The Ontario Court of Appeal recently upheld reasonable notice periods in excess of 24 months for two long-service and highly specialized employees. The two recent decisions highlight the exceptional circumstances that may warrant common law notice in excess of the conventional cap of 24 months.
Former Avaya Employee Awarded 30 Months’ Notice
In L v. Avaya Canada Corporation, 2023 ONCA 696, the Court held that a 64-year-old Professional Engineer with 38.5 years of service had exceptional circumstances that warranted a 30-month notice period.
The motion judge did not specifically outline the exceptional circumstances, instead engaging in a holistic analysis of the relevant Bardal factors. However, the Court of Appeal clarified and outlined the specific exceptional circumstances that entitled the Plaintiff to a higher notice period. Those factors were:
1) The Plaintiff specialised in the design of software to control unique hardware manufactured by Avaya at its Belleville facility
2) It was uncontested that the Plaintiff’s job was unique and specialized, and that his skills were tailored to and limited by his very specific workplace experience at Avaya
3) During his lengthy employment of 38.5 years, The Plaintiff developed one or two patents each year for his employer
4) Avaya identified The Plaintiff as a “key performer” in one of his last performance reviews
5) Although similar and comparable employment would be available in cities such as Ottawa or Toronto, such jobs would be scarce in Belleville where The Plaintiff – who was approaching his 64th birthday – had lived throughout his employment.
The appeal was dismissed.
Former IBM Manager Awarded 27 Months’ Notice
In M v. IBM Canada Ltd., 2023 ONCA 702, the Court held that a 62-year-old managerial employee with 38 years of service had exceptional circumstances that warranted a 27-month notice period.
The evidence established that the respondent’s skills were not transferrable because they related, almost exclusively, to the appellant’s products. This was found to be an exceptional circumstance.
The Court also found that an additional month of notice, bringing the total to 27 months’ notice, was appropriate to reflect the circumstances of the COVID-19 pandemic. The Court of Appeal found that the pandemic was a truly exceptional circumstance, and the respondent lost his position right at the time the global economy was shutting down.
The appeal was dismissed.
The finding that specialized and/or difficult-to-transfer skills warrant a finding of exceptional circumstances for older and long-service employees has previous support in the case law.
In Currie v. Nylene Canada Inc., 2022 ONCA 209 an award of 26 months was upheld due to the Plaintiff’s specialized and difficult-to-transfer skills:
— Ms. Currie had very specialized skills making it very difficult for her to find alternative suitable employment. Moreover, at the time of her termination, her computer skills were limited. She made diligent efforts to attempt to gain basic computer skills and mitigate her damages but the trial judge was not convinced she would succeed in securing alternative employment;
— The work landscape had evolved significantly since Ms. Currie had entered the workforce in 1979 and, as her experience was limited to working for Nylene and its predecessors in one manufacturing environment, her skills were not easily transferable.
In Dussault v. Imperial Oil Limited, 2018 ONSC 1168, affirmed 2019 ONCA 448, 26-month notice periods were awarded to two employees as, among other factors:
— The employees would have difficulty finding similar employment due to the relatively high compensation they had previously received and their specialization in having worked only for one employer.
The Avaya and Milwid decisions reiterate that specialized and difficult-to-transfer skills could lead to a finding of exceptional circumstances. However, the decision in Avaya also confirms that the Court of Appeal will show deference to the trial judge’s decision to award notice in excess of 24 months for highly specialized individuals. The Court of Appeal explains that:
” Those factors provided the requisite support for the trial judge’s determination that the Plaintiff’s circumstances were “exceptional” and justified an award of damages in lieu of reasonable notice based on a notice period in excess of 24 months. Given that the question of reasonable notice is one of mixed fact and law, in the circumstances of this case we do not consider the motion judge’s determination of the notice period as resting on palpable and overriding error. Accordingly, we are not persuaded by this ground of appeal.”
For employers, these decisions reaffirm that they should carefully consider their litigation strategy when dismissing older and long-service employees who have specialized and non-transferable skills. When these factors are present, the Court of Appeal has stated that a finding of exceptional circumstances will be possible. The Court of Appeal will also give deference to trial judges’ decision-making when it comes to notice periods that involve exceptional circumstances.
This article was written by Thomas Perry. Thomas is licensed by the Law Society of Ontario and is an Employment Lawyer at Monkhouse Law.
Monkhouse Law is an employment law firm located in Toronto focusing on employees’ issues. Please contact us at 416-907-9249 or fill out this quick form for a free 30-minute phone consultation.