By Andrew Mawdryk | January 17, 2022
This general legal information (not legal advice) is subject to change, and there may be exceptions based on your specific circumstances. You should obtain independent legal advice before taking any action which may impact your legal rights. If you are an employee or an employer and need legal advice regarding layoffs or termination of employment, an OA lawyer will be pleased to assist you with your situation.
The COVID-19 pandemic has had a dramatic impact on all aspects of life as we knew it. The labour market is one such area where countries across the world saw significant downward trends as a result of the pandemic. In Ontario, the unemployment rate jumped from 5.3% in January of 2020 up to 13.5% in May of 2020. As the pandemic wears on, the unemployment rate slowly improves, but still remains above the pre-pandemic rates.[1]
This sort of change in employment opportunities will often have an effect on the quantum of damages awarded for wrongful dismissal. The purpose of wrongful dismissal damages awards is to compensate the terminated employee for the employer’s failure to provide the employee a reasonable amount of time to find comparable employment, commonly called the “reasonable notice period”.[2] This leads to no surprise that lawyers are making arguments as to why COVID-19 was a valid reason to extend the reasonable notice period, and that courts in Ontario are taking those arguments into consideration.
In assessing the reasonable notice period, courts in Ontario consider the employee’s circumstances at the time of termination. Accordingly, if termination is considered to have occurred before the pandemic began, the impacts of the pandemic will not be considered. According to the case of Yee v Hudson’s Bay Company, this is true even where an employee’s reasonable notice period runs largely through a time when the pandemic was/is in full swing.[3]
There have been a few cases from Ontario courts which have given some indication as to when the pandemic can be taken into account, temporally. In Lamontagne v J.L. Richards & Associates Limited, the Court found that on February 19, 2020, the possibility of a pandemic was being discussed with cases being reported in Asia and Europe, along with a clear threat of a global pandemic. The degree of uncertainty at the time was taken into account when determining the reasonable notice period.[4] However, the Court decided in another case that the pandemic could not be a factor for a termination that occurred on October 30, 2019.[5] In Iriotakis v Peninsula Employment Services Limited, when an employee was terminated in March of 2020, the Court made it clear that while the pandemic would have had some influence on the terminated employee’s job search, the impact on the job market was still “highly speculative and uncertain both as to degree and to duration at the time [of termination].”[6]
Even when it is clear that the pandemic was in full swing at the time of termination, the courts still deal on a case-by-case basis in determining the quantum of damages. In Kraft v Firepower Financial Corp., the Court attributed a specific quantity of the notice period to the pandemic. The Court determined that reasonable notice period for non-pandemic times was 9 months. Factoring in the pandemic, the Court determined the reasonable notice period in the circumstances to be 10 months.[7] In reaching this decision, the Court found that the terminated employee applied to 70 different jobs in an effort to try and find alternative employment. By contrast, in Marazzato v Dell Canada Inc., the Court was clear in stating that while it was asked to take into consideration the economic downturn when determining the proper notice period, “it would not be appropriate to speculate on that submission without evidence.”[8] In Marazzato, not only was no evidence advanced to support a longer notice period, but the Court suggested that the computer industry (the industry of the terminated employee) may not have been negatively affected by COVID-19 regardless.[9] Marazzato and Kraft show that the appropriateness of an extension of the reasonable notice period due to COVID-19 will depend on the individual circumstances of each case.
The Kraft decision was released on July 15, 2021, and it remains to be seen whether Ontario courts will follow such a clear addition to the standard reasonable notice period for cases in which the pandemic is determined to be a factor for employment opportunities at the time of termination. No matter which direction the court chooses to go, determinations of reasonable notice periods vary on a case-by-case basis, depending on all of the circumstances of each individual case. An employer may still have other arguments as to why the pandemic should not affect the reasonable notice period, such as providing evidence that a particular industry has not been negatively impacted like the rest of the economy.
O’Neill Associates is proud to support students from the Bora Laskin Faculty of Law (Lakehead University, Thunder Bay) through the school’s unique Integrated Practice Curriculum (IPC) Program. The IPC, a Bora Laskin variation of the “articling” program students complete at most other law schools, matches students with law firms to work side-by-side with experienced lawyers for one full semester during the third and final year. This article was written by Andrew Mawdryk who will be completing his third year IPC with OA in the fall of 2021.
[1] Government of Ontario, “Ontario Employment Report, July to September, 2021”.
[2] Holland v Hostopia.com Inc, 2015 ONCA 762 at para 61.
[3] Yee v Hudson’s Bay Company, 2021 ONSC 387 at para 22.
[4] Lamintagne v J.L. Richards & Associates Limited, 2021 ONSC 2133 at para 64.
[5] Herreros v Glencore Canada, 2021 ONSC 5010 at para 19.
[6] Iriotakis v Peninsula Employment Services Limited, 2021 CarswellOnt 1663 at para 19.
[7] Kraft v Firepower Financial Corp., 2021 ONSC 4962 at para 22 [Kraft].
[8] Marazzato v Dell Canada Inc., 2021 ONSC 248 at para 14 [Marazzato].
[9] Ibid.