Canadian HR Reporter

RELATED CASES secured an alternate position after 11 months. Although the cour t recognized that the employee was "a victim of the current scarcity of employment opportunity," it rejected the importance of the state of the economy when assessing what constitutes reasonable notice because of the impact this would have on employers. "In my view, there is a need to preserve the ability of an employer to function in an unfavourable economic climate. He must, if he finds it necessary, be able to reduce his work force at a reasonable cost. "If he can not do so, the alternative may be bankruptcy or receivership. It seems to me that when employment is unavailable due to general economic conditions, there has to be some limit on the period of notice to be given to discharged employees even if they are unable to secure similar employment within the notice period." On appeal, the Court of Appeal for Ontario agreed that the judge was correct to consider the economic circumstances and impact on both par ties. It increased the notice award slightly but only because of the plaintiff 's length of service with the defendant, not because of the economic climate. Lessons for employers We have yet to see the impact of COVID-19 on reasonable notice awards in Canada. While there is precedent for recognizing the impact of a poor economy on the ability to find alternate employment, these are unprecedented times. Employers have found themselves forced to reduce their workforce abruptly due to a global public health emergency. It may be that courts recognize that these unique circumstances militate against longer reasonable notice awards for terminations in the time of COVID-19. If your organization is facing a permanent workforce reduction, there are steps to consider that may reduce the financial cost: • Working notice: If your business is closing, consider working notice to minimize the potential liability on closure. • Salary continuance instead of a lump sum payment: If providing an employee with a termination package in exchange for a release, consider providing salary continuance payments instead of a lump sum amount. This structure may assist your business from a cash flow perspective. • Job placement services and a positive letter of reference: Both (or either) can be part of a termination package. However, consider providing these tools regardless of whether the employee accepts a termination package, as they can assist the employee to find a position more quickly, reducing the employer's potential liability. • Work with experienced employment counsel: As noted above, minefields exist when navigating the termination of a large group of employees. Work with experienced legal counsel to understand the potential liability and develop a strategy to minimize risk. CHRR Priya Sarin and Matthew Badrov are lawyers at Sherrard Kuzz LLP, one of Canada's leading employment and labour law firms, representing employers. They can be reached at (416) 603-0700 (main), (416) 420-0738 (24-hour) or by visiting www.sherrardkuzz.com. If your business is closing, consider working notice to minimize liability. DAWE V. EQUITABLE LIFE INSURANCE COMPANY, 2019 ONCA 512 (ONT. C.A.). Executive with 37 years of service and close to retirement awarded 30 months' notice because of 'extreme high end' of Bardal factors, but Court of Appeal reduced it to 'soft cap' of 24 months. FELICE V. CARDINAL HEALTH CANADA INC., 2014 CARSWELLONT 8419 (ONT. S.C.J.). Company vice-president dismissed after 18 months, but court awarded 12 months' notice because of his important position, his age and because it was unlikely he would find a similar job quickly. 24 HOUR 416.420.0738 Your workplace experts. sherrardkuzz.com | 416.603.0700 | 24 Hour 416.420.0738 | 250 Yonge St #3300, Toronto, ON M5B 2L7 | @sherrardkuzz At Sherrard Kuzz LLP we collaborate with our clients to anticipate and avoid human resources problems. We know proactive steps today will prevent Murphy's Law tomorrow. From human rights to health and safety, and everything in between… If you're an employer, we're the only call you need to make. MICHELA V. ST. THOMAS OF VILLANOVA CATHOLIC SCHOOL, 2015 ONCA 801 (ONT. C.A.). Notice reduced to six months from 12 because of employer's financial circumstances. Court of Appeal returned it to 12, as reasonable notice should allow a dismissed employee time to find new work.

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