Monday, June 27, 2016

What's the Minimum Reasonable Notice Period?

Throughout English-speaking Canada, if you don't have a valid express contractual clause setting out your entitlements on termination in non-union environments, the usual result is that you're entitled to "reasonable notice".

Much of the job of an employment lawyer is figuring out what's "reasonable" in a given scenario, based on factors like length of service, age, character of employment, and availability of replacement employment.

In Ontario, at least, it's pretty well-established that there's a soft ceiling of 24 months.  There are exceptional cases, but you rarely see more than 24 months.

But what's the minimum?

There's no question that assessing the notice periods for short service employees can be a relatively difficult task, so the entitlements of 'new employees' are hotly debated.  There's long been an attitude among employers that 'reasonable notice' should never really be much more than about a month per year of service.  In the 1990s, respected employment lawyer and mediator Barry Fisher used a comprehensive database he developed to prove that this "rule of thumb" didn't really track the outcome of cases, especially for particularly short-service and particularly long-service employees.  In 1999, in the case of Minott v. O'Shanter, the Ontario Court of Appeal expressly rejected the "rule of thumb", finding that it placed an undue emphasis on length of service, to the detriment of the other factors.

Accordingly, while it's always surprising to people outside of employment law, it's not at all uncommon to see employees with less than a year of service getting notice periods of 3 months or more, or to see employees with just three years of service getting upwards of 6 months.  For managers in particular, it's not at all unusual to see someone with 3 or 4 years of service obtaining a reasonable notice period approaching one year.

A few years back, I watched a presentation by Justice Sproat, a well-respected employment law judge, where he asserted that any 'real job' can be expected to take no less than 3 months to replace.  I've had similar conversations with experienced employment law mediators, including one recent mediation for a very short-service employee where the mediator suggested that anything outside the 3-6 month range was very improbable.  This is in line with much of the case law.  It's fairly rare to see notice periods assessed at much less than 3 months, and this tends to be the understanding in the employment law bar in general.

Yet there's very little case law actually talking about general propositions for short-service employees.  Is there a floor, or even a soft floor, for reasonable notice periods?  A number that you won't get below, barring exceptional circumstances?  It would actually be very helpful to have such a figure.  As employee counsel arguing my client's position, or employer counsel advising my client, to have a judicial decision setting a rough minimum for notice periods.  (It's not unusual to see an employer offering 6-8 weeks of notice, or sometimes even less, which is usually a pretty aggressive posture.)

However, in recent years, there have been some cases out of the west coast talking a bit about low-end notice periods - a couple of decisions from the British Columbia Court of Appeal Hall and Saalfeld, culminating in a recent decision from the Yukon Court of Appeal, in the case of Cabott v. Urban Systems, where the Court referred to a range of "two to three months" as being "a useful starting place" for a short-term employee.  The Court concluded that, because of Cabott's level of responsibility, the range should be bumped up to four months (but not to six months, as found by the trial judge).

On the facts, the Court's treatment of Ms. Cabott is, perhaps, rather questionable:  The Court refers to the the Hall and Saalfeld decisions as being essentially a baseline, and places Cabott's circumstances slightly above them.
On the other hand, there is some force to the submission that Ms. Cabott’s position in Whitehorse, described by the judge as senior and supervisory management, involved somewhat greater responsibility than the positions discussed in Saalfeld and Hall. Accepting the description of the range of notice for specialized employees in short term positions as two to three months as observed in Saalfeld and Hall, the character of this employment would justify an award modestly beyond that range.
While it's certainly true that Cabott, at age 53, was older than Hall (42) and Saalfeld (35), and likewise true that the trial judge considered her role to be "senior and supervisory", unlike Hall and Saalfeld, there remains one minor hitch with the Court's reasoning here:  The British Columbia Court of Appeal had upheld a five month notice period for Saalfeld.  They had felt it was at the high end, but not so outrageous as to warrant appellate intervention.  The trial judge awarded Cabott, with a more senior role, a significantly higher age, and even a longer period of service, a modest one month improvement over what the BCCA had upheld for Saalfeld.

There's a bit of revisionism here:  The BCCA was clearly of the view that 2-3 months would have been more appropriate for Saalfeld, but 5 wasn't totally outrageous.  Yet, in the Cabott decision, one would think that going much beyond the three months for a short service employee requires executive-level and/or retirement age employee.

What's more, I might resist the idea that Cabott's age and character of employment should move the notice period so very little.  It seems to put far too high a degree of importance on 'length of service'.

Indeed, the very language of a 'starting position' for short-service employees, to be bumped up depending on other factors, looks a little too similar to the "rule of thumb" language the Ontario Court of Appeal rightly rejected in Minott.

If we read the "starting place" language as creating a floor, assuming all Bardal factors to be toward the low end, then that would make sense.

Yet the Yukon Court of Appeal's reasoning appears instead not to do this, ultimately asserting 2-3 months not so much as a floor, but rather as a soft ceiling based on one of the Bardal factors.  This reasoning is reminiscent of the Ontario Court of Appeal's reasoning in Cronk in 1995 - a decision which was dismantled piece by piece, starting with Minott in 1999.

Notwithstanding a questionable application, however, I expect that, across the country, Cabott will be routinely cited for this simple proposition:  "For a short term employee the useful starting place in discussing range is the two to three months spoken of in Saalfeld and Hall."

And I suspect that this will make many wrongful dismissal cases far easier to settle.


This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.

The author is a lawyer practicing in Newmarket, primarily in the areas of labour and employment law and civil litigation. If you need legal assistance, please contact him for information on available services and billing.

1 comment:

  1. Good post. From the above, I would assume 3 month to be a soft floor.. The problem is that claims of short term employees are most likely to be arbitrated at the small claim court level and their decisions seem to be all over the place.