The recent decision of Michela v. St. Thomas of Villanova
Catholic School (Michela) by the Ontario Court of
Appeal clarified that an employer's financial circumstances are
not a relevant consideration in determining the period of
reasonable notice to which a wrongfully dismissed employee is
This was a wrongful dismissal action brought by three (3)
teachers previously employed by St. Thomas of Villanova Catholic
School (the School) for periods ranging from eight (8) to twelve
(12) years. Each was notified of their termination at the end of
the school year in June. Each sought a reasonable notice period of
12 months. The Court of Appeal decision reversed a summary judgment
in which the motion judge limited the reasonable notice period to
six (6) months due in large part to the financial circumstances of
On a motion for summary judgment, the motion judge focused
primarily on the effect of a lengthy notice period on the employer,
finding that the school would be unable to reduce its financial
deficit if a twelve (12) month notice period was determined to be
reasonable. In addition, the motion judge reasoned that a period of
six (6) months would end at the Christmas season, a point at which
the motion judge presumed that teaching positions may become
available. From the motion judge's perspective, this supposed
availability of alternative positions further supported the reduced
reasonable notice period. The teachers appealed the decision, and
each sought a reasonable notice period of twelve (12) months.
In finding in favour of the teachers, the Court of Appeal
confirmed the factors which are to be considered when calculating
notice periods such as character of employment, length of service,
age, and availability of similar employment (Bardal Factors)
– having regard to the employee's experience, training
The Court highlighted that the Bardal Factors focus on the
circumstances of the employee rather than those of the employer.
The Court of Appeal further noted that the motion judge had
incorrectly considered an employer's financial circumstances as
part of the "character of employment" in reasoning that a
private school could not provide the same security of employment as
a more established, better-funded institution. Instead, the Court
of Appeal clarified that the "character of employment"
factor speaks to the level of responsibility and expertise required
for the position, and may be of declining importance in comparison
to the other Bardal Factors.
The Court explained that while general economic conditions might
affect the availability of alternative employment, such external
factors should not unreasonably increase the notice period, nor
should they serve to decrease the notice required on account of the
employer's financial hardship.
With regard to the availability of alternative teaching
positions that might become available six (6) months from the date
of termination, the Court of Appeal found that the motion
judge's reasoning was purely speculative and did not support a
reduced notice period.
The Michela decision removes any uncertainty in respect
of the notion that an employer's obligation to provide
reasonable notice or pay in lieu thereof is lessened in times of
financial difficulty. The Court of Appeal for Ontario has now been
totally clear that financial hardship of an employer is not a
relevant consideration in determining the period of reasonable
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