Canada: Setting A New Record?: The Ontario Superior Court Would Have Awarded A Minimum Of 36 Months Of Notice Had The Plaintiff Asked For It

"Calculating a length of reasonable notice of dismissal is more of an art than a science. 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, the age, and the availability of similar employment. The unofficial rule of thumb is about one month of notice per year of service, and there is an upper limit of about 24 months."

Every year, law students across Canada would write something similar to the above in their class notes for employment law courses. The author of this article certainly did when he was in law school. In all fairness to the author, throughout the years, the courts in Canada have repeatedly held that the upper limit of 24 months will only be exceeded in truly exceptional cases. Even in cases where longer notice periods were awarded, the appeal courts often lowered them to the 24-month range.

In recent years, however, the courts in Ontario appear to have moved away from slavishly adhering to the 24-month limit.

In Hussain v. Suzuki (2011), 209 A.C.W.S. (3d) 101 the Ontario Superior Court noted that "there is no cap on the amount of reasonable notice of employment termination to which an employee may be entitled" and awarded 25.5 months of notice to an elderly employee with nearly 36 years of service. Similarly, the Ontario Superior Court in Abrahim et al v. Sliwin et al, 2012 ONSC 6295 noted that the Court "fail[s] to see how a cap of 24 months, or indeed any maximum, is appropriate."

Continuing on with the above trend, in the recent decision of Dawe v. Equitable Life Insurance Company, 2018 ONSC 3130, the Ontario Superior Court awarded a 30-month notice period to the Plaintiff who was terminated without cause. Notably, the Court also held that the Court would have awarded a "minimum" of 36 months, thereby implying the Court would have awarded in excess of 36 months had the Plaintiff asked for it.

Facts

At the time of his termination without cause, the Plaintiff was a Senior Vice President of a large insurance company with 37 years of employment. He was 62 years old and earned a base salary of $250,000 with an annual bonus of $380,000 in the year of termination.

On his motion for a summary judgement, the Plaintiff sought damages amounting to 30 months of notice. 

Decision of the Ontario Superior Court

In justifying its departure from the traditionally accepted 24-month limit, the Court appears to have relied on a change in society's attitude regarding retirement:

[31] ... For many years, the usual retirement age was considered to be 65. ... But many were not ready to fully retire. They sought out additional employment or simply continued to work in their existing position. Further, mandatory retirement was abolished in 2006 in Ontario to protect against age discrimination. Many employees have continued past 65. In result, it is important to recognize that each case is unique. Presumptive standards no longer apply. ... [emphasis added]

The Court then accepted the Plaintiff's positions that he had intended to work until at least retirement at age 65 and that there were no comparable opportunities available for him. These two factors appear to have played a significant role in the Court's decision to award 30 months of notice:

[33] Mr. Dawe was 62 at the time his employment was terminated. He had devoted his entire working career to Equitable Life and its predecessor, 37 years in total. Mr. Dawe was a senior vice-president. He was a member of the senior management team. There are no similar employment opportunities. No doubt, Mr. Dawe's age is a significant factor. His mitigation efforts demonstrate the lack of other opportunities.

[34] Reasonable notice is often referred to as the period of time it should reasonably take the terminated employee to find comparable employment. ... When there is no comparable employment available, termination without cause is tantamount to a forced retirement.

[35] ... Mr. Dawe had made no decision as to when retirement would occur. He says he was committed to working at Equitable Life until at least age 65. ... On the evidence, I conclude it is more likely Mr. Dawe would have worked at Equitable Life until age 65. ...

[36] Counsel referred to a number of cases as examples of a reasonable notice period. Such were helpful in my review. Mr. Dawe is at the extreme high end of each of the Bardol [sic] factors. He should have been allowed to retire on his own terms. With no comparable employment opportunities, in particular, I would have felt this case warranted a minimum 36 month notice period.

[37] Mr. Dawe's position of a 30 month notice period is more than reasonable. I conclude he was entitled to that in this case. [emphasis added]

Takeaways for Employers

While it remains to be seen what will happen on appeal, the Dawes case is an example of the recent jurisprudential shifts among the Ontario courts on reasonable notice period.

As a result of this recent trend, employers are likely to face an increased number of Statement of Claims from former employees claiming damages for wrongful dismissal in excess of the previous 24-month cap. As such, the settlement strategies using 24 months as an upper ceiling may no longer be tenable.

Employers can avoid this result by ensuring that their employment contracts contain carefully drafted and enforceable termination provisions, limiting the employees' entitlements to termination and severance pay.

To view the original article click here

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 Mondaq.com.

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

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
 
Email Address
Company Name
Password
Confirm Password
Position
Industry
Mondaq Newsalert
Select Topics
Select Regions
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions