The pandemic has created challenges for employers and employees, in some cases resulting in layoffs and terminations. One year into the pandemic, we are beginning to see the courts address the impact of the pandemic on the assessment of employees’ entitlement to reasonable notice of termination. This has been so even in cases where the pandemic was not the cause of the termination.
A recent decision of the BC Supreme Court, Mohammed v. Dexterra Integrated Facilities Management,[1] is the first BC case in which the court has considered the impact of the pandemic on a terminated employee’s notice entitlement. At issue in the Mohammed case was the termination of a 51-year-old, non-managerial employee with 17 months of service, shortly before the onset of the pandemic. The case is interesting for its consideration of the impact of the pandemic on notice periods and mitigation, but it also offers an opportunity to review the factors which determine entitlement to reasonable notice in the absence of cause for termination. These four “Bardal” factors are:
1. the character of the employment,
2. the length of service of the employee,
3. the age of the employee, and
4. the availability of similar employment.[2]
These factors are to be considered in light of the purpose of the notice period; namely to bridge the gap between termination and securing new employment.[3] Determining reasonable notice is thus a contextual exercise, something which becomes particularly relevant when the context is aggravated by circumstances such as a severe economic downturn or, as currently, a pandemic.
Much can be said about each of the four Bardal factors. However, in this newsletter we will examine them in the context of the Mohammed case and the impact of the pandemic.
1. Character of the employment
This first factor refers to the status and degree of responsibility of the employee’s position. One aspect of this factor has been a traditional distinction between non-managerial/clerical positions on the one hand and managerial/executive positions on the other hand. Previously, courts were prepared to presume that non-managerial positions were easier to come by and that such employees would have less difficulty finding new employment than employees in managerial or executive level positions.[4] This proposition was generally accepted by the courts without specific evidentiary proof. On this basis, the courts imposed a rough upper limit of 12 months reasonable notice for clerical/non-managerial employees and 24 months for managerial/executive positions.
However, this distinction based on character of employment is no longer accepted without a specific evidentiary basis to support the distinction.[5] Presumptions about re-employability cannot be made based purely on character of employment.
At the same time though, character of employment remains a relevant factor in the determination of reasonable notice in B.C.[6] The result is a nuanced situation, with the current status of character of employment in the assessment of reasonable notice being:
(a) the character of employment must not be given undue weight in the Bardal analysis;
(b) presumptions about its impact on re-employability and transferability of skills must not be made without an evidentiary foundation; and
(c) character of employment nevertheless remains a relevant factor such that ”all other things being equal, the cases recognize increased seniority and responsibility as considerations warranting an increased notice period.”[7]
The bottom line is that it should not be assumed that the non-managerial nature of an employee’s work will significantly detract from their notice entitlement.
The effect of this development in the law on character of employment was reflected in the Mohammed case, where the plaintiff was employed as a supervisor of cleaning staff for only 17 months. The court agreed that this was a non-managerial position without the authority to hire, fire, discipline or be involved with payroll but refused to give undue weight to this factor and awarded the plaintiff five months notice.
2. Length of service of the employee
In general, the longer the employee’s service, the greater the employee’s entitlement to notice of termination. However, in the case of short service employees, the courts will give less weight to length of service. Thus in Mohammed, although the plaintiff was a short service employee with only 17 months’ service, he was awarded five months notice. The court noted that “[l]ength of service is less of a predominant factor where the job tenure was relatively short…”.[8] Though it may seem counter intuitive, this approach can be understood by keeping the purpose of the notice period in mind, which is to bridge the gap between dismissal and new employment.
3. Age of the employee
Generally, courts draw the inference “that persons in their late 50s and 60s may expect to have greater difficulty finding alternate employment” and that it is “a matter of common sense” that “such persons have fewer years of service to offer prospective employers”.[9] But the nature of this third Bardal factor was heavily disputed in Mohammed. The employer there argued that the plaintiff’s age of 51 should not be the basis for a longer notice period and that a “modern approach” should be adopted whereby age only justifies a longer notice period in cases where the terminated employee is at or close to age 60. The court rejected this proposition citing Supreme Court of Canada comments on the relation of age to employment issues. The court also relied upon an article which statistically analysed appellate decisions regarding the effect of age on reasonable notice awards. The analysis found that in the case of employees age 50 and over, appellate courts awarded an average of three additional months of notice.[10] The article explains that this “undoubtedly reflects a judicial recognition that older employees face a difficult job search following dismissal”.[11]
4. Availability of similar employment
This fourth and final Bardal factor, availability of alternative employment, was not separately addressed in Mohammed but was considered under the heading of mitigation. Presumably that was because the plaintiff’s employment was terminated prior to the pandemic and thus it impacted his ability to mitigate his losses by searching for new employment.
The employer in the Mohammed case was unable to convince the court that the plaintiff had failed to properly mitigate his damages. The court noted that the plaintiff’s “evidence that the COVID-19 pandemic has negatively affected his ability to find work is… unchallenged” [12] and accepted that the COVID pandemic impacted the issue of mitigation.
Ontario Developments
The Ontario Superior Court has provided more guidance on the potential impact of the COVID-19 pandemic on terminated employees and has addressed a number of points. The first rests on the legal principle that the reasonable notice an employer owes a terminated employee is to be determined as of the date of the termination. As a result, unless the termination date actually occurs during the COVID pandemic, the later occurrence of the pandemic is not relevant to an assessment of reasonable notice.[13] That is irrespective of the fact that the employee may have aggravated difficulties in finding alternate employment as a result of the subsequent onset of the pandemic.
Arguments may also be raised that a termination date early in the pandemic should not accord the pandemic a great deal of impact on the availability of alternate employment for the terminated employee (the fourth Bardal factor) as the ultimate impact of the pandemic at that time would have been “highly speculative” and the “principle of reasonable notice is not a guaranteed bridge to alternative employment”.[14] The court thus noted that it “must be alert to the dangers of applying hindsight to the measuring of reasonable notice at the time when the decision was made to part ways with the plaintiff.”[15] It further noted that mitigation is different in that it deals with “the actual efforts of the plaintiff in the actual circumstances he then faced.”[16]
There is however comment by the Ontario Superior Court in Yee v. Hudson’s Bay[17] that termination during the pandemic may increase the notice period because of its negative impact on finding alternate employment. It remains only comment and not a determinative part of the decision because the date of the termination of the employee in that case was prior to the pandemic. Nonetheless, it is potentially significant and something the parties to a termination of employment should be alert to. It also seems to be the kind of point that a court might be prepared to take into account without a specific evidentiary basis (as with the age of the employee).
The most recent dismissal decision addressing the impact of the pandemic, however, takes the opposite position. In Marazotto v. Dell Canada Inc., [18] the Ontario Superior Court held that a terminated employee seeking a longer notice period must provide actual evidence of an alleged economic downturn caused by the pandemic. That was particularly so in the facts of the case as the employee’s skill set may have become more desirable during the pandemic with greater reliance being placed on computers for remote work.
Significance of these matters
Both employers and terminated employees need to be aware of these Bardal factors. Some factors may seem counter intuitive in certain circumstances – for instance, the length of service and character of employment. The approach to other factors may continue to come under attack – as with age – or be subject to an unfolding set of decisions – as with the courts’ determinations of the impact of the pandemic on the availability of alternate employment.
As well, it is important to remember that reasonable notice cases are determined on past precedent. While each case is unique, our courts have noted the need to treat “like-cases alike” having regard to recent British Columbia case precedents.[19] To this end, these developments in the application of the Bardal factors need to be monitored and canvassed in each case.
[1] Mohammed v. Dexterra, 2020 BCSC 2008, at paras. 35-36 and 48-52
[2] Bardal v. Globe and Mail Ltd., (1960) 24 D.L.R. (2d) 140 at 145 (Ont. H.C.).
[3] Shinn v. TBC Teletheatre BC, 2001 BCCA 83, (“Shinn”) at para. 16.
[4] Cronk v. Canadian General Insurance Co. (1995), 128 D.L.R. (4th) 147 (Ont. C.A.); Desaulniers v. Wire Rope Industries Ltd. (1995), 10 CCEL (2d) 267 (B.C.S.C.).
[5] Bramble v. Medis Health and Pharmaceutical Services Inc. (1998), 175 D.L.R. (4th) 385 (NBCA), which has been cited frequently by B.C. courts on this point.
[6] Corey v. Kruger Products L.P., 2018 BCSC 1510 (“Corey v. Kruger Products”), relying upon Burry v. United Communications Inc. (1997), 46 B.C.L.R. (3d) 349 (C.A.).
[7] Corey v. Kruger Products, para. 25.
[8] Mohammed v. Dexterra, para. 34.
[9] Corey v. Kruger Products at para 47
[10] Mohammed v. Dexterra, paras. 37-45.
[11] Mohammed v. Dexterra, paras. 42-45, citing Professor Kenneth W. Thornicroft, “Severance Pay and the Older Worker: Negotiated Versus Litigated Outcomes Under Canadian Common Law” (2015) 52:4 Alta. L. Rev. 779, at 796.
[13] Yee v. Hudson’s Bay Company, 2021 ONSC 38 7, paras. 21-22
[14] Iriotakis v. Peninsula Employment Services Limited, 2021 ONSC 998, para. 19
[17] Yee v. Hudson’s Bay Company, 2021 ONSC 387, para. 22.
[19] Saal v. Absolute Software Corp., 2009 BCCA 18, at para. 14; Bishop v. Rexel Canada Electrical Inc., 2016 23 51, at paras. 74 and 83
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