Written by Michael J Weiler

Cabott v Urban Systems 2016 YKCA 4 BCCA (Yukon)

The essence of a wrongful dismissal action is the fact that the employer has terminated the employee without cause and without reasonable working notice. In the absence of a written enforceable agreement the court must decide what is reasonable notice. There are many myths around the rules. For example many (including some lawyers) believe that there is a legal formula for determining reasonable notice of one month for each year of service- that is simply nocorrect.

A court will look at 4 key factors to determine the period of notice: age, length of service, position, and the availability of similar alternate employment. It may, as well, take into account other factors such as inducement or tough economic conditions to extend the notice period (but such cannot be given “undue weight”).

Employers are often shocked to find that in the case of short service employees, a longer period of notice applies. For example:

(Case name, citation, position, age, length of service, notice period awarded by court)

Pakozdi 2016 BCSC 992, bidder/estimator, 55 yrs. old,  13 mos.  →  8 months

Saliken 2016 BCSC 832, mechanic, 54 yrs. old, 6 mos.   →  6 months

Kong 2015 BCSC 2015, senior pastor, unknown age, 34 mos.  →  12 months

Ramsay 2014 BCSC 1292, CAO, 66 yrs. old, 3 mos.  →  6 months

Haftbaradaran 2011 BCSC 1424, winemaker, 38 yrs. old, 2 yrs.  →  8 months

Mackie 2009 BCSC 1775, technician, 48 yrs. old, 2 yrs.  →  9 months

The Court of Appeal considered whether there was a minimum notice period of 6 months, but rejected that proposition:

Saalfeld  2009 BCCA 18, Territory Manager Software Sales (but not managerial or supervisory), $60,000 + bonus,  35 yrs old, 9 mos. service  →  5 months notice

In Cabott v Urban Systems 2016 YKCA 4, the BC Court of Appeal, sitting as the court of appeal of the Yukon, considered once again the issue of what is the appropriate notice period for a short term employee. The plaintiff was 53 years old at the time of trial and was employed by a company that provided planning services in the areas of water, transportation and communities with offices in Whitehorse and Vancouver. The plaintiff had been employed in Whitehorse for 13 months when she was terminated by the employer. She had hoped to advance within the company and be able to transfer and retire in Vancouver. The trial judge awarded her damages based on 6 months’ notice. The trial judge held:

However, when one considers also the plaintiff’s age of 53 years, the latter part of her career, the specialized professional skills, the expectation of secure employment and possible eventual transition of work and retirement to Vancouver, together with her role of senior and supervisory management in Whitehorse, I conclude an appropriate period of notice, in this case, is six months.

The Court of Appeal disagreed. It held that in applying the 4 factors noted above:

The application of these factors is not linear and is highly dependent on circumstances. In the context of short term employment, the ratio of the length of notice to the length of service is higher than it usually is in medium or long service situations, but at a reducing rate. There are, therefore, no formulas for determining the length of reasonable notice.

The appeal court held that the trial judge erred in taking into account the plaintiff’s unilateral expectation that she could ultimately return to Vancouver and awarded four months’ notice in place of six months’ notice. The Court of Appeal stated:

[20]        In my view, the judge erred in referring to an “expectation of … possible eventual transition … to Vancouver”. The evidence does not support a finding of a mutual expectation, or even a realistic possibility, of a move; it goes no further than describing Ms. Cabott’s desire to transfer to British Columbia, demonstrating her openness to such a possibility. To state it another way, there is no evidence that Ms. Cabott’s aspiration was consistent with the employer’s purpose in offering her employment, which was to advance its Whitehorse office by developing business in the Yukon and Northwest Territories. On the evidence, Ms. Cabott’s employment was geographically specific. Her hope of using the position to return to the Lower Mainland of British Columbia was in the realm of speculation.

[21]      This is an action in contract. That means that a unilateral life plan is outside the contract unless and until expressed in, or in some fashion brought within the employment relationship. It is possible that a promise of a move may have compensable value to an employee, for example when a promise induced the employee to leave a secure position. On its own, however, a unilateral life plan that is not reflected in the employment contract does not extend the parties’ rights or obligations.

[22]      I consider the judge erred in putting weight on the appellant’s desire to use this employment as a springboard to return to British Columbia. That being so, in my view the damage award wrongly compensates for a factor that does not admit of compensation.

[23]      For a short term employee the useful starting place in discussing range is the two to three months spoken of in Saalfeld and Hall. The only feature of this case that would extend that range (there being no special circumstances such as inducement, bad faith or a poor labour market) is a level of responsibility not present in those cases.

It is curious to me why an appellate court would so micromanage a notice period even if the trial judge may have considered factors that were not reasonable. What if the judge had found 8 months was reasonable-would the court have reduced it to 6 months? How did it find that the trial judge awarded 2 months for this irrelevant factor? Nevertheless this decision simply demonstrates the vagaries of a litigated notice period.

What should we take away from this case? Unfortunately there will still be a lot of guesswork in deciding what reasonable notice may be in any given case. Are the cases noted above no longer applicable? It is really difficult to say.

In my view the best takeaway is what we have preached for many years. Employers should create certainty for both the employer and employee and eliminate the need for battling lawyers at the termination of an employment by having a written, enforceable, clear agreement on the rights of the employee upon termination without cause.