In the absence of an employment agreement that expressly sets out a notice period upon termination, employees who are terminated without just cause are entitled to a notice period or pay in lieu of notice from their employers in accordance with the common law.
The distinction between an employee and independent contractor is not always clear as can be seen in the recent decision of Tetra Consulting v Continental Bank et al., 2015 ONSC 4610.
The dismissal of a long-term employee who is entitled to common law reasonable notice can result in significant liability for an employer. As the determination of the appropriate notice period is contextual, it can be difficult for an employer to accurately assess their potential liability.
The employee, Ms. Steel (“Steel”), made a summary judgment application to the Supreme Court of British Columbia (“BCSC”) for damages for wrongful dismissal from her employment with Coast Capital Savings Credit Union (the “Employer”).
We have written a number of times regarding cases that significantly depart from the so-called one month per year of service rule of thumb. Yet another case has illustrated the risk an employer runs in assuming their liability will be capped at one month per year of service.
In Ostrow v. Abacus Management Corp. Mergers and Acquisitions, 2014 BCSC 938 (May 29, 2014), the British Columbia Court Supreme Court assessed the appropriate notice period for a nine-month employee.
A recent post cautioned employers to beware of using the one month per year of service “rule of thumb”. The Ontario Superior Court of Justice has once again affirmed that, depending on the circumstances, courts are willing to award short service employees significantly more than one month per year of service.
One of the questions at the forefront of many employers’ minds when they are considering terminating an employee without cause is how much it is going to cost. Unless there is a written employment contract with an express termination clause, an employer’s obligation is to provide reasonable notice of termination.