As we have written before, a wrongful dismissal occurs when an employee is terminated without just cause and the employer does not provide adequate notice of termination. An employee can claim damages equal to the remuneration the employee would have earned during the applicable notice period. For a long time, 24 months was recognised as the informal ceiling for notice periods. However, in recent years, judges have been willing to award notice periods longer than 24 months, particularly when older employees are involved.
In Dawe v Equitable Life Insurance Company, Mr. Dawe was terminated from his position as Senior Vice President of the Equitable Life Insurance Company after 37 years of service for both Equitable Life and its predecessor company. Mr. Dawe was 62 years old at the time of his termination, earned a base salary of $249,000 and a STIP and LTIP bonus totalling $379,585. Mr. Dawe sued Equitable Life for wrongful dismissal.
The judge commented that although Mr. Dawe was possibly close to retirement age, he should have been allowed to retire on his own terms.
The judge accepted there were no comparable jobs available to him, and noted that Mr. Dawe had dedicated the entirety of his working life to Equitable Life. Being terminated at age 62 was tantamount to being forced to retire. The judge awarded 30 months’ notice, which is what Mr. Dawe had requested. However, the judge commented that he would have awarded him 36 months.
Lesson to be Learned
Even if an employee is close to retirement and has commenced planning their retirement, unilaterally accelerating that process can prove to be an expensive decision, particularly if the employee can show that because of their age, there are no comparable positions.
Due to the length of notice in this case, and the judge’s comment about 36 months being a reasonable notice period in the circumstances, we anticipate wrongful dismissal damages claimed will increase for long term employees who are over 60 years old.
If you are considering terminating a long service employee, it is important to consult an employment lawyer so you can obtain an assessment of your potential legal liability.
If you would like to speak to a lawyer at MacLeod Law Firm, you can reach us at [email protected] or by phone at 647-204-8107.
A recent case, Headley v. City of Toronto, 2019 ONSC 4496, shows that alleging just cause for termination for a long-service employee can be a risky and costly strategy.
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