If your employment is terminated after more than 30 years service, then you may be entitled to at least 30 months’ termination pay. This result happened in a recent case.
Mr. Dawe was terminated without just cause after 37 years service when he was 62 years old. As is normally the case, his employer, Equitable Life Insurance, provided him with no notice of termination.
The main issue to decide in this case is how much notice of termination should Equitable Life have given Mr. Dawe.
When determining the appropriate notice period, the judge considered the same factors that judges have been considering since 1960 namely:
- age of the employee (62);
- the character or nature of the employment (Senior Vice-President);
- the length of service to the employer (37 years); and
- the availability of similar employment, having regard to the experience, training and qualifications of the employee (no similar employment opportunities).
With respect to the last factor, the judge stated: “When there is no comparable employment available, termination without cause is tantamount to a forced retirement.”
With respect to Mr. Dawe’s retirement plans, the judge concluded: “Mr. Dawe had commenced the process of retirement planning, not uncommon at his age and logical given the nature and focus of the life insurance industry. Mr. Dawe had made no decision as to when retirement would occur. He says he was committed to working at Equitable Life until at least age 65. Retirement, if voluntary, may have occurred sooner or later. On the evidence, I conclude it is more likely Mr. Dawe would have worked at Equitable Life until age 65.”
Mr. Dawe requested a 30 month notice period and the judge concluded that “Mr. Dawe’s position of a 30 month notice period is more than reasonable.”
Lessons to be Learned
- A 24-month settlement offer may not be fair. In the past, most judges have been reluctant to award a notice period above 24 months. In recent years, however, some judges have been ordering notice periods in excess of 24 months. There are awards at 26 months, 28 months and in this case, 30 months. In fact, the judge in this case the judge stated that he thought 36 months was appropriate but awarded 30 months’ termination pay because this is the notice period that Mr. Dawes requested.
- If you are an employee in your 60s with more than 10 years service, then you may be to more than one month termination pay for each year of service.
- If an employer approaches you about your long term plans, it may be trying to lock you into a retirement date. You are not required to retire so think twice before answering this question and obtain employment advice if you think you need it.
NOTE: The Ontario Court of Appeal (Dawe v. The Equitable Life Insurance Company of Canada, 2019 ONCA 512) overturned the trial judge’s decision and reduced the reasonable notice period from 30 months to 24 months.
For almost 30 years, Doug MacLeod of the MacLeod Law Firm has been advising employees on all aspects of the employment relationship. If you have any questions, you can contact him directly at 416-317-9894 or at [email protected]