Ontario Court Extends Notice Beyond 24 Months: A New Approach to “Exceptional Circumstances” for Wrongful Dismissal Cases?
In a recent decision, the Ontario Superior Court of Justice awarded a 26-month notice period to a 65-year-old employee after 40 years of service, relying chiefly on core Bardal factors to justify the result.
In Panchbhaya v. Vulsay Industries Ltd., 2025 ONSC 5370 (“Panchbhaya”), Justice Koehnen treated the combination of advanced age and lengthy service as exceptional circumstances in themselves, sufficient to justify an award beyond the conventional 24-month limit. The Panchbhaya decision thus marks a subtle, but important, loosening of the restrictive view expressed by the Court of Appeal in Dawe v. The Equitable Life Insurance Company of Canada, 2019 ONCA 512 (“Dawe”), which cautioned that surpassing the 24-month threshold should remain reserved for truly exceptional situations.
The Facts
Panchbhaya joined Vulsay Industries in 1983, shortly after immigrating to Canada. Over the next 40 years, he advanced to the role of laboratory manager.
In late 2023, at age 65, Panchbhaya was dismissed without cause following the closure of one of Vulsay’s facilities. He earned an annual salary of $84,000.00, participated in a company pension plan, and enjoyed comprehensive group benefits.
Vulsay issued only minimum statutory dismissal entitlements as required by the Employment Standards Act, 2000 and provided no letter of reference or outplacement support. During litigation, Panchbhaya sought an order for pay-in-lieu of 30 months’ reasonable notice; Vulsay argued the appropriate notice period should fall somewhere between 12 to 18 months.
The Court’s Analysis
Justice Koehnen began by reviewing the familiar Bardal factors: character of employment; length of service; age; and availability of comparable employment.
At age 65, Panchbhaya faced serious barriers to re-employment. Citing Hussain v. Suzuki Canada Ltd., [2011] O.J. No. 6355, the Court observed that employees in their mid-sixties are “in the twilight if not at the end of [their] working years,” and often face “extremely stiff competition” from younger applicants in the job market.
The Court also emphasized that 40 years with a single employer can make a worker appear “set in his ways” and less adaptable—echoing comments included in Milwid v. IBM Canada Ltd., 2023 ONSC 490, that lengthy service can itself limit employability.
Vulsay maintained that such factors alone should not automatically lengthen the notice period, pointing to Cabott v. Urban Systems Ltd., 2016 YKCA 4, where a 53-year-old professional planner was not found to face significant re-employment barriers due to her age at the time of dismissal. Justice Koehnen distinguished this decision, noting that while a 53-year-old professional could still be viewed as in the “prime of their career,” a 65-year-old in a specialized technical role may not be perceived the same way.
The Court also found that Panchbhaya’s skills were narrowly tied to the liquid chemical industry, with limited transferability to other sectors.
A Broader Reading of “Exceptional Circumstances”
The most significant aspect of the Panchbhaya decision lies in its treatment of the presumptive 24-month cap on reasonable notice for dismissed workers.
The Court of Appeal in Dawe cautioned against routinely extending notice beyond two years and reaffirmed that such awards must reflect identified “exceptional circumstances”. Yet in Panchbhaya, Justice Koehnen adopts a more flexible approach than has previously been seen when it comes to defining what can constitute “exceptional circumstances”.
In this regard, at paragraph 12 of his decision, Justice Koehnen wrote:
The Court of Appeal has recognized that in exceptional circumstances, notice awards above 24 months are warranted. In Dussault v. Imperial Oil Limited, Favreau J. (as she then was) held that one or more of the Bardal factors, such as age and length of service can, in and of themselves, amount to exceptional circumstances. I find that the plaintiff’s age and length of service here constitute exceptional circumstances. [emphasis added]
Note that the Panchbhaya decision relies on a single prior case—Dussault v. Imperial Oil Limited, 2018 ONSC 1168 (“Dussault”) —as authority for the proposition that advanced age and lengthy tenure alone can constitute exceptional circumstances when assessing a notice period. Although Dussault was largely affirmed on appeal, the issue of the appropriate notice period was not before the Court of Appeal.
The Result
The Court awarded 26 months’ notice to Panchbhaya, along with the value of lost benefits and pension contributions for the duration of the notice period.
Quite helpfully, a schedule appended to the decision lists comparator cases involving long-serving employees with an average age of 58.6 years and tenure of 32.4 years—producing an average notice period result of 26.6 months. Panchbhaya’s notice period award is unsurprisingly consistent with these precedents.
Takeaways
The Panchbhaya decision represents a notable evolution in the law of assessing reasonable notice. By grounding an award above 24 months primarily on extreme instances of the traditional Bardal factors (advanced age – 65; and long tenure – 40 years), Justice Koehnen has pushed the boundary on what can constitute “exceptional circumstances”.
Whether other courts will adopt this more expansive interpretation remains to be seen. For now, Panchbhaya signals that age and long service, even standing alone, may open the door to extended notice periods. Employers dismissing older, long-serving employees should exercise care in assessing severance obligations, as the seemingly once-firm ceiling on reasonable notice appears increasingly open to exception.
Vey Willetts LLP is an Ottawa-based employment and labour law boutique that provides timely and cost-effective legal advice to help employees and employers resolve workplace issues in the National Capital Region and across Ontario. To speak with a lawyer, contact us at: 613-238-4430 or info@vwlawyers.ca.