Well…at least appeal courts in Ontario and Saskatchewan say it is.  Most recently in Saskatchewan per Caldwell J.A.:

[23]  As such, I conclude that the rule of thumb approach is neither doctrinally sound nor supported by the majority of cases. Accordingly, the trial judge’s rejection of the “one month’s notice per year of service” rule of thumb in this case follows logically from the approach required by Bardal and does not signal an error in principle.

Capital Pontiac Buick Cadillac GMC Ltd. and Sergio Coppola 2013 SKCA 80 (CanLII)

Last month we wrote a blog on the basics of reasonable notice assessment in Barometer Rising Alert: Reasonable notice and age.

After reading the Capital Pontiac decision, we did an internet search of “reasonable notice” and “rule of thumb” and despite hits clearly saying that the rule of thumb approach is gone, we were surprised to find some plaintiff-side commentary asserting that, as a general proposition, the rule of thumb method of calculation is generally accepted by courts.  That kind of on-line advice is questionable and here’s why:

  • An employee dismissed after 22 months of employment might read that and think he or she is entitled to just less than two years notice. Would he or she? A resounding “no” in the Saskatchewan case cited above where “length of service” was only a fraction of the sum of characteristics considered that resulted in an award of six months’ pay.
  • An employee dismissed after three and one-half years’ service was awarded 10 months’ pay in Ellerbeck v. KVI Reconnect Ventures Inc., 2013 BCSC 1253 (CanLII) based on a number of characteristics including that the employee was a Controller.
  • A management employee with 13 years’ service was awarded 18 months’ notice in Bernier v. Nygard International Partnership, 2013 ONSC 4578 (CanLII).
  • A managerial employee in Nova Scotia with 27 years’ service was awarded 18 months’ notice in Horechuk v. IMP Group 2012 NSSC 96 (CanLII).
  • An employee in New Brunswick with 25 years’ service was awarded 23 months’ notice in Doran v. Fredericton Direct Charge Co-Op, 2011 NBQB 293 (CanLII).

One thing is clear from these cases: the “rule of thumb” approach is largely a myth.

Where does this leave us?

There is nothing like a good reminder that employment law cases are context specific and assessed on an individual basis (i.e., the Bardal factors we talk about in our Barometer Rising Alert continue to be alive and well).  While tempting to use something like a “rule” for the purpose of predictability, we know that there is a lot more involved in assessing what reasonable notice might look like.  Especially when the parties are attempting to settle early and expectations are reduced in favour of an early settlement.  In reality, most wrongful dismissal actions are resolved well before a claim is started and the parties, at that time, tend to “discount” from what might be awarded by a court as recognition that the issues settled quickly without the time and cost involved in seeing a matter through the court process.  In those cases the settlement will not necessarily be based on what a court might award, but on what the parties can live with as being reasonable in the circumstances.

As a general rule, and as a general theme from us these days, nail down termination in an employment agreement at hiring.  If you don’t?  You’re probably going to be calling one of us.