We recently became aware of an interesting Ontario Superior Court decision, decided earlier this year, where the Court awarded the Plaintiff an extra 1.5 months of reasonable notice because his employment was terminated in the month of June.
The Court stated:
…I find that for a man of Mr. Fraser’s age and level of responsibility but relatively short years of service, I must also account for the time of year when his employment was terminated in assessing reasonable notice. Mr. Fraser’s employment was terminated in June and it was quite foreseeable that hiring decisions at his level might have needed to be delayed somewhat due to the summer months in order to account for vacation schedules of key decision-makers…Having regard to the totality of circumstances, I find that 4.5 months is a reasonable period of notice for the termination of Mr. Fraser’s employment with the defendant. Absent my consideration of the potential negative impact of the summer break on Mr. Fraser’s job prospects, I should have awarded a somewhat shorter period of notice (three months).
This decision provided a 50% increase in the length of the notice period because Mr. Fraser was terminated in the month of June! While we will continue to recommend to employers that employees not be terminated on their birthdays (or Christmas), we do not believe that this decision means that employers should necessarily avoid terminations in the summer months. Rather, it is better used as a reminder of the following:
- Employers can require employees to execute employment agreements that limit them to their minimum notice entitlements under the Alberta Employment Standards Code(the “Code”). This provides certainty around termination costs (hopefully avoiding expensive litigation) and makes the month of termination irrelevant;
- Employers can also require employees to execute employment agreements that provide pre-determined notice entitlements above the statutory minimums. A pre-set notice period would provide for certainty around termination costs but also allows an employer to require employees to execute releases in exchange for such payments; and
- In both scenarios, it is important for an employer to have a properly drafted severance clause. As we have noted in our previous posts, these types of clauses are very technical and need to be drafted with precision, to avoid unintentionally violating the minimum standards of the Code.