Timing is Everything- The Impact of COVID-19 on Reasonable Notice Periods

Two recent decisions from the Superior Court of Justice have clarified the impact of COVID-19 on calculating the common law reasonable notice period. 

Yee v. Hudson’s Bay, 2021 ONSC 387

In Yee v. Hudson’s Bay, the Plaintiff had been employed by the Defendant in a variety of positions for 11.65 years, with his last position being Director of Product Design and Development. The Plaintiff was terminated on August 18, 2019 and was 62 years old at the time of the trial.

The Plaintiff’s employment contract did not contain a valid termination provision. As a result, he was entitled to reasonable notice of termination. To determine the Plaintiff’s reasonable notice period, the Court considered his age, length of service, and managerial nature of his role.

Turning to the availability of similar employment, the Plaintiff’s position was that the fallout from COVID-19 negatively impacted his ability to find comparable employment. While the Court acknowledged that economic factors may negatively impact an employee’s ability to find another position and justify a longer notice period, the notice period is determined by “the circumstances existing at the time of termination.” 

Consequently, the Court concluded that COVID-19’s impact on the economy and job market could not be considered in the analysis for determining the reasonable notice period of an individual terminated before the onset of the pandemic. 

Based on the entire factual matrix, the Court concluded that the Plaintiff was entitled to 16 months’ notice. 

Iriotakis v. Peninsula Employment Services Limited, 2021 ONSC 998

In Iriotakis v. Peninsula Employment Services Limited, the Plaintiff was terminated from his sales position with the Defendant without cause. At the time of termination on March 25, 200, the Plaintiff had been employed for approximately 28 months and was 56 years old. Similar to Yee, the Plaintiff’s employment contract contained an invalid termination provision and he was entitled to reasonable notice of termination.

The parties asked the Court to make findings about the impact of COVID-19 on the job market on the Plaintiff’s reasonable notice period. The Court acknowledged that the pandemic likely influenced the Plaintiff’s search for new employment. However, with this in mind, the Court found that “the impact of the pandemic on the economy in general and on the job market, in particular, was highly speculative and uncertain both as to the degree and to duration” at the time that the Plaintiff was terminated and cautioned against “applying hindsight to the measuring of reasonable notice.”

The Court took a “balanced approach” in recognizing that the Plaintiff’s age and uncertainty in the job market due to COVID-19 “served to tilt the period of reasonable notice away from the fairly short period of notice that his short service might otherwise indicate.” As a result, the Court concluded that the Plaintiff was entitled to three months’ notice. 

Key Takeaways 

Both the decisions in Yee and Iriotakis make clear that reasonable notice is to be determined based on the circumstances at the time of termination. While the impact of COVID-19 on the economy and job market was unknown at its onset one year ago, the same cannot necessarily be said today. If the impact of COVID-19 can be established with greater certainty at the time of termination, this evidence may be used to justify a higher reasonable notice period. Employers should anticipate that terminations occurring since the onset of the COVID-19 pandemic (March 2020 in Ontario) may attract a higher reasonable notice period.