Canada: How Not To Terminate A Long-Service Employee

Last Updated: February 25 2015
Article by P.A. Neena Gupta

Lessons learned from Arnone v. Best Theratronics Ltd., 2015 ONCA 63, on appeal from 2014 ONSC 4216

The recent Ontario Court of Appeal in Arnone v. Best Theratronics Ltd., 2015 ONCA 63, illustrates how the litigation process can hammer employers who do not make reasonable offers when terminating a long-service employee. Hard-ball litigation tactics can end up costing the employer way more than a reasonable settlement proposal.

On Nov. 26, 2012, Best Theratronics terminated Matthew Arnone, solely due to restructuring. There was no just cause alleged and the only issue was how much was reasonable notice.

At the time of termination, Arnone was 53 and had worked 31 consecutive years with his employer. He was a certified mechanical engineering technologist with expertise in Cobalt 60 industrial and medical equipment. He was earning approximately $95,000 at the time and belonged to a defined benefit pension plan.

Best Theratronics provided Arnone with the statutory minimum of 14.4 weeks' notice and severance as stipulated in the Canada Labour Code. Arnone sought legal advice. Negotiations were not successful. Litigation ensued. Arnone sued for the following:

  1. 24 months of compensation in lieu of notice;
  2. $65,000 due to the loss of pension benefits; at the time of termination, Arnone was within 16.8 months of having a vested actuarially unreduced pension;
  3. a retirement allowance equivalent to 30 weeks, worth approximately $55,000, based on Best Theratronics' written policy of providing one week per year of service up to a maximum of 30 weeks upon an employee's retirement;
  4. Legal costs and interests.

The First Round

The plaintiff proceeded by way of Summary Judgment – a motion where issues are determined on the paper record. Best Theratronics argued that a full trial with witnesses was necessary to determine whether (a) Arnone had mitigated his damages properly; and, (b) whether Arnone was a low-level supervisory or managerial employee.

Did the court need a full trial?

The judge on the summary judgment motion determined he had no difficulties resolving the outstanding issues on the paper record. The judge had the benefit of the transcripts of cross-examinations on affidavit evidence. The judge made it clear that he did not need live witnesses to resolve the minor factual disputes, especially since Arnone conceded that his role was only supervisory, not managerial, for the purposes of the summary judgment motion. The judge determined that this subtle difference would not impact on his assessment on damages. Furthermore, in light of the fact that Arnone had applied for well over 800 jobs and had ultimately accepted work in a grocery/retail job, the trial judge determined he did not need to hear from witnesses to determine the issue of reasonable mitigation.

The First Round -- The decision on the Summary Judgment motion

The motions judge noted that Arnone was only 16.8 months away from the vesting date of his pension benefits. As such, the trial judge reduced the normal notice period, based on the timing to full pension. The motions judge ruled that Arnone was entitled to:

  1. Compensation in lieu of notice to the date on which his pension would have vested, approximately $133,000;
  2. Compensation of $65,000 for loss of pension benefits;
  3. Approximately $55,000 for the retirement allowance;
  4. Costs of over $52,280, inclusive of HST; and,
  5. Interest.

Had there been no pension issue, the motions judge would have assessed 22 months in lieu of notice. The total award exceeded $305,000.

The Second Round – the Ontario Court of Appeal

Best Theratronics decided to appeal the decision of the trial judge to the Ontario Court of Appeal. At the appeal, Best Theratronics insisted that reasonable notice amounted to 14.4 weeks and argued that the retirement allowance was awarded in error by the motions judge, as Arnone was not a "retiree."

Best Theratronics also argued that it should have received credit for any earnings received by Arnone by way of mitigation. Arnone cross-appealed, complaining that the motions judge ought not to have artificially limited the notice period to 16.8 months.

The Court of Appeal ultimately agreed with Arnone that he should have received 22 months of notice. It stated:

The Bardal analysis remains the approach courts must apply to determine what constitutes reasonable notice of termination, an approach which has not included a consideration of the time between the date of dismissal and the point at which the employee would be eligible for a full pension. In the present case, calculating the period of reasonable notice by reference to the amount of time required to "bridge" the dismissed employee to his date of eligibility for a full pension did not accord with the Bardal analysis. Consequently, the motion judge erred in setting the period of reasonable notice to which Arnone was entitled at 16.8 months, the period of time needed "bridge" his entitlement to full pension.

 The Court of Appeal then determined it was appropriate to deduct Arnone's mitigation earnings, which were in the modest $10,000 to $20,000 range. The Court of Appeal followed its earlier decision in Taggart v. Canada Life Assurance Co. (2006) in awarding both the retirement allowance and the loss of pension benefits.

Interestingly, Arnone's counsel was able to persuade the Court of Appeal to re-open the issue of legal costs. Arnone had "beat" his offer to settle the case and his lawyer argued that Arnone should have received greater indemnification for actual legal expenses. The Court of Appeal ordered the issue of costs be reviewed by the original judge, after consideration of the issues of offers to settle. The Court of Appeal's own cost decision is under reserve.

Once Best Theratronics' own legal costs are factored into the mix, the total cost of fighting the case and the award will no doubt be in the $350,000 to $400,000 range. Given that the Offer to Settle was for 18 months for an employee earning $95,000 a year, you can work out which option would have been cheaper for the company.

Lessons Learned

There are many lessons to be learned from the Best Theratronics saga.

  1. Employers who believe that employees have a real opportunity to mitigate need to have strong evidence. Employers should consider offering transition counselling. If the issue is going to be litigated, hire a professional recruiter to give expert advice on the realistic opportunities in the marketplace and the time the average employee will need to mitigate damages. A list of job postings collected from a website is simply not enough.
  2. Employers who want to reduce the cash outflow might wish to consider the value of working notice coupled with a strong transition package and a cash incentive to find work quickly. Employees who know they will not get a big package at the end of the working notice period may be motivated to find work quickly in a healthy job market. While there are issues with working notice, it is a technique that is appropriate to consider with long-service employees.
  3. For employees with a defined benefit (DB) plan, calculate the pension risk. It is often far cheaper to continue making contributions for the notice period than to face a judgment for the pension shortfall.
  4. Be realistic. There is no judge who is going to consider 14.4 weeks "reasonable" for an employee with 31 years of service. The Court of Appeal commented dryly that the lawyer for Best Theratronics was unable to provide any authority supporting his contention that 14.4 weeks was reasonable notice in the circumstances.  
  5. If you believe that the employee is simply not going to try to find work and will simply retire early, make sure you have the evidence to support that suspicion.1
  6. Courts are increasingly using summary judgments to resolve matters which previously took a trial. Summary judgment motions can be a powerful took for employees.
  7. Employers should look very carefully at formal offers to settle they receive. Failing to achieve or "beat" the offer means that the loser will often end up paying for two sets of lawyers.


1 In Kimball v. Windsor Raceway Inc., 2014 ONSC 3286, another summary judgment motion, the motions judge commented: "If the dismissed employee has no intention to look for work, but has instead decided to retire, the very purpose for which reasonable notice is required to be given is absent. That is a factor that may well be relevant in assessing what constitutes reasonable notice in this case."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
8 Nov 2016, Seminar, Ottawa, Canada

The prospect of an internal investigation raises many thorny issues. This presentation will canvass some of the potential triggering events, and discuss how to structure an investigation, retain forensic assistance and manage the inevitable ethical issues that will arise.

22 Nov 2016, Seminar, Ottawa, Canada

From the boardroom to the shop floor, effective organizations recognize the value of having a diverse workplace. This presentation will explore effective strategies to promote diversity, defeat bias and encourage a broader community outlook.

7 Dec 2016, Seminar, Ottawa, Canada

Staying local but going global presents its challenges. Gowling WLG lawyers offer an international roundtable on doing business in the U.K., France, Germany, China and Russia. This three-hour session will videoconference in lawyers from around the world to discuss business and intellectual property hurdles.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.