On March 7, 2018, a decision was released by the Ontario Superior Court of Justice in which the court awarded a terminated employee damages equal to 18 months’ pay although the employee had only been employed for a little over 6 years. By all Canadian standards, this case demonstrates an extremely high notice requirement for a fairly short-term employee.
What is Considered Reasonable Notice?
In Hale v. Innova Medical Ophthalmics Inc., 2018 ONSC 1551, the plaintiff, who was 59-years-old at the time of his termination, was the president of the defendant company, Innova Medical Ophthalmics. The plaintiff had held this position for a period of 6 years and 8 months. The plaintiff earned $300,000.00 per year and although he was on a fixed term contract with the defendant which had expired in December 2010, it had never been renewed and the plaintiff’s employment continued uninterrupted until July 31, 2014. Because the fixed term contract had not been properly renewed, the plaintiff took the position that he was for an indefinite term and therefore entitled to reasonable notice.
While there was an allegation of dishonesty as against the plaintiff in the discharge of his employment made by the defendant, the court ultimately found that the defendant had not satisfied the court that there was “just cause” for the termination of the plaintiff. Accordingly, the plaintiff was entitled to reasonable notice of the termination.
Bardal v. Globe and Mail Ltd
Relying on the Bardal Factors as outlined in Bardal v. Globe and Mail Ltd. (1960), 24 D.L.R. (2d) 140 (Ont. H.C.), including:
- The character of the employment;
- The length of service;
- The age of the employee; and
- The availability of alternative employment
Justice Carole Brown held:
 On the basis of my findings, as set forth above, the plaintiff is entitled to reasonable notice or payment in lieu thereof. Based on the Bardal factors, I am of the view that he is entitled to notice in the amount of 18 months. He was 59 years old when he was terminated from his position as President of the defendant company, with which he had worked for 6 years and 8 months. He made concerted efforts to find a comparable position but remained unemployed for 30 months. It was his position that the task of finding new employment was made much more difficult by the nature of the termination and the fact that no references were provided by the defendant. I am satisfied based on the evidence presented that he made significant and reasonable attempts to mitigate his damages.
Ability to Secure Alternative Employment
However, Justice Brown also took into consideration the fact that the plaintiff had been unable to secure alternative employment for 30 months after termination and the fact that the defendant’s unfounded allegations of dishonesty had impeded the plaintiff’s ability to secure alternative employment.
While this case demonstrates that older, high-level employees who are earning considerable annual salaries are entitled to greater notice on termination, it is an outlier decision as the notice awarded was far in excess of the norm in other Canadian decisions, which would likely have awarded damages in the area of 10 – 12 months for this employee based on the Bardal Factors alone.
While the court did not specifically quantify the number of damages that could be attributed to the allegations of dishonesty and the time it took the plaintiff to secure alternative employment, it is clear that these factors went toward enhancing the damages awarded in this case.
However, employers should be aware and cautious in regard to this decision, particularly when determining reasonable notice for an older high-level employee. The standards of what constitutes reasonable notice may not be sufficient in all circumstances. With or without allegations of dishonesty, the case demonstrates that an older, high-level employee earning significant remuneration is entitled to a much higher notice than one might expect in similar scenarios involving younger and lower-level employees.
Scott Chambers is an employment and human resources lawyer at Doak Shirreff Lawyers LLP. Scott can be reached at [email protected] or 250-979-2527. You can also follow Scott on Twitter at @DSEmploymentLaw and on Linkedin at www.linkedin.com/in/scottdchambers