Written by Michael J Weiler
In my December 2015 blog post, I commented on the increasing number of decisions in Ontario that awarded damages based upon notice periods beyond the normal “cap” of 24 months: https://www.ksw.bc.ca/2015/12/09/will-the-rough-upper-limit-of-24-months-notice-be-increased-in-bc/
At that time, I opined that the 24-month cap will remain the law in BC. In this article, I note that Ontario courts continue to push the envelope in extending notice periods beyond 24 months. I have been documenting this trend since that 2015 article – including in this article posted on my blog: https://www.ksw.bc.ca/2016/03/30/26-months-notice-for-husband-and-wife-contractors/
Now, an Ontario Court, in the case of Dawe v Equitable Life, has held that 36 months’ notice would have been reasonable.
Michael Dawe was employed by The Equitable Life Insurance Company of Canada as a senior VP. He was 62 years old at the time of his termination and had been with the company for 37 years. He earned a $249,000 base salary plus a bonus of $379,000. He was terminated without cause because of a minor dispute with management over the use of sports tickets. He had little chance of replacing his employment. He sued for wrongful dismissal and claimed damages based on a 30 months’ notice period. The company argued that the normal cap of 24 months should apply.
The Court noted the general presumption of 24 months as the cap but found, at Para 31, that “Presumptive standards no longer apply” given that, among other things, the normal retirement age of 65 no longer applies in many cases.
The Judge found, at Para 35:
Mr. Dawe had commenced the process of retirement planning, not uncommon at his age and logical given the nature and focus of the life insurance industry. Mr. Dawe had made no decision as to when retirement would occur. He says he was committed to working at Equitable Life until at least age 65. Retirement, if voluntary, may have occurred sooner or later. On the evidence, I conclude it is more likely Mr. Dawe would have worked at Equitable Life until age 65. I would add, it was more likely he would have worked there to a later age than an earlier one.
The Court considered the “Bardal factors” but ultimately ruled in favour of Mr. Dawe. See Paras 36 and 37 where the Judge finds:
Counsel referred to a number of cases as examples of a reasonable notice period. Such were helpful in my review. Mr. Dawe is at the extreme high end of each of the Bardal factors. He should have been allowed to retire on his own terms. With no comparable employment opportunities, in particular, I would have felt this case warranted a minimum 36 month notice period.
Mr. Dawe’s position of a 30 month notice period is more than reasonable. I conclude he was entitled to that in this case.
The result was that Mr. Dawe was awarded damages based on 30 months’ notice as he had claimed. Had he asked for more, he would have been awarded damages of at least 36 months!
It should be noted that this decision was based on a summary trial that dealt only with the notice period and the entitlement to bonuses. Mr. Dawe was still entitled to pursue his claims for punitive and moral damages that would require a full trial.
WHAT TO DO?
While I think it remains unlikely that BC courts will regularly award damages beyond the 24-month cap, employers are well-advised to protect themselves from such extraordinary awards. Readers of this blog will know what I suggest—obtain a valid, enforceable, written employment agreement limiting the employee’s rights on termination. In BC Mr. Dawe could have been contractually limited to 8 weeks damages.
The content in the Michael Weiler Employment + Labour newsletters and blog is for your general information and should not be taken as legal advice. If you have a specific problem, please contact Michael Weiler to discuss your situation.