Written by Michael J Weiler

As most readers will know, the essence of a wrongful dismissal lawsuit is a claim that the employer, absent a binding written agreement limiting its liability, terminated the employee without just cause and without “reasonable working notice”. The employee claims damages for lack of working notice. If the claim is proven, the court will put the employee in the same position financially as she would have been in if she had received reasonable working notice subject to reduction for mitigation.

The Supreme Court of Canada has confirmed that the 4 basic criteria for determining what is reasonable notice are as stated in Bardal v Globe & Mail, a 1960 decision out of Ontario:

In determining what constitutes reasonable notice of termination, the courts have generally applied the principles articulated by McRuer C.J.H.C. in Bardal, at p. 145: There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.

[29] These four factors were adopted by this Court in Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986. They can only be determined on a case-by-case basis.

These 4 factors are not exhaustive as other factors such as economic conditions or inducement might influence the notice period, but clearly these 4 criteria remain the most important.

Over time the courts in Canada have found that there is a “rough upper limit” for the notice period of 24 months. Recently an Ontario decision held that 27 months’ notice was reasonable. In Markoulakis v SNC-Lavalin Inc., 2015 ONSC 1081, the court held that there were exceptional circumstances to make an award beyond the usual maximum of 24 months. The employee was a civil engineer who had been employed for nearly 41 years and was 65 years old when he was terminated. The court found that 27 months was a reasonable notice in these circumstances and noted among other things that “the Plaintiff is over 65, has more than 40 years of service with the Defendant, his only employer [and] is in my view exceptional”.

Given the aging workforce and the fact that many established companies are letting go of long service employees with greater frequency, the question is, will BC Courts make 27 months the new “rough upper limit”? The matter should be of concern to employers as adding an extra 3+ months can amount to a very large damage award. Many senior executives earn substantial compensation in the form of salary, bonuses and stock options so adding 3 months might well add $100,000 + to the damage award. As well it is clear that “a rising tide raises all ships” so raising the upper limit would necessarily increase all awards. We have seen this for example in human rights cases where damages for hurt feelings have skyrocketed from $3,000 or so to the now new upper limit of $50,000 in some cases.  In my view, the good news for employers is that the BC Courts will likely maintain 24 months as the very high end of the notice range and will not begin creating exceptions such as Ontario has done.

The question of the “rough upper limit” was considered by the BC Supreme Court in Ansari v. B.C. Hydro & Power Auth., 1986 CanLII 1023 (BCSC). While there will be some anomalous exceptions the 24-month ceiling will likely apply in almost all cases. Chief Justice Alan McEachern summarized the law in BC as follows:

[37] But the law is also clear that there is a “rough upper limit” for the notice period which has lately been substantially increased as in Suttie where a period of 24 months was approved for a 58-year-old employee who had exercised senior management responsibilities and had served his employer for 39 years, and in Sorel v. Tomenson Saunders Whitehead Ltd., [1985] B.C.W.L.D. 4260, B.C.S.C. Gibbs J., Vancouver No. C837279, dated 24th October 1985 (not yet reported), where a 60-year-old senior executive with 37 years’ service was awarded 30 months. [Editor’s note: This latter decision was overturned by the BCCA substituting 24 months’ notice for the 30 months’ notice awarded by the trial judge: see Sorel v Tomenson 1987 CanLII 154 (BCCA).]

[38] In other words, the law seems to place a cap of reasonableness upon the notice period and does not compensate a discharged employee to retirement age, whatever that may be, even if there is no likelihood of alternative equivalent employment. I believe this is because:

(a) such a law would amount to a guarantee of lifetime income;
(b) it would fix the employer with all responsibility for the lack of employment opportunities; and
(c) the law presumes that no employer would accept such an onerous responsibility at the time of engagement.

[39] Subject, therefore, to exceptional cases such as Suttie and Sorel [Editor’s note—See above reversal] where the degree of responsibility, age and years of service were very extensive, it seems to me that 18 to 24 months is the rough upper limit for reasonable notice, and other cases should be scaled downward from there unless there are extenuating circumstances which cannot all be enumerated in this crude attempt to provide guidance for the settlement of the many cases still outstanding.        …

[41] At the end of the day the question really comes down to what is objectively reasonable in the variable circumstances of each case, but I repeat that the most important factors are the responsibility of the employment function, age, length of service and the availability of equivalent alternative employment, but not necessarily in that order.

[42] In restating this general rule, I am not overlooking the importance of the experience, training and qualifications of the employee but I think these qualities are significant mainly in considering the importance of the employment function and in the context of alternative employment.

[43] What all this means, in my view, is that the general statement of factors quoted above from Bardal are the governing factors, and it would be better if other individual or subjective factors had not crept into the determination of reasonable notice. In my view, such other matters are of little importance in most cases.

[44] I turn to a consideration of the individual cases [of the separate actions of the four plaintiffs against the defendant for damages for wrongful dismissal which were tried summarily together under R. 18A.]

Mindful of the foregoing reasons of the then Chief Justice, I look to the following recent cases as support for my conclusion that the 24-month maximum will remain the law in BC:

  • Liborion v IBM 2015 BCSC 1523 –  Technical Services Professional, $63,000 p/a, 57 yrs old, 32 yrs service = 20 months notice
  • Johnson v Marine Roofing 2015 BCSC 472 – Service Mgr, $144,000 p/a,  65 yrs old, 24 yrs service = 24 months notice
  • Younger v CNR 2014 BCSC 1258  – Asst. Superintendent, $96,000 p/a, 50 years old, 32 yrs of service  = 24 months notice
  • Hooge v Gillwood 2014 BCSC 11-  Production Supervisor, $82,000 p/a, 57 years old, 36 yrs of service = 18 months notice
  • McBrearty v Cerescopr, 2009 BCJ 1843 – President, $300,000+ p/a, 70 years old, 39 yrs of service  = 24 months notice