2024 got off to a bang in the world of employment law. In a recent trial level decision, an Ontario judge has found yet another termination clause illegal and unenforceable. In so doing, the court accepted an entirely novel argument for why termination provisions may be read as impermissibly contracting out of the mandatory requirements of the Employment Standards Act, 2000 (the “ESA”).
Individuals in Ontario have a duty to mitigate their loss of employment when seeking damages for wrongful (or constructive) dismissal. In practical terms this means that while employees may be able to seek damages from their former employer (to put them in the position they would have been had they received adequate notice of termination), they must make reasonable efforts to replace their lost income by looking for, and accepting, other comparable work.
In wrongful dismissal cases, absent a lawful written contractual entitlement, the courts conduct an individualized assessment to determine what would be reasonable notice of the dismissal. In a recent contribution to First Reference Talks (a collaborative HR and employment law advisory blog), Paul Willetts highlighted two wrongful dismissal cases where the short-service plaintiffs who otherwise differed significantly (in terms of age, compensation and character of employment), both received a 2.5 month notice period.
Dismissed employees are expected to actively search for new work if they want to preserve full severance rights. Yet a recent case out of Ontario suggests there may be more leniency for older workers. This reflects a judicial acknowledgment of the fact that re-employment opportunities tend to become scarce past a certain age.
When Ontario courts assess whether an employee has been wrongfully dismissed, they often start by referencing the 1960 decision of Bardal v. Globe & Mail Ltd., 1960 CanLII 294 (ON SC).
Bardal directs courts to consider several factors specific to the employee when determining appropriate severance, including: 1) character of the employment; 2) length of service; 3) age at the time of termination; and 4) availability of similar employment.
When an employer dismisses an employee without cause, the employee’s work performance prior to termination is generally considered to be irrelevant. Ontario’s legal framework is concerned only with determining whether the employee was dismissed without receipt of either reasonable notice (in accordance with the common law or a written contract, as the case may be) and if not, calculating the value of damages that should be paid.
