Executive gets 12 months notice — after 18 months of employment

Factors such as importance of position, age of employee and scarcity of similar work raise reasonable notice requirement
|employmentlawtoday.com|Last Updated: 08/28/2014

An Ontario executive has been awarded one year’s pay in lieu of notice for dismissal after only a year-and-a-half of employment.

Joe Felice, 52, was the vice-president of operations and information technology for Futuremed Health Care Products, a distributor of medical and surgical products based in Concord, Ont. He was hired in April 2011 with an employment contract that had a dismissal clause stating if he was fired without cause, he would receive 12 months’ pay.

In February 2012, Futuremed was sold to another company. Felice remained employed with the company, though his job and compensation changed. He signed a new employment agreement that didn’t have a specific severance provision.

In December 2012, Felice’s employment was terminated. He sued for wrongful dismissal, arguing he was entitled to the 12 months’ notice stipulated in the original employment contract.

The Ontario Superior Court of Justice disagreed with Felice’s argument, finding the contract he signed in February 2012 was a completely new contract that replaced the original one under the old owners. Therefore, the original severance provision didn’t apply.

However, the court took into consideration the fact that Felice was in an important position, he was older, and it was unlikely he would be able to find a similar position quickly. The latter was borne out by the fact Felice had yet to find a new job — 14 months after his dismissal. The court noted that notice or pay in lieu of is supposed to bridge the gap between dismissal and finding a new job — which can be a significant gap for hard-to-find executive positions.

Despite the fact Felice had worked for Futuremed and its successor company for only 18 months, the court awarded him damages equal to 12 months’ pay, totaling $130,000.

For more information see:

Felice v. Cardinal Health Canada Inc., 2014 CarswellOnt 8419 (Ont. S.C.J.).

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