Ontario Courts Address Impact of COVID-19 Pandemic and CERB Benefits on Wrongful Dismissal Claims

Written on behalf of Peter McSherry

One year after the onset of COVID-19 cases in Canada, court are beginning to hear wrongful dismissal cases filed by employees who were terminated during the pandemic.

In two recent Ontario cases, courts considered terminated employees’ arguments that the pandemic entitled them to longer reasonable notice periods due to the difficulty posed by the pandemic in finding alternative employment.

First Case : Employee Awarded 16 Months’ Reasonable Notice

In the first case, issued on January 18, 2021, an employee had filed a claim against the employer seeking 18 months of reasonable notice as well as bonus payments for the same period. 

The employee had been working for the employer since 2008 and was terminated on August 28, 2019. At the time, he was 62 years old. 

Upon termination, the employee was paid 11 months of salary and benefits. 

The employee filed a claim against the employer seeking 18 months of reasonable notice. He also sought payment for the bonus he would have received for 2019, and benefits.

When the employee’s case was heard by the court in December 2020, the employee had submitted approximately 90 job applications since his termination, but remained unemployed. As a result, heargued that the court should take into account the difficulties in obtaining new employment caused by the COVID-19 pandemic in awarding a notice period.  

While the court stated that economic factors such as a downturn in the economy that causes an employee difficulty in finding new employment may justify a longer notice period, it also noted that notice must be determined by the circumstances existing at the time of termination and not by the amount of time that it takes the employee to find new employment.  On the issue, the court stated:

“It seems clear terminations which occurred before the COVID pandemic and its effect on employment opportunities should not attract the same consideration as termination after the beginning of the COVID pandemic and its negative effect on finding comparable employment.”

Nonetheless, having taken into consideration all of the employee’s circumstances, including the difficulties posed by the pandemic, the court held that the employee was entitled to 16 months reasonable notice, as well as the bonus he would have received during that period.

Second Case: Employee Awarded 6 Months’ Notice

In the second case, issued on February 9, 2021, the court took into consideration arguments relating to both the COVID-19 pandemic and related government emergency benefits.

The employee had been terminated on March 25, 2020, after almost 28 months of employment with the employer. He was 56 years’ old. Upon termination, he was paid four weeks of his base salary.

Following termination, it took the employee approximately seven months to secure new employment, during which time he received Canada Emergency Response Benefit (“CERB”) payments.

The employee brought a claim for wrongful dismissal against the employer. The employee sought six months’ reasonable notice period as well as the payment of commissions for the same period. 

Addressing the employee’s difficulties in securing new employment during the pandemic, the court stated:

“I was asked to make findings about the job market and the possible impact of COVID-19 on [the employee]. I have little doubt that the pandemic has had some influence upon [the employee’s] job search and would have been reasonably expected to do so at the time his employment was terminated in late March 2020. However, it must also be borne in mind that the impact of the pandemic on the economy in general and on the job market, in particular, was highly speculative and uncertain both as to degree and to duration at the time [the employee’s] employment was terminated. The principle of reasonable notice is not a guaranteed bridge to alternative employment in all cases however long it may take even if an assessment of the time reasonably anticipated to be necessary to secure alternative employment is a significant factor in its determination. I must be alert to the dangers of applying hindsight to the measuring of reasonable notice at the time when the decision was made to part ways with the [employee].”

The court further addressed the issue of the employee’s CERB payments, stating:

“I agree with the [employer] that CERB cannot be considered in precisely the same light as Employment Insurance benefits when it comes to calculating damages for wrongful dismissal. CERB was an ad hoc programme and neither employer nor employee can be said to have paid into the program or “earned” an entitlement over time beyond their general status as taxpayers of Canada. The level of benefit paid (approximately $2,000 per month) was considerably below the base salary previously earned by the [employee] to say nothing of his lost commission income. On balance and on these facts, I am of the view that it would not be equitable to reduce [the employee’s] entitlements to damages from his former employer by the amount of CERB given his limited entitlements from the employer post-termination relative to his actual pre-termination earnings. I decline to do so.” 

In the result, the court awarded the employee payment for three months’ notice, without offset or deduction for CERB payments received, as well as the commissions he would have been entitled to during that period. 

Get Help

If your employment has been terminated without reasonable notice or severance from your employer, you might have a claim for wrongful dismissal. Even if your employer claims that the notice or severance is reasonable, it pays to check with a highly qualified employment lawyer to ensure that all legal requirements were, in fact, met by your employer. The employment laws are complicated and intertwined. The basis for a claim might exist even if your employer claims to have followed the law. 

At Peter A. McSherry Law Office, I provide each of my clients with a full assessment of his or her case. Disputes in wrongful dismissal claims are usually based on severance pay, benefits and/or the timeliness of the notice. However, if an employer claims or cites misconduct as the cause for dismissal, reasonable notice is not needed. We can discuss the facts of your case. I can help you discover and weigh your options in a straightforward manner with respect for your needs and objectives. I can protect your rights. Call me at 519-821-5465 or contact me by e-mail to schedule a consultation.