Courts in Ontario continue to grapple with the issue of fair and reasonable notice periods. The COVID-19 pandemic has added an extra layer of complexity when determining reasonable notice. This issue keeps reappearing in recent caselaw because some employers are cutting back staff during, and often as a result of, the pandemic. The question then remains, given that we are in a health crisis and securing new employment is a daunting task during these times, what is fair reasonable notice right now? The next case also considers this question.
Commission Forms a Large Portion of Overall Salary
The former employee was a man in his 50’s who was terminated in March 2020, during the beginning of the pandemic in Ontario. The employee started his employment in 2017, which is when he and the employer entered into an employment agreement. He was employed for a total of almost 28 months.
The employee held the position of business development manager, although he did not manage any employees. His position was in sales. The requirements of his employment involved working largely from home or on the road selling various human resources and health and safety compliance services offered by the employer.
The employee’s base salary was $60,000 per year, but he also earned a commission in addition to his salary. His commission-based compensation for this last full year of employment was over $145,000. The employee had significant responsibilities in developing customer relationships. However, he was not in a supervisory or managerial position per se. The employee was quite experienced in sales generally. He had 14 years’ experience, but only two of those years were related to the area for which he was hired by the employer.
The employee received four weeks of base salary plus all benefits accruing during that four-week period, post-termination. He did not receive any amount in respect of commissions following his termination. The employee brought a motion for summary judgement for wrongful dismissal, seeking six months of reasonable notice.
The Bardal Factors are Considered Again
As in most cases in Ontario that involve reasonable notice, the Superior Court looked at the four Bardal factors. Bardal v. Globe & Mail was a case decided in 1960, and it outlined the factors that must be considered when determining reasonable notice. Those factors are:
- Length of employment;
- Age of employee;
- Whether comparable employment was available;
- Type of employment.
Court Takes Canada Emergency Response Benefit into Account
The court took the above Bardal factors into consideration. The court took into consideration the employee’s age, the relative brevity of his service, and his likely future prospects. Accordingly, it was found that the employee was entitled to three months’ reasonable notice.
However, COVID-19 was not really a consideration when calculating reasonable notice.
The court concluded that the employee’s age and the uncertainties in the job market, at the time of termination, both served to tilt the period of reasonable notice away from the fairly short period of notice that his short period of service might otherwise indicate. However, these factors did not apply to the exclusion of the others.
The court took into consideration one other factor at the request of the employer, which was the Canada Emergency Response Benefit (CERB) that the employee received during the notice period. CERB could not be considered in the same way as Employment Insurance benefits when it came to calculating damages for wrongful dismissal. That was because CERB was an ad hoc program. Neither the employer nor the employee could be said to have paid into the program or “earned” an entitlement over time, beyond their general status as taxpayers of Canada.
The court found that the pandemic had some influence on the employee’s job search. However, the court also found that the impact of the pandemic on the job market, in particular, was uncertain and highly speculative. This uncertainty applied both to the duration and degree at the time that the employee was let go. The court concluded that the principle of reasonable notice was not a guaranteed bridge to alternative employment. Accordingly, the court, in the end, did not really factor COVID-19 into its analysis of reasonable notice.
Some Ontario courts, currently, do not seem to think that COVID-19 should have a high impact on reasonable notice. However, the Ontario courts look at reasonable notice related to wrongful dismissal on a case-by-case basis. That means another court could end up finding that COVID-19 should be considered when calculating what reasonable notice should be. It is a good idea to seek the advice of an employment lawyer to determine proper requirements for reasonable notice.
Contact Toronto Employment Lawyers Grosman Gale Fletcher Hopkins LLP for Assistance with Terminations During COVID-19
For advice on wrongful dismissal disputes, termination letters and other employment or labour law matters, contact the offices of Toronto employment lawyers Grosman Gale Fletcher Hopkins LLP. 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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