Earlier this year, we wrote about a case in which a terminated employee argued that he should be entitled to the maximum allowable notice period, based in part on the difficulties he faced in finding new employment due to the COVID-19 pandemic. On the issue, the court stated:
“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.”
More recently, in another Ontario case, the court ruled that a terminated employee was entitled to a longer notice period as a result of the COVID-19 pandemic.
Employee Terminated During COVID-19 Pandemic
The employee started working for the employer, a human resources company, in November 2017 as a business development manager. His position was in sales and involved working largely from home or on the road selling the various human resources and health and safety compliance services offered by the employer to clients.
As a sales position, the employee’s compensation was commission-based. He received a base salary of $60,000 per year, but his compensation for the last full year of his employment in 2019 was $145,186.
The employee was terminated without cause on March 25, 2020. He was then 56 years of age. He was thus employed for a few days shy of 28 months in total.
Upon his termination, the employee was paid four weeks of base salary plus all benefits accruing during that four-week period, but did not receive any amount in respect of commissions following his termination. The employer claimed that he had neither earned nor become entitled to any commissions following the termination of his employment.
The employee secured alternative employment starting October 19, 2020, approximately seven months following his termination with the employer.
The employee brought a motion for summary judgment for wrongful dismissal against the employer.
The court was tasked with making determinations on the following two main issues:
- The period of reasonable notice to be applied to the termination of the employee’s employment; and
- The commissions to which the employee was entitled following termination.
Court Rules in Favour of Employee
On the first issue, the employee submitted that he was entitled to receive at least six months notice of the termination of his employment, while the employer submitted that reasonable notice should be in the range of two to three months.
In its evaluation, the court stated:
“I was asked to make findings about the job market and the possible impact of Covid-19 on [the employee]. I have little doubt that the pandemic has had some influence upon [the employee’s] job search and would have been reasonably expected to do so at the time his employment was terminated in late March 2020. However, it must also be borne in mind that the impact of the pandemic on the economy in general and on the job market, in particular, was highly speculative and uncertain both as to degree and to duration at the time [the employee’s] employment was terminated. The principle of reasonable notice is not a guaranteed bridge to alternative employment in all cases however long it may take even if an assessment of the time reasonably anticipated to be necessary to secure alternative employment is a significant factor in its determination. I must be alert to the dangers of applying hindsight to the measuring of reasonable notice at the time when the decision was made to part ways with the [employee].”
The court then considered the issue of mitigation, by which an employee who has lost their job has an obligation to take reasonable steps to find new, comparable employment to replace their lost job. The court further explained that while reasonable notice is assessed at the time the decision is made, mitigation is assessed in light of the actual efforts of the employee in the actual circumstances he then faced.
In the present case, the employer asked the court to take into account the Canada Emergency Response Benefit (“CERB”) payments received by the employee during the applicable notice period.
The court stated:
“I agree with the [employer] that CERB cannot be considered in precisely the same light as Employment Insurance benefits when it comes to calculating damages for wrongful dismissal. CERB was an ad hoc programme and neither employer nor employee can be said to have paid into the program or “earned” an entitlement over time beyond their general status as taxpayers of Canada. The level of benefit paid (approximately $2,000 per month) was considerably below the base salary previously earned by the [employee] to say nothing of his lost commission income. On balance and on these facts, I am of the view that it would not be equitable to reduce [the employee’s] entitlements to damages from his former employer by the amount of CERB given his limited entitlements from the employer post-termination relative to his actual pre-termination earnings. I decline to do so.”
The court also took into consideration the employee’s age and the uncertainties in the job market at the time of his termination.
Having regard to all of the relevant factors, the court held that three months notice represented a reasonable balancing of the relative brevity of the employee’s service, a consideration of his age and a consideration of his prospects.
As a result, the court concluded that the employee was entitled to receive payment equivalent to the earnings and the value of the benefits that he would have earned had he been given the three month’s working notice, without offset or deduction for CERB payments received.
Finally, on the second issue, the court held that the employee was entitled to receive damages in the amount equal to the commissions on prior sales that would have accrued in respect of prior sales during the three months of working notice that he was entitled to.
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.