Thursday, September 16, 2010

Ontario Employment Law: Reasonable Notice and 'Character of Employment'

Ontario employers are legally required to provide reasonable notice of termination when terminating employment without cause.

Often, employers fail to do so.

It should come as no surprise, therefore, that an overwhelming majority of employment law cases deal with the issue of reasonable notice.

The legal remedy for an employer's failure to provide reasonable notice is an award of damages, based on the compensation that would have been paid to the employee during the period of notice which should have been provided.

How is this period of reasonable notice determined?

In the leading Ontario case of Bardal v. Globe and Mail Ltd., decided in 1960, it was noted that what constitutes reasonable notice will differ depending on the circumstances of any particular case.

There, the court identified a non-exhaustive list of factors relevant to the assessment of reasonable notice: the character of employment (are you a manager or a non-manager?); the age of the employee and the availability of similar employment; and the length of service of the employee.

McRuer, C.J.H.C. articulated what have come to be known as the Bardal factors, as follows:

There can be no catalogue laid down as to what was reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.
Without question, of these factors, the duration of service of the employee is typically the most significant.

Nevertheless, the character of employment has also been an important consideration with respect to assessments of notice periods, with most courts in the past essentially giving management employees (those with higher levels of responsibility) a lengthier notice period than non-management employees.

This has traditionally been rationalized on the basis that it takes a longer period of time for managers to secure alternate employment than non-management employees.

Courts have reached this conclusion by presuming that there are fewer employment opportunities available for management employees seeking comparable positions as compared with non-management employees because their skills are more specialized and hence relevant to a narrower range of employers, often without undertaking an analysis into whether this is in fact the case.

In Panimondo v. Shorewood Packaging Corporation, a 2009 decision of the Ontario Superior Court, Mr. Justice Strathy notes at at paragraph 33:
With respect to the factor of character of employment, there appears to be a presumption that employees with more senior positions in an organization, such as those with management responsibilities, require a longer notice period than those with lower levels of responsibility. It is presumed that there are fewer employment opportunities available for those whose specialized knowledge and skills demand higher managerial positions with comparable salaries and benefits:Minott v. O’Shanter Development Company Ltd. 1999 CanLII 3686 (ON C.A.), (1999), 42 O.R. (3d) 321, 40 C.C.E.L. (2d) 1 (C.A.); Cronk v. Canadian General Insurance Company 1995 CanLII 814 (ON C.A.), (1995), 25 O.R. (3d) 505, 14 C.C.E.L. (2d) 1 (C.A.).
In a 1995 decision of the Ontario Court of Appeal, Cronk v. Canada General Insurance Corp., Weiler J., in dissent, essentially rejected this presumption, arguing that there may be more compelling reasons to reach the opposite conclusion - that clerical workers as opposed to senior managers probably experience more difficulty in securing employment.

She cites a number of reasons for this, not least of which is that while there may be fewer job vacancies for senior managers, they are often in a much better position to secure re-employment because of their education, training, and contacts.

The majority of the Ontario Court of Appeal differed, however, and continued the traditional approach, holding that the clerical nature of Mrs. Cronk's work did not entitle her to any extended period of notice.

Currently, Ontario law holds that managers typically remain entitled to longer periods of notice than non-managers. The character of the employee's work is still an important factor to be considered.

This may continue to be a topic of ongoing debate, however.

What is more, this traditional analysis may see increasing challenge in our current economy, where many employees cannot be neatly classified as managers or non-managers, and where online employment recruitment continues to revolutionize the job search process.

- Robert Tanha, Toronto

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