What is notice?
Notice is advanced warning of an employer’s intention to terminate an employee without cause.
Employers usually provide an employee with termination pay or a severance package in lieu of notice. In that regard, notice is basically the amount of future earnings an employer must provide a terminated employee. Therefore, notice is calculated in units of time.
Notice comes in two forms: statutory notice and “reasonable notice”. Statutory notice is the minimum amount of notice that an employer must provide an employee according to laws made by the government (i.e. the Employment Standards Act). Reasonable notice, on the other hand, is the amount of notice that an employer must provide an employee according to common law “precedents”, or similar cases from Canadian courts.
Reasonable notice is generally much more lucrative than statutory notice. While the Ontario Employment Standards Act’s minimum statutory notice provisions provide only one week of notice per year of service, up to a maximum of 8 weeks, reasonable notice can provide up to a few months of notice per year of service, up to a maximum of about 30 months.
Do I qualify for reasonable notice?
Employers must give “reasonable notice” to all employees unless the employee signed an employment contract limiting them to statutory minimum notice or some other formula regarding notice.
Even if an employment contract limits common law reasonable notice, an employment lawyer may be able to strike out the clause in the employment contract that limits common law reasonable notice as void or unenforceable. Click here for more or call us today for advice.
What is reasonable notice?
Reasonable notice is the amount of notice an employer must provide an employee based on the facts of each case. Unlike statutory minimum notice, determining the amount of reasonable notice an employee is entitled to is an art, not a science. There is no mathematical formula to calculate reasonable notice.
Calculating reasonable notice
The first step in calculating reasonable notice is to answer this question: how much time will it take the terminated employee to find comparable employment? This is generally determined by examining four factors:
- the character of the employee’s position and responsibilities;
- the employee’s length of service;
- the employee’s age; and
- the availability of similar employment.
The second step in calculating reasonable notice is to compare the employee’s above four factors, plus any other important fact, to precedents (i.e. court decisions) with similar circumstances. For example, if our client was a sales person, with no subordinates, who worked for 5 years, who was 45 years old, and whose industry was relatively small, we could know that our client would be entitled to about 8 months’ reasonable notice because a precedent we found provided a comparable employee with the same.
Notwithstanding the above, the courts are open to creative interpretations of reasonable notice. For example, if an employee was persuaded to leave a job to come to another (i.e. inducement), the courts may take that into account in calculating the employee’s length of service and thus drastically increase the notice period. Moreover, the courts have found that the following facts lengthen the reasonable notice period, to name a few:
- unfounded allegations of just cause;
- difficult economic conditions;
- relocation issues;
- non-solicitation or non-competition clauses in the employment contract;
- time of year (i.e. Christmas or the summer); and
Thus, whenever we get a new client, we ask them a series of questions reflecting the four factors noted above, plus any other important facts. Thereafter, we compare the client’s answers with a wrongful dismissal database of precedents from over 10,000 Ontario and Canadian court cases to determine what a court would likely award that client based on their circumstances. Only then can we calculate how much reasonable notice they should receive.
Reasonable notice can vary widely depending on the circumstances
Some employees could be entitled to around 30 months’ notice, while other employees could be entitled to just one month of reasonable notice.
For example, a vice president of a movie theatre chain, who has worked for the company for her entire career, who is 65 years old, and whose high skills only apply to generally non-vacant positions at a few employers, would receive the maximum amount of reasonable notice. This is because it would be very challenging to secure new employment, considering:
- any job less than Vice President would be inappropriate, and those positions are rare;
- her tenure with a single employer has tainted her;
- her age is a barrier for the long term plans of another employer; and
- there are few similar movie theatre companies in the country, so her pool of target employers would be very small.
In this case, the Vice President would likely receive around 24 months of reasonable notice.
Alternately, for example, a movie theatre ticket collector, who is just starting his career, who only worked one week, who is only 18 years old, who has no skills, would receive the minimum amount of reasonable notice because he could easily find comparable employment. After all, there are almost unlimited vacant and low skills positions he could apply to at his age.
In this case, the movie theatre ticket collector would likely receive only one month of reasonable notice. Short term employees, even those who only worked a single day, are generally entitled to a minimum of 1-3 months’ reasonable notice. The courts are sensible, and are aware it takes months, not days, for people to land on their feet.
Speak to an employment lawyer
Unless the employment contract states otherwise, it is a wrongful dismissal if the employer provides anything less than reasonable notice.
Employees should review their termination or severance package with an employment lawyer to determine if they were provided reasonable notice. If they were not provided reasonable notice, they should demand more money or sue for wrongful dismissal.
Employees should carefully choose their employment lawyer to demand more money or sue for wrongful dismissal. Employees should only hire employment lawyers who actually practice employment law as a specialty. Rational people wouldn’t hire an employment lawyer to draft their will, so why would they hire the same lawyer who drafted their will to draft a demand letter or represent them in a wrongful dismissal lawsuit?
Finally, people should know that it is just a myth that employees are generally awarded 1 month of reasonable notice for every year of service.
Dutton is a Toronto reasonable notice law firm helping clients with severance and termination packages.