In a recent Ontario court case, George v. Laurentian Bank Securities Inc., an employee, who was terminated within five months of being hired, sought a year of reasonable notice. The court rejected his request. To understand why, it might be helpful to delve more deeply into Ontario’s reasonable notice requirements.

What does the Employment Standards Act say about statutory notice?

When an employee is terminated in Ontario, they often have entitlement to statutory notice under the Employment Standards Act (ESA).  According to the ESA, employees terminated without cause are entitled to one week of notice per year of employment. The maximum notice that an employer has to provide under the ESA is eight weeks.

Reasonable Notice Factors

In addition to the statutory requirements under the ESA, employers also have to give every employee who was terminated without cause reasonable notice under the common law. The only exception is if the employee signed an employment contract limiting the amount of notice to which they are entitled (although employers cannot contract out of their statutory obligations).

Reasonable notice depends on a number of factors and is often equal to approximately one month per year of employment. The maximum entitlement is approximately 30 months. What kind of reasonable notice an employee is entitled to is often specific to that employee’s circumstance. Such circumstances include, for example, the employee’s age and role, as well as how long it would take them to find similar employment elsewhere. When an employee and employer are unable to agree on the amount of reasonable notice, the matter often ends in a court action.

Vice President Terminated After Five Months

In George v. Laurentian Bank Securities Inc., the central issue was the entitlement of a short-term employee to a longer period of reasonable notice. The employee was hired to fill the position of “Vice President, Equity Trading” with a gross salary of $100,000 per year. However, after less than five months of employment, the employee was terminated without cause. At the time of termination, the employee was 58 years old, and the employer had paid the employee the equivalent of three weeks’ pay in lieu of notice, plus 2.5 weeks of benefit continuation.

The Court first examined what constituted reasonable notice at law, the principles which were derived from the case Bardal v. Globe & Mail Ltd.,. These principles included:

  • Character of the employment;
  • Length of service of the employee,
  • Age of the employee at the time of termination, and
  • Availability of similar employment having regard to the experience, training and qualifications of the employee.

Despite Title, Employee was not an Executive

The employee argued that there was a presumption under the common law that senior management or executives who were wrongfully dismissed were entitled to a minimum of 12 months’ notice regardless of the length of service. The Court found that the employee was not an executive or a senior manager, because the employee was not answerable to his employer for the oversight or strategic decision-making in his department. The employee also did not have a role in supervising co-workers in his department.

Furthermore, the employee was not the only one holding the title of “Vice President, Equity Trading”, because all employees in the employee’s division held this title in order to give them clout when dealing with the bank’s institutional clients. Lastly, the employee was not part of the bank’s executive team. The employee reported to the director within the department and was three levels removed from the executive team level.

However, the Court also concluded that, in this case, age was a factor that warranted particular attention. At the employee’s age, his job opportunities were fewer and less promising than for a younger individual with his experience, training and qualifications.

While the court would not award the employee the 12-month notice period that he sought, the court did conclude that providing the employee with three weeks’ pay, 2.5 weeks’ continuation of benefits, and no letter of reference or outplacement counselling assistance was unfair and unreasonable.

The court applied the Bardal factors to the circumstances in this case and found that the reasonable notice period was two months.

Was COVID-19 a factor in the Court’s considerations?

The Court did note that the province of Ontario continued to cope with the economic realities of COVID-19. The Court also noted that at the date of the hearing of the summary motion, the employee remained unemployed despite having made numerous efforts to find new employment. However, those factors were not significant enough to weigh heavily in favour of awarding the employee the 12 months’ reasonable notice that he had requested.

The takeaway from this case is that reasonable notice is decided on a case-to-case basis using factors that have been established in the common law. The amount of ‘reasonable notice’ a terminated employee is entitled to is often dependent on the factors discussed in this case.

For advice on the issue of reasonable notice, related issues and all employment law matters, contact the offices of Toronto employment lawyerGrosman 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.