Canada: Employee Termination: How Much Notice Is Enough?

Last Updated: April 18 2019
Article by Sarah Hentschel

When it comes to employee terminations, it's important that employers fully understand their rights and responsibilities. Missteps in the termination process can lead to uncertainty and confusion, or worse, litigation and a big payout to the employee for wrongful termination. When it comes to termination without cause, employer exposure to liability can be protected by the simple inclusion of a notice provision in the employment contract.

While many believe that the minimum standards set out in the Employment Standards Act of British Columbia will apply unless otherwise stated, this is not the case. If you do not have a contract which clearly states that the employer will never pay more than the minimum standards set out in the Employment Standards Act of British Columbia, you run the risk of incurring large and unpredictable liabilities upon termination.

A recent employment law decision from the Supreme Court of British Columbia highlights the importance of having written agreements between employers and employees which address termination pay or "notice" of termination.

Greenlees v. Starline Windows Ltd., 2018 BCSC 1457

In this case, the employer (Starline) did have a written contract in place, however, the contract did not contain a notice provision, meaning that there was no reference to an agreed upon notice period. In his decision, Justice Gomery found that a 43 year old salesman, Mr. Greenlees, who had only been employed with Starline for six months, was entitled to six months of termination pay or "notice" upon his termination.

Starline had provided the employee with one week of notice when they terminated Mr. Greenlees (without cause), providing the minimum amount mandated by Section 63 of the Employment Standards Act of British Columbia (the "Act") which includes:

After 3 months – 1 week
After 1 completed year – 2 weeks
After 3 completed years – 3 weeks
After 4 completed years – 4 weeks
After 5 completed years – 5 weeks
After 6 completed years – 6 weeks
After 7 completed years – 7 weeks
After 8 completed years – 8 weeks

(The Act does not require payments beyond 8 weeks for any of length of service greater than 8 years.)

Because Starline had no contractual provision limiting Mr. Greenless' entitlement to the Act's Section 63 notice, Mr. Greenless was entitled to claim notice pursuant to the 'common law', an approach that can result in very large and unpredictable amounts of notice being awarded to a terminated employee.

Extenuating Factors

Some of the standard factors the court will assess, when considering appropriate notice of termination include:

  • the age of the employee;
  • the ease with which they will be able to find new employment (both due to their credentials and due to the availability of comparable employment in the marketplace);
  • their total length of service with the employer; and
  • their level of responsibility.

Additionally, if the employee was induced away from secure previous employment, and then terminated very quickly by the new employer, the courts will often add significant penalties in notice payments.

Key Takeaways from Greenless:

1. Short term employees

The court affirmed the approach taken in previous cases that short term employees (employees who have worked less than a year), who are in their 30s and 40s, and whose function is important to the employer but not one of senior management, can expect a "starting point" of 2-3 months of notice (absent a contract that stipulates otherwise).

2. Availability of Work

The court gave significant weight to the fact that Mr. Greenless made reasonable efforts to find new reasonable employment and failed to secure a new position until 7 months post termination. The court noted that the employer did not provide a reference letter to Mr. Greenlees. Although the court made no direct finding with respect to the lack of a reference letter, one is left with the impression (since it is noted twice) that Starline's failure to provide one was a contributing factor to the award made against them.

3. Reasonable Expectations and Inducement

Having induced an employee to leave their previous job for a new position on the basis of "...forecasts of income and favourable future prospects..." could result in the requirement for a longer notice period. (Greenlees, pg. 14, para 51) In other words, if you are induced to leave a secure job for a new position, and then are terminated without cause by that new company, a longer notice period might be considered.

In determining whether inducement was present, the court in Greenless stated that it would be important to assess the reasonable expectations of the parties during the discussions which led to the employment. In this case they were deemed reasonable, and therefore warranted increased notice of termination.

[51] In my opinion, the discussions between Mr. Greenlees and Mr. Parkinson gave rise to reasonable expectations on the part of Mr. Greenlees. His discussion with Mr. Parkinson was not focused on job security, as in Pollock. I have found, however, that forecasts of income and favorable future prospects were discussed. This is not a case in which the employer and prospective employee were equally eager at the outset. Mr. Greenlees had to be persuaded. He recognized that the forecasts were contingent, that they did not amount to promises or guarantees.

Nevertheless, they were material and important to Mr. Greenlees' decision. By them, he was persuaded to take the job. I conclude that Mr. Parkinson's statements to Mr. Greenlees carry some weight as inducements affecting the notice period.

[52] I should add that, while I believe there was inducement, this case is close to the line. While some increase in the notice period is justified by this consideration, I give it only modest weight.

4. The Bait and Switch

Mr. Greenless argued that the notice period should be extended because of a "bait and switch" by the employer which, it was argued, was egregious and a factor to be considered.

Starline allegedly promised Mr. Greenlees he would be working on new construction sales projects with Starline. However, after commencing work with Starline, Mr. Greenlees was placed on renovation construction projects (apparently known to be a lower commission income earner) and it was argued this did not enable him to earn up to the promised income of $100,000 annually.

While the court found that this issue had no merit as the case was presented on a contractual basis, not on a misrepresentations basis, one can only assume from these statements that the pleadings were deficient in not presenting a claim in bad faith, or a claim for negligent misrepresentation, and that an alternate approach to this argument may have extended the notice period further. In other words, had Greenless been able to argue that a 'bait and switch' had occurred, this would have extended the required notice period.

Ultimately, despite being employed for only six months, Mr. Greenlees asked the court for six months of notice and was awarded six months.

Summary

This is a costly outcome for what was a preventable situation. Had Starline written into the employment contract the amount of notice which would be provided upon termination, limiting it to maximum amounts of notice provide for in the Act, they could have limited their exposure to liability and provided increased certainty to the parties involved.

This case should be a cautionary tale for employers. Never assume that the minimum guidelines will be applicable when terminating an employee without cause. Instead, protect yourself with the inclusion of a provision for notice in all of your employment contracts.

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
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please 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