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Bardal Factors and the Reasonable Notice Limit – When to see an Employment Lawyer

Z Legal Litigation Lawyer | Toronto, Canada > News and Posts  > Bardal Factors and the Reasonable Notice Limit – When to see an Employment Lawyer

Bardal Factors and the Reasonable Notice Limit – When to see an Employment Lawyer

Bardal Factors and the Reasonable Notice Limit – When to see an Employment Lawyer

 

What is considered a reasonable notice period?

 

There is no dispute that an employer owes a duty to an employee to act fairly and reasonably. In circumstance where an employee has been terminated for reasons besides just cause, a notice of termination (or pay in lieu) is required by the employer. This is also known as “severance pay, which in Ontario is comprised of a statutory notice (and/or termination pay), severance pay, or common law reasonable notice (and/or pay in lieu). However ,

 

How do you determine what a reasonable notice period (severance) is? (Hint: do not look solely at the Employment Standards Act (the “ESA”)).  An Employment Lawyer can assist you in determining the correct range of severance pay.

 

Severance Pay Factors

In Canada, there is a prevalent common law approach to determining a reasonable notice period, through consideration of the Bardal Factors[1]. Courts consider:

(1)  The character of employment;

(2)  The length of the service;

(3)  The age of the employee; and

(4) The availability of similar employment having regard to the experience, training and qualifications of the servant. How these factors are assessed, are very case specific.

 

However, these factors are not a definitive guideline, because courts often deal with unique individuals with relevant specializations, lengthy periods of service, and/or positions/titles which offer no comparable employment options. Speak to an Employment Lawyer about your specific situation, since your specific case may lead to additional considerations.

 

It is an art, not a science[2].

 

What is the maximum notice period that courts have awarded in Canada?

 

It had consistently been argued by employment lawyers and judges that there is no absolute limit or ‘cap’ on what constitutes reasonable notice[3]. However as a guideline, severance should represent the length of time that it takes a terminated employee to find comparable employment[4]. Canadian courts have normally considered this to be approximately one month of notice per year of service, with a maximum of 24 months.

 

There have been cases where more than 24 months have been awarded but only on the determination of “exceptional circumstances”[5].The onus is on the employee’s employment lawyer to demonstrate these exceptional circumstances in seeking awards in excess of 24 months.

 

The burden used to be quite high, but now we see Canadian courts pushing the limit beyond the 24 month ceiling, making the process highly unpredictable.

 

For example, in 2011 the Superior Court of Justice held that it would have awarded up to 36 months to a Senior Vice President (Mr.Dawe) who had been wrongfully dismissed after 37 years of service, if the employee or his employment lawyer had requested it[6]. This case was found to resemble an ‘exceptional circumstance’, as the employee was intending to retire after 3 more years of service (age 65) and was in a senior position with no surrounding replacement opportunities. In a 2006 case however, the Supreme Court awarded 26 months because the employee was 65 years of age, had served his company for 35 years, and had a physical disability which hindered his ability to work [7].

 

So why was Mr.Dawe’s case treated differently?

 

It was largely due to the court reasoning, that if no comparable employment exists, then this was a case of forced retirement and was contrary to the 2006 abolishment of mandatory retirement in Ontario. This was coupled with evidence that Mr.Dawe intended on retiring at the age of 65. This case is important because of the addition of considering “a change in society’s attitude regarding retirement”, in a severance (reasonable notice) matter. This has expanded the definition around ‘exceptional circumstances’ and regardless of the debate around this case, employment lawyers argue that it undeniably makes predictability of what a reasonable notice entails, quite difficult.

 

In essence, there is simply no formulaic approach to calculate the result. What is certain however is that employers should be cautious, and obtain professional legal advice upon reviewing/calculating an employee’s entitlement. An employment lawyer who is well versed in Employment Legislation and Common Law precedent, will know the intricacies in obtaining the best possible outcome for a severance dispute.

 

 

 

 

 

[1] Bardal v. Globe & Mail Ltd. (1960), 24 D.L.R. (2d) 140 (Ont. H.C.), at p. 145

[2] Minott v. O’Shanter Development Co. (1999), 1999 CanLII 3686 (ON CA), 42 O.R. (3d) 321 (para. 343-44).

[3]Lowndes v. Summit Ford Sales Ltd., 2006 CanLII 14 (ON CA), [2006] O.J. No. 13 (ONCA), per Cronk J.A.

[4] Lin v. Ontario Teachers’ Pension Plan, 2016 ONCA 619, (p. 54).

[5] Baranowski v. Binks Manufacturing Co., [2000] O.J. No. 49 (S.C.J.) (para. 277) and see Rienzo v. Washington Mills Electro Minerals Corp., [2005] O.J. No. 5126 (C.A.).

[6] Dawe v. Equitable Life Insurance Company, 2018 ONSC 3130 (para.30).

[7] Hussain v. Suzuki Canada Ltd 2011 CarswellOnt 12251 209 A.C.W.S. (3d) (para 101)

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