May 30, 2012
In the recent Ontario Superior Court case Hussain v. Suzuki Canada Ltd., a 35 year employee of Suzuki was awarded 26-months severance. This 26-month notice period is two months beyond what has been generally accepted as the upper threshold of reasonable notice upon termination of employment under the common law.
In the earlier case of Lowndes v. Summit Ford Sales Limited, the Ontario Court of Appeal stated that there is no express cap on the amount of reasonable notice upon termination to which an employee may be entitled, since each case must be considered on its own merits. The court acknowledged however, that 24 months is usually in the higher range unless there are exceptional circumstances.
The Suzuki case gives us a glimpse into what one court has deemed to be such “exceptional circumstances.”
In Suzuki, the court applied the well-known factors from Bardal v. Globe & Mail Ltd. Although the analysis of each factor on its own was not exceptional per se, the court held that the combination of all the factors amounted to the kind of exceptional circumstances that warrant a 26-month notice period.
The factors considered were as follows:
The employee’s case was further bolstered by the fact that he had made efforts to mitigate his losses almost immediately. He began searching for a new job only 3 weeks from the date of termination of his employment; to which the court commented “[i]t is frankly remarkable that, in his circumstances, the plaintiff was able to organize himself so quickly”. As such, the court therefore did not reduce its finding of reasonable notice for lack of mitigation.
In addition, despite the fact that the 26 month notice period had not expired, it is worth noting that the award was made payable via lump sum and the court only reduced the award by 2 weeks in consideration of the 1% likelihood that the employee would find a job before the end of such period.
Employers should consider this case an example of circumstances where the court will award a higher than usual notice period to terminated employees with a long service record who face limited prospects of employment. As such, where faced with the prospective termination of a long-standing employee, employers should explore their options well in advance before taking any steps towards termination so as ensure the best and most creative approach.