Lengthy notice period justified
Toronto employment lawyer Anatoly Dvorkin agrees with a recent Ontario Superior Court decision that awarded an employee 26 months’ notice of termination, surpassing the traditional 24-month mark.
In Hussain v. Suzuki Canada Ltd., the court awarded Syed Hussain 26 months’ notice of termination after the long-standing employee of Suzuki Canada Ltd. was terminated, Lexology reports. Read Lexology
At almost 65, Hussain had 35 years of service and held the position of assistant warehouse supervisor, earning $48,790, the Lexology report says. He was terminated without cause on Feb. 15, 2011, and Suzuki argued the notice of termination should have been in the range of 12 to 18 months, the report continues.
But the Ontario court awarded Hussain 26 months’ notice of termination and ordered Suzuki to pay almost $20,000 in interest and costs, the report states.
The court held that there were “exceptional circumstances” that warranted lengthier than usual notice of termination, and while each factor on its own was not considered deserving of lengthier notice, the combination of the employee’s age, length of service and poor job prospects all amounted to exceptional circumstances, it says.
“One of the most important factors to note from this decision is that it establishes without a doubt that contrary to the assumptions of many employers, it cannot be presumed that an employee who has reached the age of 65 would be retiring in any event and therefore the employer can terminate without providing appropriate notice or pay in lieu of notice,” says Dvorkin, founding partner of D2Law LLP. “This attitude seems to have persisted amongst many Ontario employers despite the amendment to the Ontario Human Rights Code in 2006, which did away with mandatory retirement at age 65.”
For aging employees, it’s a reality that the risk of job loss increases “for the simple reason that as they age and become more experienced, they become more expensive and, unless they have unique skills or knowledge which are hard to replace, could be replaced by younger, less expensive employees,” says Dvorkin.
Ensuring performance doesn’t slip, documenting retirement plans and questioning poor reviews from managers are habits all employees should practise but are especially important for older employees, he adds.
For employers, it’s important to enter into contracts that limit entitlement upon termination to the minimum standards set out in the Employment Standards Act (ESA), says Dvorkin.
“Where an employer failed to do this or where such a contract is not practicable, an employer seeking to terminate the employment of a long-tenured employee who is not subject to an employment contract limiting entitlement on termination should try to negotiate a fair severance package with the employee, which exceeds the statutory minimums and obtain a release from the employee to ensure that the employee does not sue for wrongful dismissal,” he says. “At minimum, an employer should ensure that it complies with the minimum standards set out in the ESA so as to avoid the possibility of attracting punitive damages.
“Employers should also be aware that clauses purporting to require employees to retire at age 65 or any other age are contrary to law and will not be held up by the courts unless the employer can establish that the age in the mandatory retirement plan is a bona fide occupational requirement.”
Dvorkin says this case is noteworthy because of the long notice period, and he says where justified by exceptional circumstances, one can expect to see similar decisions in the future.
“There is no magic number or law that limits notice period to 24 months – it is a discretionary exercise that involves consideration of many factors, including length of service, age, position, the availability of similar jobs, etc.,” he says. “Where these factors conspire to make it very difficult for a dismissed employee to obtain comparable employment, I think courts will award more than 24 months’ notice on the basis of the existence of special circumstances.”
Another interesting point on this case, says Dvorkin, is the fact that the employer didn’t pay the employee the minimum standards required under the ESA.
“I am not sure whether the plaintiff sought punitive damages, but, it would seem to me that the actions of the employer in this case would have justified an award of punitive damages.”