COVID Pandemic is a Factor to be Considered in the Award of Notice but is not an Extraordinary Circumstance to Justify a Notice Period in Excess of 24 months

August 9, 2021

Nancy Shapiro^*

In a recent decision which considered the impact of the pandemic on a termination of employment, the Honourable Justice Vella held that the consideration of the fourth Bardal factor, namely ‘availability of similar employment having regard to the experience, training and qualifications of the employee’ led to consideration that there were challenging circumstances in terms of finding alternative work due, in part, to the COVID-19 pandemic.

Evidence was led that the pandemic would adversely impact the plaintiff’s attempts to find comparable employment and the employer had admitted that the plaintiff was being terminated as a direct result of the economic downturn caused by the pandemic.

The plaintiff, aged 57, had been a ‘life-long’ employee with 36 years of service, most recently in a senior supervisory position.

Vella J., however, did not find that there was reason here to find there to be extraordinary circumstances to justify an award in excess of the 24-month generally accepted upper-limit on reasonable notice recently reinforced by the Court of Appeal in Dawe v. The Equitable Life Insurance Company of Canada, 2019 ONCA 512.  The plaintiff was therefore awarded 24 months’ notice.

As the 24 months had not passed, the court imposed a constructive trust on the plaintiff’s earnings during the balance of the notice period in favor of his former employer. This will effectively operate as a 100% clawback on earnings from new employment and therefore with all the same impact as if the case was heard following the end of the notice period.

The court here, however, did harshly criticize the employer’s drafting of the termination letter in that it failed to inform the employee clearly as to what the employee’s statutory entitlements were and what the employee would receive in the event the offer the employer was communicating was not accepted, and because the offer itself was not compliant with the Employment Standards Act, 2000.  There were also several subsequent payment errors inexplicably made and the employer failed to inform the employee that the employee’s benefits were continuing as required by the Employment Standards Act, 2000, all of which caused considerable stress.  The court therefore awarded the employee $25,000 in moral damages.

This case provides guidance to employers and employees alike that a COVID bump may exist in some circumstances, but is not likely to increase notice beyond 24 months.  Further, employers must be careful to prepare termination letters clearly and properly or risk financial penalties.

Russell v. The Brick Warehouse LP, 2021 ONSC 4822

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