When a person is wrongfully terminated from their employment and commences a lawsuit, the court will award what are known as ‘reasonable notice’ damages upon determining that the person was wrongfully terminated. Such damages are intended to compensate for the wrong they have suffered and to provide financial support during the notice period, during which they are expected to secure, or at least attempt to secure alternate employment.
Additional damages that may arise in circumstances of wrongful termination include damages for mental distress and/or aggravated and punitive damages and compensation for bonuses and benefits to which the employee would be entitled were they to remain employed, to name a few.
This blog focuses on how the court approaches assessing and calculating the reasonable notice period when a person’s employment has been wrongfully terminated.
Employee Terminated Without Cause After More than 20 Years of Employment
Maximenko v Zim involved a plaintiff who had immigrated to Canada in 2002; shortly after, she began working for the defendant’s ocean freight services corporation. Although the corporation has several Canadian offices, including in Halifax, Toronto and Montreal, it is headquartered in Israel.
The plaintiff continued to work for the defendant in various capacities until March of 2023, when her employment was rather unceremoniously terminated without cause, one month before the plaintiff’s 59th birthday. At the time of her termination, the plaintiff had been working for the shipping company as their General Manager in Canada, a position of senior management in which the plaintiff assumed administrative responsibility for the more than 20 shipping company employees located in the Toronto office.
Commensurate with the termination of her employment, the shipping company offered to pay the plaintiff the equivalent of eight months’ salary, in addition to vacation pay owing to the plaintiff and a $13,000 bonus she had earned by the time of her termination, in exchange for the plaintiff signing a full and final release of all claims against the company. The plaintiff refused to sign the release and instead commenced a lawsuit in which she sought reasonable notice damages, amongst other damages, for the wrongful termination of her employment.
What Constitutes the Reasonable Notice Period?
The reasonable notice period is different in every case because it depends upon several factors. Generally speaking, when assessing what constitutes the reasonable notice period in a given situation, the court will consider the following criteria:
- the age of the terminated employee at the time of termination
- the length of service of the terminated employee to the employer and related companies
- the terminated employee’s level of specialization and status within the company
- the availability of other, similar employment given the terminated employee’s qualifications, experience, training and education
- whether the employee was induced to work for the employer from which they were terminated
What Does Age Have to Do With Anything?
Regarding the first criterion, the age of the employee, the older the age of the employee, the longer the period of reasonable notice. This is because the courts recognize that the older a person becomes, the more difficult it is to secure new employment, given that employers often prefer to hire younger employees who may not yet have developed bad habits or who offer longevity to the company, whereas an older employee may be perceived as less valuable. After all, they may not plan to work for the employer for as long as a younger employee.
How Does Length of Service Matter?
Length of service to the employer is considered similarly to age in that the higher the number, the longer the reasonable notice period, as the courts acknowledge that it is often more difficult for an employee who has worked for only one employee and, therefore, has not necessarily had the opportunity to develop a network of contacts outside of that company, or does not demonstrate significant diversity on their resume, to secure a position with a new employer.
How Do Specialization and Status Influence Calculation of Reasonable Notice?
The employee’s level of specialization and status influences the reasonable notice period because the more niche and expert the position occupied by the employee, the more challenging it may be to secure comparable employment, given that such opportunities may be quite scarce. As such, the more specialized or higher in status the position occupied by the terminated employee, the longer the reasonable notice period assessed by the court.
Why Does Inducement Matter?
Similarly, if the employer induced the employee to work for the company, only to turn around and terminate their employment, the courts will view these actions as sufficient to increase the reasonable notice period. This is because it is the actions of the employer, in inducing the employee to leave presumably secure employment to work for an employer, only to terminate their employment, that have created a loss for the employee that they may not otherwise have suffered had they remained at their initial place of employment.
How Does the Availability of Alternative Employment Come into Play?
Regarding the availability of similar employment, courts are inclined to adjust the reasonable notice period by the chance that the terminated employee can easily replace their employment. In other words, the more similar positions of employment that are available in the same vicinity and on the same terms as the employment from which they departed at the time of departure, the shorter the length of the reasonable notice period. Conversely, suppose only very few similar opportunities exist. In that case, the reasonable notice period is assessed as longer because it will likely take the terminated employee more time to secure employment than those enjoyed with the employer from which they were terminated.
What is the Appropriate Reasonable Notice Period for the Plaintiff?
In this case, the court was satisfied that given the plaintiff’s age at the time of termination (59), the length of her service to the shipping company (20 years, 10 months), her position as a senior manager of the shipping company, the fact that the plaintiff’s tenure with the shipping company represented the entirety of her work experience in Canada, and the fact that this work was in a very niche industry in which the skills developed may not be easily transferable to other employers, the court was satisfied that the plaintiff was entitled to 24 months reasonable notice for the wrongful termination of her employment.
Furthermore, the court noted that this reasonable notice period included not only base compensation but also bonus and pension monies earned during the notice period, as well as reimbursement for car allowance for the duration of the 24 months. The shipping company was also directed to continue to pay for the plaintiff’s health benefits and to ensure that her health benefits, as provided by her former employer, were maintained throughout the duration of the notice period.
Toronto Employment Lawyer Advising Clients On Wrongful Terminations
If you have been wrongfully terminated from your employment, you need experienced legal counsel to ensure your rights are protected and asserted throughout any ensuing legal process. Fortunately, the Haynes Law Firm is here to help.
From our offices in downtown Toronto, Ontario, Haynes Law Firm is proud to provide employees from all over Ontario with knowledgeable legal guidance in all employment matters. Contact us online or via telephone at (416) 593-2731, and one of our friendly staff will be pleased to schedule a confidential consultation.