Increased Reasonable Notice Period for Short Service Employees

By: Chris Drinovz & Japreet Lehal

Employers dismissing short service employees, be wary! A recent trend has been developing in British Columbia trial-level decisions towards higher common law reasonable notice awards for employees with shorter lengths of service. In our inaugural KSW Workplace Law blog post, we examine this trend in greater detail as presented in the following trio of cases decided less than a month apart.

In Greenlees v. Starline Windows Ltd., 2018 BCSC 1457 (August 29, 2018), a 43 year-old Mr. Greenlees quit his previous employment and accepted a sales job with the defendant window company after receiving a cold call promising the potential to earn $100,000 per year. Mr. Greenlees had a written employment agreement but it did not address severance. After only six months, Starline terminated the employment without cause. Despite getting no reference letter, Mr. Greenlees engaged in significant mitigation efforts, applying to 3 recruitment firms and 42 companies. After 8 job interviews, he found another job 7 months post-termination.

Mr. Justice Gomery began his analysis with reference to Saalfeld v. Absolute Software Corp, 2009 BCCA 18 (“Saalfeld”) where the BC Court of Appeal suggested a benchmark for short service cases of two to three months’ notice for a nine-month employee, to be adjusted in other cases for age, length of service, and job responsibility. Most significant to the upward adjustment was the limited availability of alternative employment. The court found that it could draw an inference as to this fact due to the plaintiff’s lengthy but unsuccessful job search, made even more difficult by Starline’s failure to provide a reference letter. His Lordship also found (para 52) that Starline had induced the plaintiff to quit his old job (para. 54) though this factor was only given modest weight as the case was “close to the line”. For these reasons, Mr. Greenlees received six months’ notice.

Mr. Justice Gomery ruled again a few days later in Corey v. Kruger Products L.P., 2018 BCSC 1510 (September 4, 2018). Here, the plaintiff was hired as a maintenance supervisor at 55 years old. His written employment agreement provided for a starting salary of $100,000 but was silent on the issue of termination. His duties and responsibilities were middle management and included supervision of highly-paid specialized tradespersons at the defendant’s tissue paper manufacturing facility. Mr. Corey was terminated without cause after 2 years and 7 months. He was 57 years old at termination and 58 by the time of trial.

After a summary trial on the issue of damages, the same Mr. Justice Gomery awarded 8 months’ notice. The starting point of the analysis (para. 30) was again Saalfeld and an adjusted “benchmark” of four to five months’ reasonable notice for “middle management employees with supervisory responsibilities and two to three years of service” such as Mr. Corey. That was not the end of the analysis however as his Lordship then concluded (para. 50) that “Mr. Corey’s age and the lack of availability of suitable alternate employment justify a somewhat longer notice period than would otherwise be the case.”  While Mr. Corey had made diligent search efforts (10 applications, 2 interviews) he had not found new employment. The court found that his age was a factor in this as well (para. 47) as it made Mr. Corey less competitive  having “fewer years of service to offer to prospective employers “ . This case is interesting in that the trial was heard on August 17, 2018, only five months after the date of dismissal. Kudos to counsel involved for efficiency!

Approximately three weeks later, the reasons for judgment for Chapple v. Big Bay Landing Ltd., 2018 BCSC 1666 were released. This case was also determined by a one-day summary trial on the basis of an agreed statement of facts. Mr. Chapelle was hired as the “Remote Resort Manager” for the defendant’s resort on Stuart Island with an annual salary of $84,000. After working for 26 months, Mr. Chapelle was terminated without cause at the age of 61 years old. He was then unemployed for 12 months before finding replacement work.

As Mr. Chapelle did not have a written employment contract, the length of reasonable notice was the main issue. Mr. Justice Steeves turned to Saalfeld here as well, noting the plaintiff was “entitled to notice longer than, for example, the rough rule of one month per year of service that is sometimes used”. The court found that Mr. Chapelle’s work was “somewhat specialized and the opportunities for work in the resort lodges in coastal British Columbia are limited”. As a result, he awarded 9 months’ notice.

Takeaways

Employers and employees alike would be wise to consider the following takeaways arising from this trio of cases:

  • The starting point for short-service employees is the two to three month benchmark established for a nine-month employee in Saalfeld to be adjusted in each case with reference to age, length of service, and job responsibility.
  • The above “benchmark” may be increased to four or five months’ notice for a middle-management employee with two to three years’ service.
  • Factors such as age, inducement, specialized industry, and the unavailability of similar alternate employment in the face of strong mitigation efforts may increase the notice period upward from the benchmark into the range of six to nine months.  
  • None of these employers had a written termination provision! These significant liabilities for short service employees can be reduced through the use of carefully drafted termination of employment clauses.

If you are an employer or an employee seeking advice regarding your employment relationship, the Workplace Law Practice Group at Kane Shannon Weiler LLP would be pleased to speak with you. Please contact us at cdd@ksw.bc.ca or 604-746-4357.

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