Common Law Reasonable Notice: Who Is Entitled?achkarlaw-admin
When a business terminates an employee without a reason or cause, it must give the employee notice. The employer may expose themselves to liability if they do not provide sufficient notice.
There are generally two types of notice – the minimum statutory notice under the Employment Standards Act, 2000 (ESA), and common law reasonable notice. Common law reasonable notice includes the minimum entitlements under the ESA but provides for more notice or severance.
What is common law reasonable notice? How is reasonable notice calculated? What can you do if you are not provided your reasonable notice? This article answers these questions and explains how an employment lawyer can help.
What is Common Law Reasonable Notice?
Notice of termination is an advanced warning of an employer’s intention to terminate an employee. The notice period is meant to give an employee enough time to find a comparable role. What is considered “reasonable” depends on the circumstances.
Courts consider several factors when deciding how much reasonable notice is sufficient for any specific employee. An employee may not be entitled to common law reasonable notice when their employment agreement limits an employee to their statutory minimums on termination under the ESA or explicitly indicates what constitutes “reasonable notice” for termination.
An employer has three options when providing reasonable notice:
- Working notice, where an employee continues to work for the length of their reasonable notice period;
- Pay in lieu of notice, where an employer pays the employee as if they were working for the notice period, but dismisses them immediately from the workplace itself; or
- A combination of both working and pay in lieu of notice. An employer can offer working notice – where an employee continues to work during their notice period. An employer can also offer payment in lieu of notice. An employer may also offer a combination of both.
How is Common Law Notice Calculated?
The non-exhaustive factors the Courts consider when deciding how much notice is considered reasonable comes from the case of Bardal v Globe & Mail Ltd. Those factors are:
- The employee’s length of service for the employer;
- The employee’s age;
- The character of the employment (for example, if the role was entry-level or managerial);
- The availability of similar employment, considering the experience, training, and qualifications of the employee; and
- Other relevant factors.
Determining how much reasonable notice a terminated employee is entitled to is not an exact science or formula. The Courts will consider all of these factors in light of the circumstances, and apply them differently depending on the facts of each case.
Generally speaking, common law reasonable notice can be as high as 26 months of pay. However, the average award is typically 1 month per year of service with an employer. Older employees or employees who occupied unique roles with an employer that will be difficult to find elsewhere may be awarded more reasonable notice even if they are short-term employees.
What Can You Do If You Are Not Provided Reasonable Notice?
If an employer terminates you without cause and does not provide sufficient notice or pay in lieu of such notice, you may have a civil claim for wrongful dismissal. In Ontario, this means you would have to sue your employer at the Ontario Superior Court of Justice for your severance entitlements.
In many cases, you can attempt to negotiate your severance package with your employer upon termination. However, you should not sign any documentation before reviewing the terms and conditions with a lawyer. In most cases, accepting a severance offer from your employer is accompanied by a “Full and Final Release” which would prevent you from suing your employer in the future for legal claims arising out of your employment.
Before starting any wrongful dismissal lawsuit or severance negotiation, it is always best to consult with an employment lawyer to determine your entitlements and legal options. An employment lawyer can also help you negotiate your severance with your employer or navigate the legal process to achieve your desired outcome.
When terminating employees, the company must give notice or pay in lieu of notice. If the employment agreement does not limit the employee’s entitlements to the minimum under the ESA, they have the right to common law reasonable notice.
The purpose of reasonable notice is to allow the employee enough time to find a comparable job. The amount of reasonable notice will be determined based on the specific circumstances of the case.
If an employer does not provide an employee sufficient notice or pay in lieu of notice upon termination, the employee has a claim for wrongful dismissal. An employee may also negotiate a severance package with their employer.
An employment lawyer can help both employees and employers understand their respective legal obligations and entitlements for a termination without cause. An employment lawyer can also assist with negotiations and navigating the legal process for a wrongful dismissal claim.
Contact Achkar Law
If you have any questions about wrongful dismissals or common law reasonable notice periods, our team of experienced employment and human rights lawyers at Achkar Law can help.
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- Wrongful Dismissals: Steps of a Lawsuit in Ontario