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Date:
2011.07.07

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THE EMPLOYERS' EDGE

Ontario’s Top Court Provides Clarity Regarding Notice Periods – Unskilled Worker Receives 22 Months’ Notice

A recent Ontario Court of Appeal decision provides some useful guidance for employers when dismissing non-union employees without cause. The decision makes clear that there is no “hard cap” on the amount of notice the court can provide regardless of the character of employment. The decision also suggests that the character of the employment “is today a factor of declining importance” when determining the appropriate common law notice period. In addition, the decision establishes that, after providing notice of termination, if an employer offers multiple temporary employment extensions totaling more than 13 weeks, the extensions will be viewed by the court as one singular extension, resulting in a requirement of fresh notice under the Employment Standards Act, 2000 (“ESA”).

In Di Tomaso v Crown Metal Packaging Canada LP, a 62 year old mechanic employed for 33 years at a metal packaging plant earning $31.00 an hour was terminated without cause and was unable to secure replacement employment – having failed in 22 attempts. The motion judge assessed the plaintiff’s notice entitlement at 22 months, having regard to his age, length of service, availability of comparable employment and the character of the employment.

The employer argued that due to the character of the plaintiff’s employment, i.e., as an unskilled worker in a non-managerial position, that the plaintiff’s notice should have been capped at 12 months. However, in upholding the motion judge’s decision, the Ontario Court of Appeal made it clear that there is no “hard cap” on notice periods for employment of any character and that the 22 month notice period was “at the upper end of the range” but was reasonable as a result of the plaintiff scoring so highly on the other factors.

After providing the plaintiff with 8 weeks’ notice of termination, the employer temporarily extended the plaintiff’s employment on several occasions for a cumulative total of almost 16 weeks. The ESA provides that fresh notice of termination is required if notice is extended more than 13 weeks - if the extension falls short of 13 weeks then the period constitutes proper working notice. The issue before the Court was whether it was appropriate to view the extensions as separate and distinct extensions, none of which exceeded 13 weeks, or as one individual period of extension triggering the requirement of fresh notice under the ESA. The court held that the ESA should be interpreted to the benefit of the employee where ambiguities arise”, and determined the plaintiff’s temporary employment to be one extension for the purposes of the ESA.  As a result, the employer did not receive credit for the sixteen weeks that the employee had been put on notice that his employment could be ending.

The Court’s finding with respect to temporary employment extensions should serve as a caution for employers to be clear and unambiguous when providing notice of termination or extending employment after providing notice. In addition, the Court’s decision to officially reject any notion of a hard cap in the assessment of common law notice periods may result in increased costs for employers.   More than ever, employers should be considering employment agreements for employees where termination obligations and liabilities can be minimized to create certainty at the point of dismissal.

The lawyers at CCP can assist employers with providing clear and unambiguous notice of termination, in determining the appropriate period of common law notice for an employee about to be dismissed without cause and in drafting employment agreements for new and current employees to address these liabilities.

Counsel for the employer has not ruled out seeking leave to appeal to the Supreme Court of Canada and the CCP team will keep you posted on any further developments in this case.

Please Note: This blog has been prepared as an informational service for our clients and other interested parties. It is not intended to constitute legal advice, a complete statement of the law or opinion on any subject. Although we endeavour to ensure the accuracy of the content, no one should act upon the information provided without a thorough examination of the law after the facts of a specific situation are fully considered.

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