Ontario employment law starts from a basic proposition, one which is implied into every employment relationship, absent a written agreement to the contrary. That implied term forms the foundation of every wrongful dismissal case and requires the employer, in the absence of just cause, to provide advance notice of termination. It is this simple concept that has led to literally thousands of cases in our courts.
One would expect that in the case of an employer giving 11 months advance notice of termination in writing, that such action would eliminate or dramatically reduce many claims of this nature. In one particular case, that expectation was tested in court.
Ontario’s Employment Standards Act (“the ESA“) contains a provision which deals with mass termination where the number of persons terminated exceeds certain parameters, ranging from 50 to 300. The ESA requires that a specific form of notice (Form 1) be given to the Minister of Labour and that this same notice be posted in the workplace in cases where a large number of employees are terminated at the same time.
One purpose of this notice is to put in place certain re-employment programs that are offered by the Ministry to the affected employees, including financial assistance for retraining.
Ontario Court Rules on the Interplay between Mass Termination and Common Law
This issue of a mass termination was the subject of a recent Ontario Superior Court decision. 77 employees were set to be terminated due to a plant closure. They were given written notice of termination on April 17, 2014, some 11 months in advance of the termination date which was set for March 27, 2015. However, the Form 1 was not sent to the Minister of Labour until May 12, 2015. The issue to be determined at trial was when did the time clock start for the working notice period?
The Court concluded that there could not be legal termination to start the notice period until the moment at which the Form 1 had been submitted to the Ministry and posted in the workplace. As a consequence of this determination, the prior working notice of 11 months was of no legal effect. This meant that all claims for termination and resultant income loss, both by statute and by common law commenced on May 12, 2015, the date on which official notice was given to the Ministry.
In reaching this decision, the Court relied upon the foundational principles of employment law which reflect the power imbalance in the relationship between employee and employer and hence the need to interpret protective legislation in a remedial and liberal fashion.
The employer appealed this finding, and the Ontario Court of Appeal (ONCA) sided with the employer on this issue. The ONCA held that the relevant provision of the ESA did not require that Form 1 be submitted when the written notice was provided to the employees, but rather by the start of the statutory notice period of 8 weeks:
I agree that the motion judge erred in deciding the Form 1 issue. CTS was only required to serve and post the Form 1 information at the beginning of May 2015. Since CTS was 12 days late in serving and posting the Form 1 notice, class members are entitled to a further 12 days’ pay in lieu of notice.
The judicial history of this case clearly demonstrates that competent and reliable legal advice is paramount for any employer tasked with conducting a mass termination. No employer should consider walking this tightrope alone.
What Does All This Mean to The Employee?
Employees should always seek experienced legal advice when facing termination. It is always advisable that employees have a lawyer carefully review any termination or severance package offered in order to ensure that the terms are fair and reasonable in the circumstances.
Get Advice Before You Act
If you have questions about this issue or any employment question, contact the offices of Toronto employment lawyers Grosman Gale Fletcher Hopkins. We regularly advise workplace parties on a wide range of legal workplace issues. Contact us online or by phone at 416-364-9599 to schedule a consultation.
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