple industries to manage employer risk and reduce liability concerning employee terminations. We work with employers across the country to limit their exposure to legal claims stemming from poorly executed terminations. We also assist employees that have been terminated to ensure they receive maximum compensation and all eligible benefits from their employers.

Haynes Law Firm helps employers and employees throughout Ontario achieve effective solutions to legal issues and conflict management in employment law and civil litigation. To discuss how our employment law team can assist you, please contact us online or call us at 416.593.2731.

In the recent case of Lenting v Huron Tire, the Ontario Superior Court of Justice was called upon to decide whether an employee was discriminated against on the basis of his drug addiction, in contravention of the Ontario Human Rights Code (Code). The employee claimed that he was wrongfully dismissed, while the employer argued that it was entitled to terminate the employee for cause, for reasons unrelated to his addiction.

Plaintiff was treated for drug addiction and returned to work

The 22-year-old plaintiff worked for the defendant’s employer for two years as a tire technician. During the course of his employment, he developed a drug addiction. The defendant testified that the plaintiff exhibited strange behaviour and he received a warning letter for insubordination.

He attended a rehabilitation program and notified the defendant that he had completed the residential part of the program, but that outpatient aftercare sessions would be required. The defendant agreed to rescind previous warnings. It also provided information about its employee assistance program and a copy of its substance abuse policy. The plaintiff returned to work.

Plaintiff was terminated following workplace incidents

The plaintiff’s father attended the workplace and told a member of staff that he had found drugs in the plaintiff’s coat pocket and that he had kicked him out of the house. The plaintiff was searched but no drugs were found. The plaintiff received some verbal warnings, including for missing a shift and allegedly harassing a female co-worker.

He was terminated following an altercation between two other co-workers. The defendant took the position that he failed to assist in the investigation of this altercation by not providing a witness statement, thereby demonstrating insubordination. He crumpled up his statement and tossed it in the trash. 

The defendant believed there was just cause to terminate the plaintiff, but instead proceeded with a without cause termination and paid the plaintiff two weeks in lieu of notice. The plaintiff commenced a claim for wrongful dismissal, arguing that the defendant breached the Code.

Did the defendant violate the provisions of the Ontario Human Rights Code?

The plaintiff argued that he was discriminated against for having an addiction.

Justice George explained that drug addiction is a disability for the purposes of the Code, but that an employee can be terminated so long as there is no nexus between their disability and the termination. His Honour found that the defendant accommodated the plaintiff by allowing him to pursue treatment while maintaining his employment.

His Honour was critical of the plaintiff’s failure to disclose his addiction to the defendant in a timely way, noting that an employee seeking accommodation does not have “a licence…to behave as he pleased” and “is responsible for requesting accommodation and must facilitate the search for accommodation”. The defendant understood addiction and the personal toll it can take, agreeing to rescind previous warnings. It allowed the plaintiff to pursue rehabilitation and was understanding of his predicament. This was in stark contrast with the plaintiff’s unwillingness to assist in the accommodation process. His Honour found that the plaintiff engaged in blatant insubordination by missing work when leave was not granted and that he admitted engaging in harassing behaviour. 

Justice George said:

The Defendant provided information about its Employee Assistance Program, and a copy of its Substance Abuse Policy; it promised that he would not be terminated because of his addiction and would have his job when done treatment; it agreed to speak with and coordinate matters with his father (which the Defendant did until the Plaintiff revoked his consent); and committed to not rely on the warnings issued before disclosure. This is exactly what the right to accommodate contemplates. There is absolutely nothing else it could have done to accommodate the Plaintiff.

The plaintiff’s disability was not a factor in the decision to terminate the plaintiff

His Honour held that the plaintiff’s disability was not a factor in the decision to terminate the plaintiff. The defendant “supported and wanted the plaintiff to succeed”. The final incident was not “an excuse [the defendant] needed to rid itself of the plaintiff once and for all”, but needed to be viewed in the context of prior incidents. Tossing the statement in the trash was “the height of childish behaviour and a display of utter disrespect” and makes clear that the event, together with the preceding incidents, had nothing to do with the plaintiff’s addiction. 

Justice George concluded that the defendant did not violate the Code.

Was the plaintiff terminated without just cause?

The plaintiff claimed that he was wrongfully dismissed and that 2.5 months of notice would be reasonable. The defendant argued that it had just cause to terminate the plaintiff but chose not to. It considered two weeks’ notice as required by the Employment Standards Act sufficient, or in the alternative, that common law entitlement to notice should be limited to 1 to 1.5 months and then clawed back to nothing because of a failure to mitigate.

The plaintiff was entitled to additional notice under the common law

Justice George said that “an employer’s stated grounds for termination must crystallize at the time of termination”. His Honour said that the final incident would not have warranted a dismissal for cause and that the plaintiff was entitled to more than the minimum two weeks’ notice period. His Honour sided with the plaintiff, finding based on the plaintiff’s age, length of employment, and nature of his duties, reasonable notice would typically be anywhere from 2 to 3 months. 

A plaintiff, in every case, has a duty to mitigate against losses suffered. In an employment context, this means that the terminated employee must make reasonable efforts to find a new job. Justice George held that the defendant had not established the availability of similar employment opportunities having regard to the plaintiff’s experience, training and qualifications. Furthermore, the plaintiff enrolled in school which was an acceptable mitigation approach.

Contact Haynes Law Firm in Toronto for Advice on Discrimination

Haynes Law Firm helps employers and employees throughout Ontario achieve effective solutions to legal issues and conflict management in employment law and civil litigation. The team at Haynes Law Firm helps employees who have experienced discrimination in the workplace ensure employers are held liable. We also work with employers to identify and implement accommodations for employees and mitigate legal and financial exposure. Contact us online or call us at 416.593.2731.

While employers are entitled to terminate employees at any time, they must treat employees fairly when doing so. When terminating employees without cause, employers must provide reasonable notice or pay in lieu of notice. This notice period provides employees with financial stability and time to secure alternate employment.

This article looks at what constitutes a reasonable period of notice. While reasonable notice under the Employment Standards Act 2000 (ESA) is based on the duration of employment, notice periods under the common law may be more generous. The recent case of Flack v Whiteoak Ford Lincoln Sales Limited in the Ontario Superior Court of Justice considered the impact of the COVID-19 pandemic on notice periods. 

Employees are entitled to a minimum notice period under the ESA

Under section 54 of the ESA, an employer is not permitted to terminate an employee who has been continuously employed for three months or more unless they have given written notice or pay in lieu of such notice.

The required minimum notice period is set out in section 57 and depends on the employee’s period of employment. The required notice period is longer for employees with longer lengths of service. It ranges from one week (after three months of employment) to eight weeks (after eight years or more of employment). You can find the full range of minimum entitlements here.

The common law may impose additional notice to an employee terminated without cause

However, employers also need to consider the common law because case law has established additional notice requirements commonly applied in a termination. These requirements are often added to an employee’s damages award if they bring a successful case for wrongful dismissal. Employers sometimes include pay instead of notice beyond the statutory minimums in the termination package to avoid a wrongful dismissal claim. 

For sixty years, the courts have determined reasonable notice by applying the analytical framework laid down by the Ontario High Court in Bardal v The Globe & Mail Ltd (Bardal). The judge in the case said that each case needed to be considered based on its unique circumstances, with regard to four factors:

There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.

Employee argued for a longer notice period due to difficulty finding new employment because of the pandemic

In Flack v Whiteoak Ford Lincoln Sales Limited, a 61-year-old employee with nine months of service was terminated without cause. His employer sought to give two months’ notice, whereas the plaintiff asked for eight months. 

The employee was a finance manager at a car dealership. He was in a fairly senior position, responsible for selling financial products to customers rather than the cars themselves. He was paid on a pure performance basis and earned about $156,000 per annum annualized. He argued that a shorter period of service should attract a lengthier notice period because of the impact on finding new employment. He also argued for a longer notice period due to the souring of market conditions after termination caused by COVID-19. The plaintiff was on the verge of securing a new job just before COVID-19 hit. He resumed his search immediately after the job marketplace began to re-open.

Consideration of the Bardal factors didn’t warrant a lengthy notice period

Justice Dunphy looked at the four factors before deciding on a reasonable notice period. His Honour explained that the use of database searches can only be a tool to identify appropriate ranges for notice periods, but does not dispense with the requirement to conduct an individualized assessment. 

Character of employment

Justice Dunphy, while noting that the importance of this factor had diminished, said that the more “custom” the fit of employee to employer, the more likely that a longer time frame will be needed to find the right combination of job openings and demand. 

His Honour found that, in the particular industry, there was a relatively active market for the services of employees with the right combination of experience and a proven track record, both of which describe the plaintiff’s role.

Length of service

His Honour didn’t think that the plaintiff’s relatively brief service was a major factor in his employability. His three prior positions were comparatively short in duration and there were no lengthy intervening periods of unemployment. This was consistent with the employer’s claim that the market was characterized by relatively frequent turnover. 

Furthermore, there were no factors that would tend to tilt the needle away from the range of reasonable notice that a short period of service would normally suggest, such as being enticed away from prior secure employment or being a high-level executive such that a careful search to find another “fit” was necessary. 

Age of the employee

Justice Dunphy said that there were strong policy reasons against having a principle that older employees are entitled to greater notice than younger employees. Such a principle would quickly become a self-fulfilling prophecy and age has advantages. His Honour found little support for the idea that age played a significant role in the plaintiff’s recent experiences in the job market. 

Availability of similar employment

His Honour decided that the pandemic was not entitled to weight in the form of lengthier notice. Because the period of reasonable notice was something that needed to be determined at the point in time when notice was required to be given, the souring of market conditions post-termination was irrelevant. 

Justice Dunphy decided that a two-month notice period was reasonable in the circumstances.

Contact Haynes Law Firm in Toronto for Guidance on Employee Termination

Haynes Law Firm helps employers and employees throughout Ontario achieve effective solutions to legal issues and conflict management in employment law and civil litigation. We ensure our employee clients leave nothing on the table when negotiating the terms of their dismissal, so they have the resources they need while they seek new employment. We also help employers manage employee terminations to limit their exposure to legal claims. Please contact us online or call us at 416.593.2731.