How will the courts factor COVID-19 into determining severance?

The well-established factors that must be taken into consideration when assessing the amount of notice that a without cause terminated employee is entitled to include:

• age of the employee;
• nature of the employment;
• length of the employment; and
• availability of similar employment having regard to the experience, training and qualification of the employee.

It is this last factor that has sparked debate amongst lawyers acting for both employees and employers since the pandemic began. The pandemic has wreaked havoc on our economy, with many industries struggling and many people losing their jobs. Not only does that have the potential for making it more difficult for a dismissed employee to find a new job, it also makes it very difficult for employers to pay substantial severance. Lawyers have pondered whether that slowed economy will result in increased notice periods due to potential unavailability of similar employment.

The Ontario Superior Court of Justice has recently provided reasons in one of the first termination cases decided since the pandemic began. The case of George v. Laurentian Bank Securities Inc., 2020 ONSC 5415 considered the claim of a short term, senior employee following his without cause dismissal  Mr. George was hired as Vice President of Equity Trading in November 2018. After five months of employment he was dismissed without cause. He was 58 years old at the time of his termination and earning a salary of approximately $100,000. The case went to trial more than a year after the termination and at that time Mr. George remained unemployed. Mr. George argued that he should be entitled to no less than 12 months’ notice based on the senior level of his position.

The court undertook an analysis of the true nature of Mr. George’s position, ultimately concluding that the title alone was not sufficient to make him a member of the senior management team or an executive  After analyzing his specific duties, the court concluded that Mr. George was not senior management, nor was he an executive. Specifically, the court referred to the fact that Mr. George did not have any role in supervising co-workers in his department, he was not responsible for the oversight or strategic direction in his department, many employees had the same title and he was three levels removed from the executive team.

The court concluded that Mr. George should have been provided with two months’ notice.  In arriving at this conclusion, the court focused on Mr. George’s age, stating:

At the age of 58, Mr. George’s job opportunities are less promising than for a younger person with his experience, training and qualifications, as might be suggested by his inability to obtain new employment over the past 15 months.

The court made no mention of the pandemic and the resultant slowed economy or the role that this may have on Mr. George’s re-employment opportunities, thus not resolving the ongoing debate as to whether the pandemic will be a factor that increases notice periods. The biggest take away from this decision is that the court will focus on the true nature of employment rather than the title given to the role.

This update was authored by Rose Keith. Looking for more information regarding similar issues? Contact Rose at rkeith@harpergrey.com or anyone else listed on the authors page.