Implications of COVID-19 on Notice Awards
Ontario Superior Court of Justice Continues to Consider the Implications of COVID-19 on Notice Awards
In its recently released decision Iriotakis v Peninsula Employment Services Limited (2021 ONSC 998), the Ontario Superior Court of Justice addressed a number of pertinent issues concerning employees who were terminated during the pandemic.
Most significantly, the decision provided insight on how the economic conditions arising from the pandemic will be considered in determining the appropriate reasonable notice period for wrongfully dismissed employees. In deciding the appropriate notice period, courts will consider a number of factors known as Bardal factors, including but not limited to, the employee’s age, length of service, position, and the availability of comparable employment with regard to the employee’s education, training and qualifications. Within this analysis, courts have previously held that employees terminated during difficult economic climates are entitled to lengthier notice periods in recognition of the increased difficulty of finding employment during such times.
Given that the fifty-six (56) year-old Business Development Manager who was employed for twenty-28 months had been terminated on March 25, 2020, at the outset of the pandemic, Justice Dunphy was tasked with considering how the pandemic would fit into this analysis. While Justice Dunphy did recognize that the pandemic and the ensuing uncertainty in the job market would lead to a lengthier notice period, he ultimately determined that it was not a significant factor in this case.
In the decision, Justice Dunphy determined that notice is to be decided based upon circumstances at the time of the termination, and commented that the impact of the pandemic on the job market was “highly speculative and uncertain both as to degree and to duration at the time Mr. Iriotakis’ employment was terminated”. As such, he cautioned against applying hindsight and the knowledge we now have regarding the impact of the pandemic in assessing reasonable notice. Ultimately, he found a three (3) month notice period reasonable given all circumstances.
The Court was also tasked with assessing whether payments made under the Canada Emergency Response Benefit (“CERB”) should be deducted from the damages award. The Court distinguished CERB from EI benefits on the basis that the employee did not pay into CERB in any capacity beyond that of a general taxpayer, and held that it would be inequitable on the specific facts of the case to deduct Mr. Iriotakis’ CERB payments from his notice award, given that the CERB payments of $2,000 per month were far less than his income ($145,186.30 including commissions).
This decision comes shortly after Yee v Hudson’s Bay, 2021 ONSC 38 (discussed here), and adds to the growing case law regarding wrongful terminations during the pandemic. In Yee, the Court distinguished between pre and post pandemic terminations and held that because the employee had been terminated prior to the pandemic, it was not an appropriate consideration when determining the notice period award. In the present case, employee was terminated at the very beginning of the pandemic, and still the Court declined to assign the pandemic any significant weight in assessing notice. Consequently, though the Superior Court has recognized the impact of the pandemic on the job market, it remains unclear at which point and to what degree it will lengthen notice periods and in what circumstances, if any, will CERB payments be deducted from notice awards.
It is evident that this is an area which will continue to evolve in the coming months, and it remains to be seen how terminations which occurred later in the pandemic will be analyzed. Should you like more information on how this case impacts you or your organization, please reach out to us for assistance at [email protected] or complete our contact form here.