Absent exceptional circumstances, the maximum notice period is 24 months.
It is widely recognized that a 24-month notice period represents the upper limit of an award for reasonable notice for long-term employees. While there is no absolute upper limit, the employee will need to present exceptional circumstances to support a notice period exceeding 24 months.
In Dawe v. Equitable Life Insurance Company of Canada, the Ontario Court of Appeal considered an employee’s entitlement to notice and whether the trial Judge’s award of a 30-month notice period was appropriate in the circumstances.
At the time of termination, the employee was 62-years-old and employed as a Senior Vice President. He had worked for the employer for 37 years. He had received several promotions during his employment. Following his termination, the employee refused to sign a Release and was paid his minimum entitlements under the Employment Standards Act. The trial Judge held that the employee was entitled to a 30-month notice period. In arriving at this decision, the Judge did not follow the traditional line of authority and instead based the decision on broader social factors including a change in society’s attitude regarding retirement.
The Court of Appeal reversed the trial Judge’s decision and reduced the notice period to 24 months, stating that the Judge’s approach to reasonable notice was wrong. First, there was no basis for relying on his own perceptions of the changes in society regarding retirement. Second, relying on the abolishment of mandatory retirement in Ontario should not change the Court’s
traditional approach to determining reasonable notice.
The Court of Appeal agreed with the trial Judge’s conclusion that the employee’s senior position, significantly long period of employment, age at termination, and difficulty in finding new employment justified a substantial notice period. However, these factors did not reflect exceptional circumstances and could not support a notice period greater than 24 months.
Takeaway: the Ontario Court of Appeal does not provide guidance in determining what constitutes an exceptional circumstance. However, in confirming that lengthy service and the employee’s age will not be considered exceptional circumstances the court does tell us what not to focus on.