Wrongful Dismissal: The Latest from Ontario’s Court of Appeal

Even though Ontario judges have been using the same test for 55 years to determine how much notice of termination an employee is entitled to receive, employees and employers continue to disagree on an appropriate notice period in individual cases.

Determining Reasonable Notice: the Bardal Factors Rule

An employee is generally entitled to receive reasonable notice of termination unless the employee has signed a contract that provides for a prescribed amount of notice. The calculation of the reasonable notice period is a fact-specific exercise. Most of the relevant factors are set out in a 1960 case called Bardal v Globe & Mail, and focus on the circumstances of the employee: namely, the character of their employment, their length of service, their age, and the availability of similar employment, having regard to their experience, training, and qualifications (the “Bardal Factors”).

When Determining Reasonable Notice, the Employer’s Financial Circumstances Do Not Matter

In Michela v. St. Thomas of Villanova Catholic School, the trial judge reduced the reasonable notice period for three teachers because of the financial circumstances of the employer. The Court of Appeal overturned this decision and concluded: “….an employer’s financial circumstances are not relevant to the determination of reasonable notice in a particular case: they justify neither a reduction in the notice period in bad times nor an increase when times are good.”

The focus of the inquiry is on the circumstances of the employee; not the circumstances of the employer.

For more information on this decision, click here.

The Trial Judge’s Decision on Reasonable Notice is Usually the Final Word

In Partridge v. Botony Dental Corporation, the trial judge concluded that a 7 year employee who was terminated shortly after returning from pregnancy leave was entitled to 12 months’ notice of termination. The employer, a dentist, appealed. The Court of Appeal dismissed the appeal and when doing so concluded a trial judge’s assessment of the reasonable notice period using the Bardal Factors is entitled to considerable deference on appeal.

For more information on this decision, click here.

Alleging But Not Proving Just Cause Can Result in Higher Cost Orders Against the Employer

In the Partridge case, the dentist claimed the employee removed patient records from the workplace and tried to solicit patients for a competing business. The employer’s decision to persist with these just cause allegations at trial resulted in more legal costs being assessed against the dentist. In this regard, the Court of Appeal concluded: “…the appellant’s unproven allegations against the respondent of the most serious kind of employee misconduct also support an award of costs on the substantial indemnity scale.”

Employment Contracts Signed After An Employee Starts Work are Usually not Enforceable Unless the Employee Receives Consideration

In Holland v. Hostopia.com Inc., the Court of Appeal concluded that an employment contract an employee signed 9 months after commencing employment was not enforceable because he received no consideration for giving up his right to “reasonable” notice of termination. A term of the contract stated he was only entitled to the minimum notice of termination provided for under the Employment Standards Act. Signing the contract to keep his job was not legal consideration.

Determining how much notice of termination an employee is entitled to receive is just one issue an employer should consider when deciding whether to terminate the person’s employment. For information on other issues to consider, click here.

For more than 25 years, Doug MacLeod of the MacLeod Law Firm has been advising and representing Ontario employers. If you have any questions, you can contact him at 416 317-9894 or at [email protected]