Ontario’s highest court released a decision two weeks ago that will have a significant impact on the awards of notice in termination of employment claims. This case will have no effect upon incremental awards of aggravated or punitive damages for unfair conduct, yet it no doubt will be a bell weather for high side severance for many years to come, barring any further word on this topic from the country’s highest court.
Notice awards have seen a dynamic history since the landmark 1960 case in which the notice period awarded was 12 months. Prior to this case, the high water mark had been seen as six months. Decisions have crept forward since this 1960 case written by then Chief Justice McRuer and several have even exceeded the generally considered high side of 24 months, typically on the basis of certain “exceptional circumstances”.
Facts of this Case
The plaintiff, 62 years old, was a senior vice president with a large insurer, with 37 years of service when he was fired without cause.
The judge on first instance found that 30 months was the right award, even in the absence of exceptional facts. This award was based on a broad view of societal considerations, including the real world view of retirement factors.
The Court of Appeal reduced this award to 24 months, the sum that had been offered on termination. The Appeals Court also found that the prior decision should not have departed from the general rule that 24 months should cap the award, absent exceptional facts. The “retirement” factor was seen as irrelevant by the Court of Appeal.
Critically, the court tacitly acknowledged that the traditional factors of a long term of service, age, seniority of the position held and compensation levels were not collectively factors to hit the bell of “exceptional” to cause an increment of the notice sum over and above the high side cap.
Employers will be comforted by the accepted notion that the high side award with respect to severance will likely be capped at 24 months.
Employees’ Take Away
Similarly, this apparent certainty will assist employees with respect to what is attainable, which hopefully will allow for reasoned expectations of a fair result.
This case also considered important contractual issues dealing with bonus issues on termination, which will be considered in a further post. This issue was very important for the plaintiff, as failing such an additional sum being awarded, he would likely have faced a high costs obligation to his past employer.
It is not presently known whether the plaintiff will seek “leave” or permission from the Supreme Court of Canada for further review of this decision.
Get Advice and Know Your Rights
If you have questions about this issue or any employment question, 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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