The dismissal of an employee without cause is never easy. For the employee, it means the loss of his and his family’s means of livelihood through no fault of his own (most of the time). For the employer, it can entail a rather uncomfortable termination meeting with a perhaps valuable and even likeable, but nonetheless, redundant employee.

Such a dismissal is all the more complicated by the necessity of determining a reasonable amount of compensation or, in other words, notice period. Most individuals know that this determination does not end with the provisions of the Employment Standards Act, 2000. Generally speaking, reasonable notice at common law (case law or judge-made law) supersedes what provincial legislation provides.

Unlike the Employment Standards Act, 2000, there is no formula to determine how much notice is reasonable. This determination is more of an art than a science. You could take the facts of a particular case, put them to 10 different judges, and potentially get 10 different answers on how much notice is considered reasonable. However, what you would find is that those 10 answers would fall within a fairly narrow range.

The factors that go into the determination or assessment of a reasonable notice period are often referred to as the Bardal factors, after the leading case of Bardal v. Globe & Mail Ltd. Recently, the Court of Appeal for Ontario reiterated that these factors are all focussed on the circumstances of the employee, not the employer.

In 2014, the Ontario Superior Court of Justice in Gristey v. Emke Schaab Climatecare Inc., a case that I wrote about last year, relied on the Court of Appeal’s decision in Bohemier v. Storwal International Inc. in concluding that an employer’s declining financial health could be a relevant consideration and discounted the initial assessment of a 12 month notice period by one-third to 8 months.

In Michela v. St. Thomas of Villanova Catholic School, the Court of Appeal made it clear at paragraph 20 that its earlier decision in Bohemier v. Storwal International Inc. should not be interpreted to mean that an employer’s financial difficulties justify reducing the notice period. According to the Court of Appeal, “It does no more than to hold that difficulty in securing replacement employment should not have the effect of increasing the notice period unreasonably.”

From a practical point of view, these cases show that even though an employer’s ailing finances are not supposed to impact on the assessment of the notice period, judges are all guided by their sense of fairness. Even though evidence of the employer’s financial situation may be irrelevant in assessing notice, if tendered to provide a factual context or background, it could be influential – even if on subconscious level only.  This highlights the subjective nature of determining notice periods and why it is more art than it is science.

This article is intended only to provide general information and does not constitute legal advice.  Should you require advice specific to your situation, please feel free to contact me to discuss the matter further.