Wednesday, 16 May 2012

Smashing the Reasonable Notice Ceiling

It is widely, but wrongly, assumed that common law reasonable notice of termination never exceeds 24 months. Yet Canadian courts have smashed the 24-month "ceiling" on  several occasions.

For example, last year an Ontario court awarded a 26-month notice period to a 65-year old assistant warehouse supervisor who had been employed for 35 years [1]. A decade earlier, the Ontario Court of Appeal upheld a trial decision of 27 months for a 60-year old senior manager of 35 years [2].

In 2003 a New Brunswick court went further when it awarded 28 months of salary to a pair of 31-year papermill supervisors ages 51 and 52 [3].  Seven years earlier, that province's highest court ruled that a 57-year old executive sports editor employed for 36 years was also entitled to 28 months [4]. 

It is important to note that none of these decisions involved a finding of bad faith or other objectionable behaviour on the part of the employer.[5]

The morale: Whether you are firing or have been fired, don't make assumptions. Instead, call an employment lawyer.
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[1] Hussain v. Suzuki Canada Ltd., 2011 CarswellOnt 12251
[2] Cowper v. Atomic Energy of Canada Ltd., 2000 CarswellOnt 1745
[3] Walsh v. UPM-Kymmene Mirimachi Inc., 2002 CarswellNB 533 (Q.B.), affd. [2003] N.B.J. No. 166 (C.A.)
[4] Donovan v. New Brunswick Publishing Co., 1996 CarswellNB 601 (C.A.)
[5] The Supreme Court of Canada ended the practice of extending notice periods to punish bad faith on the part of an employer, commonly known as a "Wallace bump-up". See Honda Canada Inc. v. Keays, [2008] 2 S.C.R. 362.