With the Covid-19 pandemic dragging on, employers have to resort to restructuring and downsizing their business operations to stay afloat in this harsh economic weather. Thus, a large number of employees are terminated and have to look for new employment. In this way, it becomes a critical issue whether the Covid-19 pandemic have an impact on the common law reasonable notice period when the terminated employees commence a proceeding against their former employers for wrongful dismissal at the court.
The recent court decision in Yee v. Hudson’s Bay Company, 2021 ONSC 387 has shed some light on this aspect. The Court ruled that if the employee’s termination occurred after the start of the Covid-19, the pandemic will serve to increase an employee’s entitlement to a longer common law notice period.
In this case, the Plaintiff Mr. Melvin Yee was terminated by his former employer Hudson’s Bay Company (HBC) on August 28, 2019. At the time of termination, Mr. Yee was 62 years of age and had a working history with HBC for over 11 years. He was employed as Director of Product Design and Development.
The Relevant Factors
Mr. Yee’s employment contract with HBC did not contain a valid and enforceable termination provision, which entitled him to the common law reasonable notice period.
The Court fully considered the four Bardal factors in assessing Mr. Yee’s common law reasonable notice period, which are
- Length of service;
- Character of employment;
- The availability of similar employment having regard to the experience, training and qualifications of the employee.
The Court ruled that Mr. Yee’s age and character of employment “favored a longer notice period” while his length of service was “neutral to somewhat favoring a longer period”.
With regard to the “availability of similar employment”, the Court acknowledged the decision of Paquette v. TeraGo Networks Inc., 2015 ONSC 4189 that “economic factors such as a downturn in the economy or in a particular industry or sector of the economy that indicate that an employee may have difficulty finding another position may justify a longer notice period”. However, the Court also empathized that this reasonable notice is to be “determined by the circumstances existing at the time of termination and not by the amount of time it takes the employee to find employment”.
Mr. Yee was terminated on August 28, 2019, which is approximately seven months before the pandemic began in Ontaro. Therefore, the Court ruled that the Covid-19 pandemic was not a relevant factor in this case, as Mr. Yee’s termination occurred before the onset of the pandemic.
Based on the four Bardal factors, the Court awarded 16 months’ notice to Mr. Yee.
Key Takeways For Employers And Employees
For employers, it is advisable for them to review the employment contracts with an lawyer to see if there are valid and legally enforceable termination provisions in place, which can limit their employees’ termination and severance pay to the Employment Standards Act minimums. They also need to prove that the industry has not severely affected by the Covid-19 pandemic so that it is not difficult for the terminated employees to find alternative employment.
For employees, this case serves as a reminder of the importance to consult a lawyer after getting terminated. With the help of a lawyer, they will get to know whether the termination provisions in their employment contract are valid and enforceable and whether they are entitled to a longer common law notice period due to the Covid-19 pandemic.
If you are experiencing any issues in connection to your employment during the Covid-19, Top Toronto employment lawyer, Stacey ball can help you determine your legal options. Please call us at 416-921-7997, extension 227.