By Michael F. Lee, October 26, 2021

The COVID-19 Pandemic’s Impact on an Employee’s Notice Period

The pandemic’s impact on Canada’s economy has resulted in job losses across a wide array of sectors. As more employees are let go, judges are continually tasked with determining whether and how the economic downturn should be taken into account in assessing employees’ termination entitlements. 

Historically, courts have recognized that a downturn in the economy may justify a longer notice period; and, not surprisingly, Ontario judges have in recent months acknowledged the pandemic’s impact on the job market as a relevant consideration in deciding upon the appropriate “reasonable notice” period for a terminated employee.

In Yee v Hudson's Bay Company, 2021 ONSC 387, Justice Dow suggested that an employee who is terminated during the COVID-19 pandemic should be awarded a greater notice period than an employee who was terminated before the pandemic began:

It seems clear terminations which occurred before the COVID pandemic and its effect on employment opportunities should not attract the same          consideration as termination after the beginning of the COVID pandemic and its negative effect on finding comparable employment. 

Similarly:

• In Lamontagne v J.L. Richards & Associates Limited, 2021 ONSC 2133, Justice Roger found that the economic uncertainty that had been engendered by the threat of the pandemic by February 2020 was a factor to consider in assessing the employee’s reasonable notice period.

• In Kraft v Firepower Financial Corp., 2021 ONSC 4962, Justice Morgan held that there was: “evidence that the pandemic impacted on [sic] the Plaintiff's ability to secure new employment. In light of that evidence, he deserves to receive at least somewhat above the average notice period.”

That said, other decisions have clarified that a dismissed employee cannot simply cite the pandemic to justify a longer notice period. Rather, they must show that the impact of the pandemic has caused particular difficulty in finding other similar employment.

For example, in Marazzato v Dell Canada Inc., 2021 ONSC 248, although the plaintiff employee urged the Court to consider the economic downturn caused by the COVID-19 pandemic to justify a longer notice period, the Court determined that – in the plaintiff’s particular circumstances – there was no evidence that the COVID-19 pandemic had presented an obstacle to him finding alternative work. In that regard, Justice Dow explained that:

while there has been an economic downturn for many, Mr. Marazzato's former employer and his skill set is in the computer business which may have actually benefited from the COVID pandemic and its resulting greater use of computers for access to the internet and remote practices. The only evidence that touches on this area before me was Dell's strong financial performance to October 2020 as reflected in its increased share price. That is insufficient to make any concrete determination. Overall, I would conclude this factor does not favour a longer period of notice.

Judges in other Provinces have also decided against extending an employee’s notice period where:

• the evidence did not “support a limited availability of similar employment” (Goetz v Instow Enterprises Ltd., 2021 BCSC 709 at para 68, MacNaughton J); or
  

• there was “no evidence that the COVID-19 pandemic played a negative role” in finding alternative work (Abdon v Brandt Industries Canada Ltd., 2021 SKPC 37 at para 66, Demong J).

The lesson for both employers and employees is that although the courts recognize that the COVID-19 pandemic has had a profound impact on Canada’s economy and job market, the judiciary is mindful that its impact has not been uniform or universal. Some industries have been hit much harder than others, and some sectors have benefited from heighted demand during the pandemic.

Accordingly, the question of whether an employee will be entitled to enhanced termination arrangements due to the exigencies of COVID-19 will depend upon the extent to which the pandemic has limited (or not) the availability of similar employment for that individual – i.e. employment in the same or similar sector and/or employment in which he or she engages the same or similar skill set.

If you are an employer or employee with any questions regarding employee notice entitlements, do not hesitate to contact Duntrune LLP.

Michael F. Lee is an associate at Duntrune LLP.