When COVID-19 first made its way to Canadian shores, some employment lawyers suggested that the pandemic and the economic shutdown that came with it would serve to extend the reasonable notice period due to dismissed employees.
However, three recent employment law decisions suggest judges in Ontario think otherwise. As we explore more fully below, the court in each case essentially dismissed COVID as a factor in determining the length of the reasonable notice period under the common law.
Yee v Hudson’s Bay Company, 2021 ONSC 387
The 62-year-old plaintiff was terminated from his $160,000 per year job in August 2019 after almost 12 years of service in various senior product design roles for the defendant.
Although he had already received 11 months salary following his dismissal, Yee wanted the reasonable notice period set at 18 months. He claimed that the COVID pandemic had interfered with his ability to obtain comparable employment, one of the elements of the Bardal factor analysis. Notably, he made 90 applications for new employment without success.
Ontario Superior Court Justice Grant Dow was unmoved by the COVID arguments, pointing to case law indicating that notice is to be determined by the circumstances at the time of termination, which for Mr. Yee came before the first pandemic lockdown. Justice Dow 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.”
The judge eventually settled on a 16-month reasonable notice period, concluding that both Mr. Yee’s age and his high income level weighed in favour of a longer notice period under a Bardal factor analysis.
Flack v. Whiteoak Ford Lincoln Sales Limited, 2021 ONSC 7176
Ontario Superior Court Justice Sean Dunphy came to a similar conclusion on the impact of COVID in this summary judgment motion involving a 61-year-old employee terminated without cause just nine months into his tenure as finance manager at a car dealership.
Crucially, the plaintiff’s January 2020 firing also pre-dated Ontario’s lockdown. Still, Mr. Flack claimed that his reasonable notice period should be lengthened to reflect the impact of the pandemic on his prospects of obtaining comparable employment. He eventually obtained fresh employment in June 2020, soon after the province’s first reopening.
Expressing his sympathy for the hardship the shutdown imposed on both the plaintiff and the defendant, Justice Dunphy wrote that neither could have reasonably contemplated its impact on the date of termination.
“COVID was clearly a subsequent event in this case and ought not to impact the determination of the period of reasonable notice,” he concluded.
Despite his position on the effect of COVID on the reasonable notice period, the judge was willing to take the plaintiff’s COVID-related struggles into account when assessing the reasonableness of his mitigation efforts, finding “no merit at all to suggestions that any alleged lack of diligence on Mr. Flack’s part contributed to the length of time between his positions.” This means, depending on the timing of the termination, COVID may impact one element of the wrongful dismissal analysis (mitigation) but not another (the length of the notice period).
In the end, Justice Dunphy’s Bardal analysis led him to conclude that two months was a reasonable notice period for the plaintiff.
Marazzato v Dell Canada Inc., 2021 ONSC 248
Justice Dow was asked to take the COVID-induced economic downturn into consideration as a factor in the plaintiff’s ability to obtain comparable employment following his termination without cause, which occurred in March 2020 on the eve of Ontario’s lockdown.
The 59-year-old plaintiff — who had spent 14 years with the defendant company and earned more than $450,000 in each of his last three years of employment— claimed that he should receive 20 months of common law reasonable notice, in part because of the difficulty he would have in finding new work.
Again, the judge declined to assign any weight to the pandemic in assessing the reasonable notice, although for markedly different reasons. The judge did not comment on the timing of the plaintiff’s termination (notably, also pre-pandemic) but found that a lack of evidence of the effect of COVID on the availability of comparable employment prevented him from deciding it had done so.
Furthermore, Justice Dow commented that, because the plaintiff worked in the computer industry at a time when more people were relying on computers and the internet, the pandemic may actually have increased the plaintiff’s marketability to alternative employers.
“Mr. Marazzato’s former employer and his skill set is in the computer business which may have actually benefited from the COVID pandemic and its resulting greater use of computers for access to the internet and remote practices. The only evidence that touches on this area before me was Dell’s strong financial performance to October, 2020 as reflected in its increased share price. That is insufficient to make any concrete determination. Overall, I would conclude this factor does not favour a longer period of notice,” the judge added.
Ultimately, Justice Dow ordered an 18-month reasonable notice period, splitting the difference between the positions of the plaintiff and the defendant, who had argued for 16 months.
Takeaways
The lesson from these three cases is that the simple fact of the COVID pandemic will not be enough on its own to extend the common law reasonable notice period.
For employers, these cases suggest that they would be wise to focus on the timing of terminations since none of the judges were willing to entertain arguments for longer notice periods when the firing occurred before the onset of COVID in this country.
Employers may also want to call evidence that the industry in which the plaintiff was employed did not suffer any particular downturn or detriment due to COVID, so as to refute the suggestion that substitute employment was difficult to obtain.
By contrast, plaintiffs who wish to rely on COVID as a factor in their wrongful dismissal to justify a longer notice period will need to call evidence showing exactly how the pandemic has affected their ability to find new employment.
