Reasonable Notice and Working Notice
In addition to the minimum notice requirements set forth in the ESA, employees are entitled to reasonable notice of dismissal at common law, or pay in lieu of such notice. The entitlement to notice at common law is a contractual one. There may be a valid termination clause in an employment contract which sets out the employee’s entitlement to common law notice.
If the employment contract does not contain a valid termination clause, the employee is entitled to the amount of reasonable notice of dismissal determined by the common law. This applies to employees with employment contracts that are for an indefinite term. The idea underlying common law notice periods is that the amount of reasonable notice, or pay in lieu, should be sufficient to allow the employee to find comparable employment elsewhere, considering the employee’s age, length of service, and the nature of the employee’s position.
Sometimes, although not as common, an employer provides an employee with advance reasonable notice that they will be dismissed as of a date in the future, and the employee is permitted to work during the time notice is given, up to the dismissal date. This is referred to as “working notice”. More commonly, an employer will notify the employee that he/she is being immediately dismissed, and if the employer is not alleging just cause, it will offer the employee a payment in lieu of reasonable notice (a severance payment/ severance package).
What period of time constitutes “reasonable notice?”
An employee who is dismissed without cause is entitled to a reasonable notice of dismissal, or pay in lieu of notice, under both statute and common law.
Minimum Notice Required by Statute
Legislation prescribes a certain minimum amount of notice that is required to dismiss employees without just cause. The statutory amounts are a minimum level only. It is not uncommon for the common law to require additional notice (or additional pay in lieu), sometimes significantly more notice (or pay in lieu) to be provided.
If the employee is a non-unionized, federally regulated employee, see sections 240-246 of the Canada Labour Code (CLC). See also: Wilson v. Atomic Energy of Canada, 2016 SCC 29.
Non-unionized provincially regulated employees who have been employed for more than three months are entitled to the minimum statutory notice period set out in the ESA or such greater notice period as may be established at common law, or pay in lieu of such notice. In British Columbia, the ESA prescribes the following notice periods:
Consecutive Service Minimum ESA Notice Period
3 mos – 1 year 1 week of wages (or notice)
1 – 3 years 2 weeks’ wages (or notice)
3 years 3 weeks’ wages (or notice)
After 3 years One additional week of wages (or notice) for each additional year of employment, to a maximum of 8 weeks (s. 63(3)(iii)BC ESA)
One week’s pay is calculated by:
- Totaling the employee’s wages, excluding overtime, earned in the last eight weeks in which the employee worked normal or average hours; and
- Dividing the total by eight.
Additional compensation is required under the ESA for group terminations.
“Reasonable Notice” Required by Common Law
Determining the amount of notice required by the common law involves judgment, and is in the discretion of the court. This means it is difficult to predict the precise amount of notice a particular individual will have been entitled to, if the case was to proceed to a trial in court. An experienced employment lawyer will review and consider legal cases to determine an approximate “reasonable notice” period.
In the well-known case of Bardal v. Globe and Mail Limited (1960), 24 DLR (2d) 140 (Ont HCJ), an Ontario court set out four primary factors to be considered in determining the approximate length of the common law notice period. These have become known as the “Bardal factors”:
1. character of the employment;
2. the length of service;
3. the age of the employee; and
4. the availability of similar employment, having regard to the experience, training and qualifications of the employee.
The Supreme Court of Canada has endorsed the Bardal factors list of factors in a number of cases (such as Honda Canada Inc v Keays, 2008 SCC 39, 2 SCR 362. However, the Bardal factors do not comprise an exhaustive list. Additional factors may be considered on a case-by-case basis.
More vulnerable employees, for example those who have been injured or have an illness, are often entitled to more notice. For example, the employee’s notice period was increased from 5 to 8 months in Pakozdi v. B & B Heavy Civil Construction Ltd., 2016 BCSC 992 (this case is currently being appealed), due to additional “vulnerability” of the employee at the time of dismissal due to a medical condition.
Also, case law has held that an employee’s unique background and the nature of their responsibilities can outweigh an employee’s short length of employment in assessing a reasonable notice period upon termination. For example, in Waterman v Mining Association of British Columbia, 2016 BCSC 921, the notice period was increased from 5 to 10 months, based on the employee’s position and responsibilities with the employer, and her unique background. However, in Munoz v Sierra Systems Group Inc., 2016 BCCA 140, the British Columbia Court of Appeal reduced the notice period.
As a starting point, although it will by no means be determinative, it may be helpful if you are able to provide your lawyer with details and documentation substantiating how much time it would take or has taken you to find similar work for similar pay.
Reasonable notice is a concept that exists to assist employees. The Ontario Court of Appeal has held, in the case of Michela v. St. Thomas of Villanova Catholic School, 2015 ONCA 801 that an employer’s obligation to provide reasonable notice to its employees is not reduced by financial instability of the employer. Not requiring an employee any longer, encountering economic difficulties, or reorganizing are not sufficient reasons to take away employees’ right to reasonable notice. Just cause must relate to the conduct of the individual employee, not the overall position of the employer. See, for example: Paterson v. Robin Hood Flour Mills Ltd. (1969), 68 WWR 446 (BCSC), Young v. Okanagan College Board (1984), 5 CCEL 60 (BCSC). See also temporary layoffs.
An employment lawyer will typically review and question all documentation relied on by an employer to limit an employee’s severance. Termination clauses in employment contracts are not always necessarily valid and enforceable. Some employers may try to rely on termination provisions in other documents, such as an employee handbook or other such workplace policy documents. For example, in Cheong v Grand Pacific Travel & Trade (Canada) Corp., 2016 BCSC 1321, the court found that an employee handbook termination clause did not limit the employer’s obligation to provide its employees with reasonable common law severance.
Employees also have a duty to mitigate their damages.
Presently, the maximum reasonable notice period in Canada has generally been regarded to be 24 months. In exceptional circumstances, such as very long services cases, often involving older, senior level employees,courts may award notice periods beyond 24 months; see Markoulakis v SNC–Lavalin Inc., 2015 ONSC 1081.
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