Are i) the economic climate that prevails; and/or ii) the employer’s particular economic circumstances relevant to determining “reasonable notice” in Quebec? On the one hand, the criteria that supposedly make up the matrix of factors that determine the “reasonability” of common-law notice (styled notice in accordance with Arts. 2091-2092 C.C.Q. in Quebec) seem decidedly skewed towards considerations that relate to the employee being let go, such as, inter alia, the time it might take the employee to find alternate employment. Indeed, the whole point of “notice” or “pay in lieu thereof”, as noted in the case law, is to provide a cushion to the employee to help him/her to adjust to changed circumstances when the employer exercises its right to terminate employment, “at will” and without “serious reason”. Save for the case, when an employee is entitled to challenge a “discharge” before the Quebec Labour Relations Commission pursuant to the Labour Standards Act, an employer always has the right to terminate an employment agreement that is indeterminate in length. Case law in Quebec traditionally has held that an employer who reduces staff because of position closures, redundancy or for economic reason terminates “without serious reason”.
It was decided, quite some time ago, that while hard economic times may make it probable that an employee’s “readjustment” would be longer, an employer who determines that it must permanently reduce its work force because of economic difficulties should not be penalised even more at such a critical juncture by having to increase the length of reasonable notice! In Breeze v. Federal Business Development Bank, C.S.M. 500-05-021058-829, Mr. Justice Fraser Martin wrote at pp. 6 to 7:
“While undoubtedly the overall economic situation has, in instances such as this, extended the period normally required to relocate, I think that the time required for relocation should be considered along with all other pertinent factors such as age, position occupied, length of service, salary, in the light of what would be reasonable in an ordinary climate. Furthermore, no one factor is controlling. To decide otherwise would be to impose on the employer the obligation of shouldering the consequences of the very situation which it is attempting to salvage and to sanction for all practical purposes the principle of security of employment which does not exist under our law.” (Underlines, our own)
A recent Superior Court judgment seems, now, to have put those principles into question. The Superior Court in Bernachez v. Commonwealth Plywood Ltd., C.S. Temiscamingue, 610-17-000112094, rendered on May 9, 2012, now posits that the difficult economic climate can be used to reduce what otherwise would be a “reasonable” length of notice. Plaintiff Bernachez had been in the employ of Defendant or its predecessors, for some 34 years. Pursuant to Art. 2097 C.C.Q. which provides for continuity of employment in the event of “alienation of the enterprise”, the employee’s entire work history and continuous years of service became pertinent in assessing reasonable notice. Given the disastrous situation of the forestry industry in Quebec and in particular, in the Témiscamingue-Outaouais region of the Province, where the parties in fact resided, the Court reduced what would have been “normally” an award of 24 months, recognized as the maximum in Quebec, to 18 months, holding that when it measures the reasonableness of notice, the Court must analyse matters not only from the perspective of Plaintiff, but also from the perspective of Defendant. While clearly there had been no bad faith on the part of Defendant, “the difficulties caused to Defendant by the crisis in the forestry industry are beyond doubt” (paragraph 79):
“[79] In the present matter, the evidence shows no bad faith on the part of Defendant. Not only is there no apparent bad faith on Defendant’s part, but the difficulties caused to Defendant by the crisis in the forestry industry are beyond doubt.
[80] In the absence of this important financial crisis, it is possible that Plaintiff would have been entitled to a notice of the maximum duration recognized by our jurisprudence, to wit 24 months. Nevertheless, this Court believes that the circumstances within which notice is to be applied must be analysed not only in respect of Plaintiff but as well in respect of Defendant.
[81] For these reasons, the Court fixes the indemnity to which Plaintiff is entitled to notice of 18 months duration.” (Translation and underlines, my own)
It is one thing to refuse to increase the length of notice in hard economic times, as Plaintiff suggested should be done in the Breeze case. It is quite another for the Court to take into account “Defendant’s circumstances” in calculating notice pay that would seem to open the door to notice pay as a function of the employer’s ability to pay. . Acting as I do for management, I would be most happy if this position remains the law of the land. I am not aware of any judgment in Quebec to that effect, or anything similar to what Bernachez posits. Whether or not there will be an appeal is too early to say as judgment was rendered only on May 9, 2012.
Given the effect of the economic climate in the forestry industry, the Court “reduced” the notice period by six (6) months.
As a member of the Management Labour Bar for almost 40 years, I withhold further personal comment adding, however, that it remains for either the Court of Appeal, in the event of an eventual appeal, or future judgments to determine whether Bernachez is to be followed or to be viewed as a judgment of very limited application.
