An employee is entitled to common law notice in Ontario if they are terminated from without cause and they do not have an enforceable termination clause in their employment contract.
By default, all non-unionized employees in Ontario (and Canada) are entitled to common law notice of termination of employment. Every contract of employment in Ontario has an implied term of common law notice. They only way to get rid of an employee’s right to notice is by contracting out of such right by inserting an enforceable “termination clause” in the employee’s original contract. In this regard, an employer is free to put in a termination clause that says the employee is not entitled to common law notice, rather he is entitled to some other amount. However, if there is no enforceable termination clause, then, again, the employee is entitled to common law notice.
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What does “common law” mean?
Common law means “judge made” law. It is the law that develops over time from the courts. Common law is not the law that is legislated by the government. That is is “statutory law”.
Thus, common law notice is the judge made rule that you get notice or pay in lieu of notice if you are let go from work. This law developed over a hundred and fifty years ago in the British courts. Click here to learn more about the history of the common law.
Common law employment is therefore the opposite of “at will” employment, which is the law of the land in the United States which says an employee is not entitled to any notice even if they are terminated without cause.
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What is common law notice?
Common law notice is the amount of time an employer owes an employee in warning them that their employment is to be terminated. Notice can be provided as working notice or as pay in lieu of working notice.
Is my termination clause enforcable?
An employment lawyer will have to review the termination clause to determine if it is enforceable. Call for a free consultation to have your termination clause reviewed.
Nevertheless, there are several ways to get out of termination clause. Primarily, a termination clause may be void if it contracts out of or waives an employment standard, including notice standards. These standards represent a minimum level or “floor” of rights which cannot be undercut by the express or implied terms of an employment contract: see, for example, Machtinger v. Hoj Industries Ltd., 1992 CanLII 102 (SCC),  1 S.C.R. 986. See the eText on Wrongful Dismissal and Employment Law for more. Click here for some of the other ways to get out of termination clause.
How to calculate notice?
In the case Bardal v. The Globe & Mail Ltd., 1960 CanLII 294 (ON SC),  O.W.N. 253 (H.C.J.), the Ontario High Court of Justice set out the criteria for determining appropriate calculation for determining reasonable notice, stating (at para. 21): “[t]here can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.”
In applying these Bardal factors, the courts have avoided a “calculator” approach. As held in Minott v. O’Shanter Development Co., 1999 CanLII 3686 (ON CA), 168 D.L.R. (4th) 270, 42 O.R. (3d) 321 (C.A.) (at para. 62), “[d]etermining the period of reasonable notice is an art not a science… In each case trial judges must weigh and balance a catalogue of relevant factors. No two cases are identical; and, ordinarily, there is no one “right” figure for reasonable notice. Instead, most cases yield a range of reasonableness.
Click here for more on calculating reasonable notice.
Is statutory notice the same as common law notice?
Statutory notice is just a minimum. Like minimum wage, it only applies to you if you have an agreement (i.e. a termination clause) with your employer that all you get upon termination is statutory notice. If you do not have an agreement with you employer promising you statutory notice only, then you get common law notice.
What is severance?
Common law notice is also called “reasonable notice”, “severance”, and “termination pay”. It is all the same thing.
Who is entitled to common law notice?
Every employee, who does not have an enforceable termination clause, who is terminated without cause is entitled to common law notice. Employees who are let go for “just cause” are not entitled to notice.
What happens if an employee is not provided enough notice?
If an employee is not provided enough notice, then it is a wrongful dismissal. A lawsuit for wrongful dismissal is based on the implied obligation in the employment contract to give reasonable notice of an intention to terminate the relationship in the absence of just cause. Thus, if an employer fails to provide reasonable notice of termination, the employee can bring a lawsuit called “wrongful dismissal” for breach of the implied term to give reasonable notice. Click here for more on wrongful dismissal.
Jeff is a lawyer in Toronto who works for a technology startup. Jeff is a frequent lecturer on employment law and is the author of an employment law textbook and various trade journal articles. Jeff is interested in Canadian business, technology and law, and this blog is his platform to share his views and tips in those areas.