As wrongful dismissal actions progress through the courts, employers and employees alike are watching with keen interest to see how courts will consider the impact of the pandemic on the amount of notice to be provided to employees in ongoing disputes with their former employers. This article follows our previous update about a recent Ontario case, which gave some hope to employers who terminated employees before the pandemic. A new Ontario case has weighed in on the impact on the amount of notice for employees terminated during the early days of the pandemic.
What Happened?
The employee was hired in November 2017 on an indefinite basis. He held the title of Business Development Manager at the time of his termination on March 25, 2020 – just one week after the Ontario government declared a state of emergency because of the COVID-19 pandemic. The employee was around 56 years of age, had been employed for about two years and four months, and earned approximately $145,000 between base salary and commissions. The employee was dismissed without cause and given four weeks' salary and benefits.
At trial, the employee sought at least five months' notice. The employer argued that two to three months' notice was the appropriate period. The employee argued that the court should account for the effect of the pandemic in finding comparable employment and this should favour a notice period at the highest end of the common law range.
What Did the Court Say?
The court said the appropriate reasonable notice period was three months. In addressing the pandemic, the court noted that “the impact of the pandemic on the economy in general and on the job market, in particular, was highly speculative and uncertain as to degree and to duration” at the time of the employee's dismissal. The court also noted that it must be on guard against applying hindsight – alluding to the principle that the amount of notice is to be determined by the circumstances existing at the time of termination.
Ultimately, the court stated that a combination of the employee's age and the uncertainties in the job market at the time of dismissal tilted the period of reasonable notice away from the otherwise fairly short period of notice that might otherwise have been warranted. The court did not explain how much an employee's age and the pandemic influenced the period of notice awarded. However, the court clearly cautioned that the factors of age and the job market “did not apply to the exclusion of others”. The court called instead for a balanced approach.
Take Away for Employers
This decision will likely be relied on by both employers and employees in disputes regarding claims from employees terminated during the COVID-19 pandemic. Employees will point to the court's reasoning that the pandemic increased the period of notice and employers will point to the court's cautions and calls for a balanced approach. In the end, and until further clarity is provided by the courts, it may still be difficult for employers to assess how great, if any, the impact of the pandemic will have on notice periods awarded to employees in ongoing employment disputes.
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