Canada: Six Months For Six Months: Is One Month's Notice Per One Month Of Employment Reasonable?

The past few years have seen a wave of Canadian court awards involving significant reasonable notice periods for short service employees, and the recent B.C. case of Greenlees v. Starline Windows Ltd, 2018 BCSC 1457 is a prime example.

In Greenlees, the employee sued his former employer Starline Windows Ltd. ("Starline") for wrongful dismissal.  At the trial, there was no issue of just cause and the employer did not argue that the employee, Mr. Greenlees, had failed to mitigate.  The only live issue at trial was thus Mr. Greenlees' reasonable notice entitlement.  As an aside, the case proceeded by way of summary trial, meaning that all evidence was adduced by way of affidavit with no oral testimony.  This is a more expedient and cost-effective litigation process for cases which do not involve disputed facts, e.g. straightforward wrongful dismissal claims.

Mr. Greenlees was 43 years old at the time of his employment with Starline and had a history of working in sales throughout the Lower Mainland. Starline was an active member of the construction industry and hired Mr. Greenlees as a sales professional.  There was a written agreement governing the employment relationship, but it did not contain any language limiting Mr. Greenlees' entitlements upon termination of employment.

Mr. Greenlees was employed by Starline in this role from March 2017 until September 2017, a period of six months.  The employment relationship quickly soured due to different expectations around the work and Mr. Greenlees' remuneration.  As such, Mr. Greenlees was dismissed on a "without cause" basis.  On termination, Starline paid Mr. Greenlees an amount equivalent to one week's income in lieu of notice of termination, and an amount in lieu of anticipated commissions. Starline did not provide a letter of reference to aid Mr. Greenlees in finding alternative employment, and this ended up proving costly at trial.

Seven months after his dismissal, Mr. Greenlees found a new position with a building products company with a salary of $70,000, plus commission.  As noted above, his efforts to find other employment were not challenged at trial.

At trial, the judge had to consider what Mr. Greenlees' reasonable notice period should be.  Interestingly, the parties agreed that for employees in Mr.  Greenlees' situation, i.e. "short term employees in their 30s or 40s, whose function is significant for their employer but not one of senior management", a notice period of 2 to 3 months is the "starting point".  The judge accepted this proposition and moved to consider whether any factors existed which warranted increasing the notice period from this starting point.

The Court considered Mr. Greenlees' difficulty in finding a job and inferred that there was limited availability of other employment.  The judge was also critical of Starline's decision not to provide Mr. Greenlees with a letter of reference, which the judge considered to be a factor in Mr. Greenlees' difficulties in finding alternative employment.  As well, the judge commented that some inducements by Starline during the hiring process were a factor, albeit a less significant one, in determining the applicable reasonable notice period.

Accordingly, the judge awarded Mr. Greenlees a notice period of six months.  This may be the first time an employee's reasonable notice period was equal to the amount of time worked by the employee.

Lessons for Employers

  • You can avoid the debate about the appropriate reasonable notice period by simply ensuring that your employment contract includes a well-drafted termination clause. Such a clause can limit employees to statutory minimum entitlements, or establish other predetermined entitlements.  That way, both parties have certainty around this important issue.  In Greenlees, the absence of such a clause resulted in a dispute about the appropriate notice period and, ultimately, an award of six months of notice rather than the statutory entitlement of one week.
  • Where possible, provide dismissed employees with letters of reference. This will assist in their job search efforts, and the sooner they find alternative work, the less potential liability an employer will carry in a wrongful dismissal claim.  Equally as important, a court may hold the absence of a reference letter against an employer if the employee has difficulty finding a job, as was the case in Greenlees. 

Previously printed in the LexisNexis Labour Notes Newsletter.

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.

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