Ontario Court of Appeal Upholds 26 Month Notice Period for Manufacturing OperatorWritten on behalf of Peter McSherry
According to recent media reports, the changes we are continuing to see in the workplace due to technology and the pandemic may lead to job losses in some areas while also increasing job opportunities. Often those most likely to be impacted by job losses are those in roles that do not require post-secondary education and/or can be readily automated.
Historically, when courts have considered what is reasonable notice or the appropriate severance, they have often considered more senior management roles as warranting longer notice periods than situations involving entry-level roles or less senior positions. However, recently there have been a number of cases awarding longer notice periods for non-senior management employees where the other severance factors warrant it. The Ontario Court of Appeal recently upheld a judge’s decision in a case that grappled with some of these issues, Currie v. Nylene Canada Inc., 2022 ONCA 209.
Employee terminated after nearly 40 years of loyal service
Based on the trial decision, Currie v. Nylene Canada Inc., we know the employee was hired in a manufacturing facility in September of 1979, shortly after leaving high school after completing the 11th grade. She was hired as a Temporary Twisting Operator and received a number of promotions, finally to Chief Operator reporting into the Shift Leader. While the ownership of the company changed hands several times, she continued to work at the same location. She had never worked anywhere else.
In her role as Chief Operator, she was responsible for a number of tasks, including:
- Scheduling the quality and utilization of production equipment,
- Directing and assigning work to production employees,
- Handling minor personnel problems; and,
- Ensuring the proper functioning of the equipment and safe working procedures.
She had no history of formal discipline and had received largely positive reviews during her tenure as well as a positive reference letter.
In December of 2018, the employer decided to discontinue the operation she worked on effective immediately, impacting 17 employees, including Ms. Currie. This was a not for cause termination based on a restructuring of the company. At the time, Ms. Currie was 58 years old and had been with the company for almost 40 years.
The employer paid only the statutory minimums required under the Employment Standards Act, 2000 – 8 weeks of pay in lieu of notice, benefits continuation for 8 weeks and 26 weeks of severance. As there was no clause in her employment agreement limiting her to this amount, Ms. Currie brought a claim for wrongful dismissal. It was noteworthy that at the time of trial in March of 2021, Ms. Currie remained unemployed.
Court determines reasonable notice or severance
As we have discussed in earlier posts, the test for reasonable notice comes from the seminal case, Bardal v. The Globe and Mail Ltd:
- Character of employment;
- Length of service;
- Age of the employee; and,
- Availability of similar employment, keeping in mind the experience, training and qualifications of the employee.
It is rare that courts award a notice period in excess of 24 months, which is sometimes referred to as the cap or upper limit. However, where there are exceptional circumstances, longer notice periods have been awarded in excess of 24 months. The trial judge held that this was an exceptional circumstance when applying the Bardal factors, to Ms. Currie’s circumstances based on the following:
a. Ms. Currie left high school to start working at BASF as a temporary twisting operator, earning $4.50 per hour. She secured this job through her father […] Her entire working life has been dedicated to working at the Arnprior plant. She has known nothing else.
b. At the time of termination, Ms. Currie was 58 years old. She was in her twilight working years, closing in on the end of her career.
c. She has worked and developed skills in a very specialized field (fiber production operation)[…]
d. Since Ms. Currie entered the workforce in 1979, the work landscape has evolved and changed significantly. Ms. Currie’s experience has been limited to one employer (Nylene and its predecessors), in one type of environment (specialized manufacturing job), which makes it very difficult to transfer her skills to a new employer.
e. Given Ms. Currie’s age, limited education and skills set, the termination was equivalent to a forced retirement. She must compete with people that are much younger than her and that have a different set of skills that may be required such as advanced computer knowledge. She is not well equipped to effectively compete in today’s market or secure comparable employment.
Based on these factors, the judge awarded the employee a 26-month notice period equal to $138,962.22 less any amounts already paid to her. In a separate decision on the legal fees, the judge awarded Ms. Currie $44,114.00 for legal fees and disbursements.
Ontario Court of Appeal Upholds Trial Decision of Exceptional Circumstances
The employer appealed the judge’s decision to the Ontario Court of Appeal on two grounds:
- That the employee had not actually been employed for 39 years with the employer; and,
- That the employee had not successfully established exceptional circumstances warranting a notice period in excess of 24 months.
On the first, the Ontario Court of Appeal confirmed that the judge had made a factual determination on Ms. Currie’s tenure, and there were no palpable or overriding errors in making this determination.
With respect to the exceptional circumstances, the Ontario Court of Appeal reviewed the judge’s reasons and confirmed there was “ample support” for the decision to award 26 months of pay in lieu of notice, including, but not limited to, Ms. Currie’s age, the fact that she always worked for the same employer, had specialized skills that were not broadly applicable, limited education and the termination was “equivalent to a forced retirement”.
Contact Peter McSherry Employment Lawyer for Advice on Reasonable Notice and Severance Packages
The amount of reasonable notice owed on termination can be affected by many common law factors, over and above the requirements of employment legislation.
Peter A. McSherry Employment Lawyer assists employees seeking advice on their entitlement to an extended reasonable notice period and can review proposed severance packages. For employers, we can ensure employee dismissals and lay-offs meet all legal requirements, reducing the risk of employment litigation. Contact us online or by phone at 519-821-5465 to schedule a consultation with Peter A. McSherry.