In a recent Ontario case, an employee argued that he should be entitled to the maximum allowable notice period, in part based on the difficulties he faced in finding new employment due to the COVID-19 pandemic.
Employee Terminated After 11 Years of Employment
The employee began working for the employer on February 11, 2008 and was terminated on August 28, 2019. At the time of termination, the employee was 62 years old.
The employee’s base salary was $162,353. Among other benefits, he was also entitled to an Annual Incentive Plan or bonus based on the company sales and objectives. Under the plan, the employee had received a bonus of $23,537 in 2018. His potential payout in 2019 had been $28,411.
Upon termination, the employee was paid 11 months of salary and benefits. The employer also provided three months relocation-counselling. The total value of the amounts paid by the employer upon termination was $159,907.
The employee filed a claim against the employer seeking 18 months of reasonable notice. He also sought payment for the bonus he would have received for 2019 and benefits, as well as claiming bad faith, moral and/or punitive damages.
In the employee’s claim, a notable argument was raised relating to the COVID-19 pandemic.
At the court hearing held in December 2020, the employee argued that the court should take into account the recent COVID pandemic and the resulting significant increased difficulty he had experienced in obtaining comparable employment. At the time of the hearing, the employee had submitted approximately 90 employment applications seeking a new job, but had not yet found one. The employee’s argument was that the court should therefore use this evidence as a basis for awarding a notice period at the highest possible end of the appropriate range.
In support of the employee’s position, he submitted an extract of a previous case in which the judge had stated: “Economic factors such as a downturn in the economy or in a particular industry or sector of the economy that indicate that an employee may have difficulty finding another position may justify a longer notice period”.
In response, the employer claimed that the large number of job applications sent out by the employee for comparable positions should be held as evidence that employment was in fact available despite the pandemic.
Court Rules in Favour of Employee
While the court recognized the employee’s argument regarding the consideration of economic factors in coming to a determination, it also cited an Ontario Court of Appeal decision in which the Court stated: “Notice is to be determined by the circumstances existing at the time of termination and not by the amount of time that it takes the employee to find employment”.
Ultimately, the court concluded:
“It seems clear terminations which occurred before the COVID pandemic and its effect on employment opportunities should not attract the same consideration as termination after the beginning of the COVID pandemic and its negative effect on finding comparable employment.”
Taking into consideration the entire factual matrix of the employee’s circumstance, including the pandemic, the court held that the employee was entitled to 16 months reasonable notice.
The court further held that, pursuant to the principles set out in the recent Supreme Court of Canada decision Matthews v. Ocean Nutrition Canada, the employee was entitled to the bonus he would have received for 2019. Following the same principle, the employee was awarded his group benefits and pension contributions. Finally, the court rejected the employee’s claim for bad faith, moral and/or punitive damages, finding that the employer’s conduct fell short of what is required for such an award.
In the result, the employee was awarded $255,576, from which the $159,907 already paid out would be deducted, plus pre-judgment interest.
If you have been terminated, you may be tempted to simply sign the severance package you have been provided with so that you can sever ties with your former employer and begin to move forward. While this may seem enticing, it is not the best course of action. Most employees do not realize how much they are entitled to upon termination and, without obtaining knowledgeable advice, often end up accepting significantly less than they should receive.
If you have been fired, one of the first phone calls you should make is to a wrongful dismissal lawyer. The highly experienced Mississauga employment lawyers at Bader Law have been advising employees on termination, severance packages, and wrongful dismissal for several years. We can review any termination letter or package you have been provided with, negotiate with your employer on your behalf, and file a wrongful dismissal claim where necessary. With our lawyers on your side, you can ensure you are getting the maximum amount that you are entitled to.
Contact a knowledgeable employment lawyer as soon as possible. At Bader Law, our lawyers will counsel you on your rights, advise you on your options, help you create a plan for moving forward, and secure fair compensation for the wrongful termination of your employment. Contact us online or at (289) 652-9092 to learn how we can help.