Historically, the character of employment or level of position
has been an important factor in determining appropriate severance
payments. Unskilled or lower level employees have typically been
entitled to less severance than more highly skilled and higher
level employees. Some decisions have capped severance for such
lower level positions at 12 months. However, in Di Tomaso v. Crown Metal Packaging Canada LP (PDF),
the Ontario Court of Appeal recently rejected any distinction
between skilled and unskilled workers when determining appropriate
severance payments. This case also demonstrates the importance of
clear and unambiguous termination dates.
When Crown Metal made plans to close its manufacturing facility,
the company gave advance working notice to an employee who had
worked for over 33 years in a position which the employer
characterized as "unskilled". Shortly before the expected
termination date, Crown Metal extended the termination date and,
over the following five month period, the employee received five
separate written notices of termination outlining four different
termination dates. Each letter characterized the employment as
being "extended" for a "temporary period".
On the final termination date, Crown Metal provided the employee
with 26 weeks of severance pay pursuant to the Ontario
Employment Standards Act ("ESA"), along with the
requisite vacation pay and benefits, but no other termination or
The employee subsequently commenced a civil action, claiming
failure to provide proper notice of termination or pay in lieu or
notice under the ESA, as well as wrongful dismissal damages of 24
months pay. Crown Metal disputed the notice period and sought
credit for the overall period of working notice.
On an application for summary judgment, the
motion judge determined (PDF) that, while the ESA permits an
employer to provide a period of temporary employment after the
original termination date without having to give new notice, the
cumulative notices in this case exceeded the 13 week period
contemplated under the ESA and created uncertainty about the exact
date of termination. As such, only the final letter received by the
employee provided clear and unequivocal notice of termination.
Therefore, the notice period began on the date of the final
The motion judge also rejected the historical distinction
between skilled and unskilled workers and Crown Metal's
argument that an unskilled employee in a non-managerial position
should never receive more than 12 months' of severance,
regardless of length of service. The employee was 62 years old at
the time of termination, had 33 years of service, and was awarded
22 months pay in lieu of notice.
Court of Appeal Agrees
The Ontario Court of Appeal has agreed with the motion
judge's decision. The Court of Appeal determined that a proper
and purposive interpretation of the ESA demands fresh notice if a
single period of temporary work exceeds 13 weeks beyond the
original termination date. Additionally, the Court of Appeal
observed that a notice of termination would not be "clear and
unambiguous" if it does not include the final termination
The Court of Appeal has also rejected the notion of a 12 month
cap on reasonable notice entitlement for "unskilled"
employees. The Court of Appeal said that in this case, factors such
as the worker's age (62), length of service (33 years), and
unsuccessful job search made the 22 month notice period reasonable,
albeit within the upper end of the range for reasonable notice. The
Court of Appeal also suggested that the character of employment, or
level of position, is a comparably less important factor. It
rejected the assumption that it is easier for an unskilled employee
to find replacement work (which would otherwise justify a lower
Take-Away for Employers
Employers must be mindful that when terminating the employment
of employees in lower level positions, particularly those with long
service, careful consideration should be paid to all relevant
factors in order to determine an appropriate notice period. This
decision may leave employers open to higher severance awards for
lower level positions than they have previously been accustomed to.
To protect against long notice periods, employers should consider
adding severance clauses in employment contracts or offer letters
for such employees.
Further, the case is a reminder that employers must be very
careful when providing notice of termination, particularly when the
employer must later amend or extend the actual termination
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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