In a February 9, 2021 decision, Iriotakis v. Peninsula Employment Services Limited, the Ontario Superior Court of Justice considered the impact of the pandemic on a reasonable notice period.
The employee was terminated without cause on March 25, 2020 from his position as the Business Development Manager. The position was a sales position. He earned a base salary of $60,000 per year, but with commissions he earned more than $145,000. He was 56 years of age at the time and had been employed for 28 months. His employment was governed by the terms of an employment agreement, but the termination clause was not enforceable as it provided for less than required by the Employment Standards Act, 2000. He was paid 4-weeks base salary and benefits after being terminated. He secured alternative employment seven months later.
The Court considers age, length of service, character of employment, the availability of similar employment and mitigation efforts in determining an appropriate reasonable notice period. In many cases, the length of service has been the most influential factor often resulting in the range of one month period year of service. In this case, the employer submitted that the reasonable notice period ought to be in the range of 2-3 months.
The employee in this case asserted that he was entitled to receive at least six (6) months of notice on the termination of his employment, in part, due to his inability to find alternative employment as a result of the pandemic. Given the timing of the termination in March 2020, the Court acknowledged that the pandemic has some influence on the employee’s job search. At the same time, the Court noted that the impact of the pandemic on the job market was highly speculative and that the principle of reasonable notice is not a “guaranteed bridge to alternative employment.” The Court also guarded against applying hindsight to a reasonable notice assessment at the time of termination. While the Court agreed that the job market was a factor to consider, this must be balanced against the brevity of employment. The Court determined that 3 months was a reasonable notice period.
The Court also refused to offset CERB payments that were received by the employee during this period stating that it would not be equitable to do so. We disagree. CERB was specifically designed as income replacement for those impacted by the pandemic. In our view, all amounts received on account of CERB should have been deducted from the award. In respect of both the impact of the pandemic on the reasonable notice periods, and the Court’s willingness to deduct CERB payments from a damage award, we expect that there will be more litigation on these subjects. We will keep you informed should more developments in these areas occur.