Ontario court rejects 24-month cap for notice period

1 month per year of service a reasonable amount even for longer-term employees, regardless of character of employment
By Ronald Minken
|Canadian Employment Law Today|Last Updated: 03/20/2013

The Ontario Superior Court of Justice has rejected a commonly-held belief that reasonable notice has a maximum amount, finding employees with longer periods of service could get larger amounts.

In Abrahim v. Sliwin, a motion for default judgment was brought by 31 employees of two sportswear retailers, Avon Sportswear and Shain Sportswear, and their owners, alleging they constituted a “common employer” and thus were jointly and severally liable for wrongful dismissal damages owing to them. The causes of action for wrongful dismissal damages arose when the business carried on by one or more of the owners was discontinued, and was, perhaps, sold to someone else. The employees were given inadequate or no notice, and no termination or severance pay. Sworn affidavits were filed by the employees describing the nature of their employment, their length of service, the circumstances of their layoff or dismissal, and their attempts at mitigation, including the disclosure of any amounts they earned in mitigation.

Counsel for the employees proposed a formula of one month’s pay for each year of service with a cap of 24 months, subject to mitigation. Each employee was employed in a non-managerial position, in a relatively unskilled job, at a low rate of pay. The court concluded one month’s pay per year of service was an untenable formula at law, citing the Ontario Court of Appeal decision in Minott v. O’Shanter Development Co. Additionally, the court rejected the employees’ argument that the Court of Appeal in Cronk v. Canadian General Insurance Co. “had established an upper limit of 12 months for non-managerial employees.” With respect to the 24-month cap proposed by the employees, the court held that “any such approach has now been rejected by the Court of Appeal in Di Tomaso v. Crown Metal Packaging Canada LP.”