Ontario Court: “Age is an Impediment” for Older Employees after Termination

Written on behalf of Peter McSherry

In its recent decision in Ozorio v. Canadian Hearing Society, the Ontario Superior Court of Justice awarded 24 months’ notice to a 60-year-old employee following her termination.

This decision illustrates the factors that courts will consider when determining what an appropriate notice period is for a longer service, older employee, and explicitly recognizes such individuals may be at a competitive disadvantage.

What Happened?

The plaintiff, Stephanie Ozorio, was dismissed without cause following a general restructuring by the employer. At the time of her termination, Ozorio had been a Regional Director. She was 60 years old, and had worked for the employer for over 30 years. Her total compensation package, including RRSP contributions was approximately $104,000. Ozorio was the primary caregiver for her son who required regular medications (covered by her benefit plan) and her elderly mother, both of whom lived with her.

Ozorio’s employer initially presented her with a “voluntary separation offer” which provided her with $93,000 (less than her annual salary), in exchange for a release. Ozorio declined the offer, viewing it as inadequate in light of her long service, and senior role. About two weeks later, the employer sent Ozorio a termination letter offering 12 months’ pay, and limited benefits for 2 months. No offer of a reference letter, or career transition services was made. Ozorio declined the package. The employer paid her the minimum statutory notice period, in this case 34 weeks, and covered benefits for the minimum period they were obligated to do so.

Ozorio sued for wrongful dismissal. Her position was she was entitled to 24 months’ notice.

What Factors Do Courts Consider in Determining Appropriate Notice?

There is no real hard and fast rule when it comes to determining appropriate notice following a termination. Instead, each case is considered on its specific facts. The Employment Standards Act (ESA) provides for a minimum guaranteed statutory period of notice, but it is important to remember that this is simply a basic floor of rights, and most employees are entitled to additional “common law” notice. Appropriate common law notice has been determined over the years through wrongful dismissal caselaw.

The leading case on reasonable notice is Bardal v. Globe & Mail Ltd., which lays out what have become known as the “Bardal factors” that courts will consider when making a determination on reasonable and appropriate notice. The Bardal factors include:

• “Character” of employment (including type of work, compensation earned)
• Length of service
• Age of the employee
• Availability of similar employment, taking into account the former employee’s experience, training, and qualifications.

Since Bardal was initially decided, courts have also begun to consider other factors, such as whether the employer acted in bad faith during the dismissal.

What were the Relevant Factors in this Case?

The most notable factors in this case were Ozorio’s age, length of time she was employed, and the fact that she had only worked for one employer throughout her entire career.

It has been well established that a longer notice period is justified for older, long-term employees as they may be at a “competitive disadvantage” following termination, due to their age.

Here, Ozorio had applied for numerous senior managerial positions in the public and private sectors following her dismissal, but had not been invited to a single interview. The Court noted that the majority of these positions required an advanced degree, which she did not possess, as she had progressed to her Regional Director position through promotions.

The Court also noted that while Ozorio had transferrable skills, it was likely that “having served one employer for such a lengthy period of time, a potential new employer may view [her] as rather set in [her] ways and not as adaptable to change”- another factor that has been established in caselaw as being relevant to determining reasonable notice.

Additionally, the Court acknowledged that “age is an impediment”, citing earlier caselaw where the Court had recognized that a worker in his 60’s would likely encounter “extremely stiff competition with much younger applicants for the same kind of employment”, and that younger prospects were “…more recently trained and less …expensive”

In awarding her the 24 months’ notice, the Court accepted that Ozorio was:

at a competitive disadvantage given her age in the broader job market and having virtually no work experience outside that of the defendant, a not for profit organization.

What Does this Mean for Older Employees?

The combined effect of the end of mandatory retirement in Ontario in 2006, and with the aging of the baby boomer generation has meant that many employees are working longer and longer. Courts have been making a concerted effort to maintain fair and consistent notice periods for older workers, many of whom occupy very senior positions in their organizations, and who have been there for many years.

To date, courts have regularly recognized the greater difficulty that older employees may have in seeking new employment. Common law notice periods for older employees have generally been higher to reflect this reality.  This is expected to continue going forward.

If you have questions about wrongful dismissal, or what notice you may be entitled to, contact employment lawyer Peter McSherry online or at 519-821-5465.