Source: https://nelliganlaw.ca/blog/employment-law/cap-or-no-cap/
Timestamp: 2019-04-22 00:12:23+00:00

Document:
February 19, 2014 Cap or no Cap?
Unless the employment agreement stipulates otherwise, when an employee is terminated without cause, and without being afforded a reasonable notice period, or pay in lieu thereof, they are entitled to an award of damages at common law. This requires a court to compensate the employee for the amount of time that would reasonably be required to find alternate employment.
While this determination is not subject to any fixed formula, and is highly fact-specific, the case law does provide some guidelines. The character of the employment, the employee’s length of service, their age and the availability of similar employment (having regard to the experience, training and qualifications of the employee), will be used in determining the appropriate notice period (these are known as the Bardal factors). These factors are applied on a case-by-case basis, and no one factor should be weighed disproportionately.
With these factors in mind, courts have in the past, placed a cap of 12 months of reasonable notice for clerical and unskilled employees, whereas a cap of 24 months was generally placed for everyone else, including the most senior employees. However, the courts have since deemed an employee's "character of employment" to be a factor of declining relative importance, and as such the Ontario Court of Appeal has rejected the existence of a 12 month cap in Di Tomaso v. Crown Metal Packaging Canada LP. The same court has also rejected the existence of a 24 month cap for senior employees, but also specified that generally only exceptional circumstances will support a base notice period in excess of 24 month (Lowndes v. Summit Ford Sales Ltd.).
In the case of Baranowski v. Binks Manufacturing Co., the Ontario Superior Court awarded the plaintiff 30 months for reasonable notice. The employee was 54 years old when terminated, had been employed for over 29 years and held the position of senior executive for the last 15 years of his employment. He stayed in Canada after the expiry of his original contract based upon assurances that he would be employed until his retirement. The trial judge considered these assurances to rise to the level of an exceptional case.
Not all courts, however, require the finding of an exceptional case before awarding more than 24 months of reasonable notice. When an employee is terminated at an older age, after having worked several decades for the same employer and holding a senior position, a court may also be just as inclined to award more than 24 months. See for example Cowper v. Atomic Energy of Canada Ltd., where the Ontario Superior Court of Justice awarded the terminated employee 27 months of reasonable notice. The employee was 60 years of age when terminated, had been employed for 35 years with his employer, and was the Director of Government relations on the date of his dismissal. See also Cardenas v. Kohler Canada Co., where one terminated employee was awarded 26 months of reasonable notice even though he was only 43 years old at the time of his dismissal, was employed for 27.5 years and had held the position of shift supervisor for over 10 years, being responsible for up to 65 employees. Again, no exceptional circumstances were given as a reason for such an outcome.
A trial judge must weigh and balance a list of relevant factors in determining a reasonable notice period for a terminated employee. Even though this period will be based on the facts of each particular case, the courts have made it clear there is no absolute upper limit or cap on what constitutes reasonable notice. Where exceptional circumstances exist, or where an employee scores high on the Bardal factors, a court will be inclined to support a base notice period in excess of 24 months. Therefore, a terminated employee should not limit their request for reasonable notice to 24 months, as did some of the employees in Abrahim et al. v. Sliwin et al., because a court may otherwise have awarded a higher amount. Had the two plaintiffs who worked in a non-managerial capacity for one or more of the defendants for at least 35 years and were 63 years of age or older requested it, the judge "might have decided to award more than 24 months" pay had such a request been made."

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