The Impact of the COVID-19 Pandemic on Canadian Employee Reasonable Notice Periods
The Impact of the COVID-19 Pandemic on Canadian Employee Reasonable Notice Periods
What impact will the pandemic have on employee claims for reasonable notice? Will employees be able to claim more notice based on the current state of the economy? Or will employers be able to resist attempts to claim excessive or inflated notice periods?
In one of the first decisions to address the issue, the Ontario Superior Court of Justice has provided some guidance in its ruling in Yee v. Hudson’s Bay Company, 2021 ONSC 387.
Melvin Yee worked for the Bay for 11 years and was Director or Product Design when his employment was terminated without cause in August 2019 (about six months before the start of the pandemic). At the time of termination, Yee was 62 years old. He filed a claim for wrongful dismissal and sought an 18-month notice period.
One of the grounds which Yee’s lawyers used to support the claim for a lengthy notice period was the position that the pandemic has made it more difficult to find new employment.
The Court rejected the claim that the pandemic should be taken into account when determining the notice period. The judge’s reasoning was based on an earlier Ontario Court of Appeal decision which held as follows: “Notice is to be determined by the circumstances existing at the time of termination and not by the time it takes the employee to find employment.”
Since Yee’s employment was terminated before the start of the pandemic, the pandemic could not properly be considered as a factor influencing the reasonable notice period.
This decision and the Court’s reasons did, however, leave the possibility open that employees dismissed after the pandemic might argue for longer notice.
Key Takeaway For Employers
There are a variety of prior decisions which have considered economic and job market conditions, and how they might impact the notice periods for Canadian employees. In some instances, a generally poor job market or economy will be used as the basis to either the notice period or award notice at the tend of the range. There are, however, limits to this argument, and even if an employee remains unemployed for a lengthy period of time, the key will be to assess the notice period (and related market conditions) at the time of termination rather than the time when the court is assessing notice. The Yee decision provides some good news for employees since it confirms that employees terminated prior to the pandemic are not automatically entitled to extended or inflated notice periods. We would expect that numerous issues relating to the impact of the pandemic will continue to be debated and indeed litigated throughout the coming months.