Does the COVID-19 Pandemic Impact Reasonable Notice for Employees?

In the recent decision of Kraft v. Firepower Financial Corp., 2021, ONSC 4926, an employee was terminated by the employer without cause. He sued for pay in lieu of notice, commissions, bonuses, holiday and vacation pay.

The employee was a specialized commissioned salesperson working in the investment field and focused on mergers and acquisitions. He sought salary in lieu of notice equal to 10 months of salary.

The employee’s employment was terminated at the onset of COVID-19 in March 2020, within days before the declared emergency. The employee argued that the pandemic seriously impacted his ability to find new employment. The employee in this case had a job search that lasted 13 months, where he applied to over 70 jobs.

The employer argued that there was no reason to take account of the economic shutdown because of the pandemic, as the employee was dismissed before the Ontario government issued its emergency orders, and so any argument about the COVID-19 pandemic should not be given any weight.

The Court disagreed, and indicated that because the Plaintiff was terminated during the second week of March 2020, and that the economy was shutting down and remained closed during the employee’s prolonged job search it impacted him finding a job. It further noted that there was uncertainty in the economy and the job market and fewer employers were looking to fill positions.

The Court determined that a reasonable notice period based on his age, tenure, character of employment and availability of similar employment was in the range of 9 months, but the Court specifically added a month due to the pandemic, awarding the employee 10 months of reasonable notice.  At paragraph 22 the Court specifically states that with respect to the pandemic and reasonable notice period:

As indicated, there is evidence that the pandemic impacted on the Plaintiff’s ability to secure new employment. In light of that evidence, he deserves to receive at least somewhat above the average notice period.

While other decisions in the past year have danced around the subject of whether or not they would consider the pandemic to increase the reasonable notice period, this appears to be the first decision that definitively provides a pandemic bump up to the reasonable notice calculation. At the same time, in this case, there was evidence supporting the challenges faced by the employee due to the pandemic. This was also a unique case due to the timing of the termination at the very outset of the pandemic which is a distinguishable factor.

If you have any questions about this decision, and how it may impact your business, please give us a call.