Setting The Period of Reasonable Notice – Black Magic?

Absent a fixed term contract or an agreement defining the period of notice to be given in the absence of just case, the employer’s obligation is to provide advance notice of termination. The failure to do so will allow a claim for the income sum which would have been earned in this time period, less new income earned. This simple principle is the foundation of all wrongful dismissal cases.

General Range

Normally most lawyers, plaintiff and defence counsel alike, can usually agree to the likely range of the period of reasonable notice. The traditional factors include age, length of service, salary, position held and occasionally whether the employee was persuaded or induced to leave secure other employment. There are a myriad of other factors, but these are often the influential ones.

Take for example, a person employed as sales manager for 10 years, earning $75,000 a year and fired at 50 years of age. Most counsel on either side of the argument would concede the claim would be likely 12 months.

Similarly, a long term employee of 35 years, middle or senior management status would normally lead to a notice period in the range of 18 to 24 months.

The accepted high end of the expected range is roughly 24 months, although this is not set in stone. The low end range would be considered as 1 to 3 months.

Ontario Supreme Court Goes High

A recent decision[1] considered a plaintiff in the following fact situation. He was 59 years of age on termination, earned $300,000 annually, held the position of president and had been employed for 6 years and 8 months. Most counsel would expect an award in the range of 9 to 12 months.

A Supreme Court justice thought otherwise and ordered the notice period and hence financial compensation be set at 18 months. The judge was apparently influenced by the fact that the plaintiff remained unemployed for 30 months following termination, a fact which is generally considered as irrelevant to the fixing of the notice period. The plaintiff does have an obligation to seek new employment but continued unemployment is usually not a factor to set the notice period.

The judge also commented upon the unsuccessful allegations of just cause made against the plaintiff which he had asserted led to his inability to find new employment. This is also an unusual consideration.

Appellate Review

The case is nonetheless instructive of the broad discretion held by a trial judge in setting the notice period. Appeals are possible but to succeed on an appeal on this issue, the Court of Appeal must see the initial award as perverse. Often judges on appeal comment with words to the effect “individually we all see the award as higher than what each of us would have ordered, but not sufficiently high as to warrant our interference”.

Alternatively the Court of Appeal must see a legal error made by the trial judge, which may be present in this case as the judge considered factors generally not relevant in her decision.

Let Legal Advice be Your Guide

Litigation is not predictable. Often lawyers say that law is based on common sense – the issue is whose common sense shall we use? The trial judge does have broad discretion. It can be used in the converse manner as well. Legal advice will give you an expected range of entitlement. Do not wish upon a star for a home run out of the park. This case is unusual and it is not over yet.

Contact the offices of Guelph employment lawyer Peter McSherry. We can guide you through the issues and defend your position. Contact us online or by phone at 519-821-5465 to schedule a consultation

 

 

 

[1] Hale v Innova