It is time to say goodbye to the 24-month upper limit on common law notice periods. The writing has been on the wall since 2015, as we have seen notice awards slowly creeping up from this high-water mark, with the courts providing notice awards of 26 and 27 months in a number of recent cases.[1][2][3]
However, in the recent Superior Court decision, Dawe v Equitable Life Insurance Company, not only did the court award a 30-month notice period but the Honourable Justice presiding over the case, Mr. D.J. Gordon, suggested the potential for even more substantial awards going forward. In rendering his decision, Justice Gordon confirmed that while he believed that the Plaintiff, Michael Dawe’s (“Mr. Dawe”) request for a 30 month notice period was “more than reasonable”, he indicated that he would have taken it one step further as, [he] felt this case warranted a minimum 36 month notice period [emphasis added]” due to the Plaintiff’s exceptional circumstances.
As we discussed in our earlier article regarding how to effectively manage older workers, the greatest challenge employers face when dealing with senior-aged employees is how to carefully and respectfully end the employment relationship. The Ontario Human Rights Code specifically prohibits discrimination in employment based on age, and this includes terminating a worker based on their advanced age, or any associated medical issues. While it is not discriminatory to terminate an older worker, it is discriminatory to terminate them because they are older. The distinction may be a fine one, but it is key to avoiding potential human rights claims.
When courts evaluate the termination of an older employee, the reasonable notice period is determined on a case-by-case basis, using a well-recognized set of factors stemming from the seminal decision in Bardal v Globe and Mail Ltd. (known as the “Bardal Factors“). These Factors include the employee’s: (1) age at the time of termination, (2) length of employment, (3) character or nature of employment, and (4) the availability of similar employment. For older workers, their age and years of service, combined with the inevitable challenges they might have in finding new employment, can lead to generous settlements.
Looking through the lens of Justice Gordon and applying the Bardal Factors to Mr. Dawe’s case, provides considerable insight into how the court ultimately reached their decision.
- Age: Mr. Dawe was 62 years old at the age of termination.
- Length of Service: Mr. Dawe was a long service employee having been employed by the Defendant, The Equitable Life Insurance Company of Canada, for 37 years.
- Character or Nature of Employment: Mr. Dawe had been working in the capacity of Senior Vice-President.
- The Availability of Similar Employment: The court deemed there were no similar employment opportunities available to Mr. Dawe.
As illustrated above, Justice Gordon identified that Mr. Dawe was at the “the extreme high end of each of the Bardal Factors.” In justifying his decision, Justice Gordon paid considerable attention to the final Factor. He indicated that Mr. Dawe’s unsuccessful attempts to mitigate his damages (i.e. secure comparable employment post-termination), clearly demonstrated the lack of opportunities available to Mr. Dawe in the job market. As such and further, taking into consideration Mr. Dawe’s advanced age and years of service, Justice Gordon explained that, “when there is no comparable employment available, termination without cause is tantamount to a forced retirement.”
While this is obviously an important decision with far-reaching consequences, it should be noted that this case likely represents the exception – not the rule, when it comes to determining reasonable notice. This is because Mr. Dawe’s Bardal Factors, including his age and the particular circumstances surrounding his termination, make out a very unique and exceptional case. However, this case further reiterates that terminating older employees can be a very challenging and costly process for employers. This is because this decision signals that notice awards are not capped and as such, employers must be very careful when terminating senior-aged employees.
If your Company would like assistance in smoothly transitioning an older employee from your workplace, or if you are an older worker looking to make that transition, or if feel you may be subject to age discrimination, we are here to help. Contact us today for more information.
Disclaimer: this post is intended for educational and non-commercial purposes only and is not intended to be a source of legal advice to any person in respect of any particular legal issue; it does not create a solicitor-client relationship with any readers. If you have a legal issue or possible legal issue, please contact us.
[1] Keenan v Canac Kitchens Inc. https://www.canlii.org/en/on/onca/doc/2016/2016onca79/2016onca79.html?autocompleteStr=keenan%20v&autocompletePos=2
[2] Dussault v Imperial Oil Limited https://www.canlii.org/en/on/onsc/doc/2018/2018onsc1168/2018onsc1168.html
[3] Markoulakis v. SNC-Lavalin Inc https://www.canlii.org/en/on/onsc/doc/2015/2015onsc1081/2015onsc1081.html?autocompleteStr=Markoulakis%20v.%20SNC-Lavalin%20Inc&autocompletePos=1