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By MacLeod Law Firm, January 8, 2013 8:46 am

Wrongful Dismissal Update: What is Reasonable Notice of Termination?

In Ontario, an employer generally may terminate an employee at any time by providing the employee with reasonable notice of termination. Or the employer may opt to pay the compensation the employee would have earned during this notice period and remove the employee from the workplace immediately.

There are important exceptions to this general rule which are beyond the scope of this blog. One exception is if an employee has signed an employment contract that contains a termination clause.

When determining the appropriate reasonable notice period in a particular case the courts do not adopt a formula; however the courts do consider a number of factors in every case.

The Four Bardal factors

In determining what constitutes “reasonable notice” of termination, the courts have followed the principles laid out by the Ontario Court of Appeal in a 1960 case called Bardal; namely:

There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the (i) character of the employment, (ii) the length of service of the servant, (iii) the age of the servant and the (iv) availability of similar employment, having regard to the experience, training and qualifications of the servant.

In the last 52 years, the courts have been asked to apply the Bardal factors in thousands of wrongful dismissal actions. As a result, there have been two significant developments in connection with two of these factors.

The Character of Employment factor

In 2011, the Court of Appeal stated that the “character of employment” factor is now largely irrelevant except for a small class of very senior employees.

The Length of Service factor

In 1999, the Ontario Court of Appeal concluded that an employee is NOT entitled to one-month notice of termination for each year of service.

In 2011, this court stated that an employee is NOT limited to 24 months notice of termination.

Lessons to be learned:

1. Although the factors a court will consider when determining reasonable notice have not changed for over 50 years, the courts have interpreted these factors differently over the years.

2. With the elimination of mandatory retirement in Ontario, employers will be forced to start terminating long-service employees as part of corporate down-sizing. Current wrongful dismissal law suggests that a reasonable notice period for these employees is increasing – particularly unskilled employees.

3. It is in an employer’s self-interest to help terminated employees find alternative employment as soon as possible because the courts will deduct income earned during the reasonable notice period from wrongful dismissal damages otherwise payable. This may involve providing former employees with positive references, retraining, and/or outplacement counseling.

If you have any questions about wrongful dismissal law in Ontario please call us at 1–888-640-1728 or email us at inquiry@macleodlawfirm.ca. You can follow us on twitter or subscribe to our employment law blog

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By MacLeod Law Firm, June 17, 2012 6:45 pm

Just Cause For Termination

Just Cause is a legal term that means an employer is justified in terminating an employee and not providing the employee with any notice of termination at common law. Generally, the courts decide what constitutes just cause.

The Core Question

When deciding whether Just Cause exists, the courts in Ontario have stated:

…the core question for determination is whether an employee has engaged in misconduct that is incompatible with the fundamental terms of the employment relationship. The rationale for the standard is that the sanction imposed for misconduct is to be proportional – dismissal is warranted when the misconduct is sufficiently serious that it strikes at the heart of the
employment relationship.

The Three-Step Approach

The Ontario courts have outlined a three-step approach for determining whether misconduct strikes at the heart of the employment relationship.

The first step is determining the nature and extent of the misconduct.

The second step involves considering the surrounding circumstances for both
the employer and the employee.

The third step is determining whether dismissal is warranted as a proportional response; this involves determining whether the misconduct is sufficiently serious so as to give rise to a breakdown in the employment relationship.

Lessons to be learned:

1. It is generally difficult to prove “just cause”. You can limit your organization’s termination pay obligations by including a termination clause in your employment contract.
2. In some cases you can prove “just cause” but your organization may still owe the person notice of termination, and severance pay under the Employment Standards Act.
3.  You can stipulate in your employment contract that specific misconduct (i.e theft) is deemed to be just cause. This is called a specific penalty clause.If you are thinking about terminating an employee and want to discuss your organization’s potential legal liability, or you want to amend your employment contract to enhance your management rights, please email us at inquiry@dougmacleod.com or call us at 1-888-640-1728.