Employment lawyers are frequently asked to predict the length of reasonable notice that a court would award to an employee who has been terminated without cause. There is no set formula that applies to all cases, but lawyers have historically relied on the fact that, barring exceptional circumstances, courts generally don’t award more than 24 months’ notice. However, in Keenan v Canac Kitchens Ltd, the Ontario Court of Appeal recently cast doubt on that assumption by upholding an award of 26 months of reasonable notice, in a case without any identified exceptional circumstances.
This was a claim by two very long-service employees. Mr. Keenan worked for Canac Kitchens since 1976, and his wife joined him in that work in 1983. Both plaintiffs performed supervisory roles for many years, and were the “face” of the company, acting as Canac’s representatives. From the start of their employment until 2007, they worked exclusively for Canac. As work slowed down, in 2007, they began to also perform work for a competitor. In 2009, they were both let go.
There were two key issues in the action for wrongful dismissal: whether the Keenans were dependent or independent contractors, and, if they were dependent contractors, what period of reasonable notice were they entitled to upon termination. On the first issue, the trial judge found that the Keenans met all the criteria to be considered dependent contractors, and were therefore entitled to reasonable notice. (For more information on dependent contractors, see: “Are you an employee, independent contractor or dependent contractor?”) On the second issue, the trial judge held that 26 months’ notice was reasonable in the circumstances, and therefore awarded $125,000 to the Keenans. Canac Kitchens appealed on both issues.
Ontario Court of Appeal’s Judgment
In its judgment rendered on January 26, 2016, the Ontario Court of Appeal upheld both aspects of the trial judgment. Regarding the length of reasonable notice, the Court held that there was no basis to interfere with the trial judge’s award, given the relevant factors for calculating reasonable notice:
Lawrence Keenan and Marilyn Keenan worked for Canac for approximately 32 and 25 years respectively. Together, their average length of service was 28.5 years. They were 63 and 61 years of age at the time of termination. They held supervisory, responsible positions in which they oversaw the installation of Canac’s products and met with Canac’s customers as its representatives. For over a generation, they were Canac’s public face to the outside world. Over a period of approximately thirty years – the entirety of their working lives – the Keenans’ income had come from Canac and they relied on that income to support themselves and their family. Even during the approximately two years that they provided some services to Cartier, a “substantial majority” of the Keenans’ work continued to be done for Canac. These circumstances justify an award in excess of 24 months and I see nothing wrong in the trial judge’s finding that 26 months’ notice was reasonable.
Opening the door for longer periods of reasonable notice?
Conventional wisdom in employment law has long been that employees are unlikely to receive awards of reasonable notice in excess of 24 months. By upholding a judgment of 26 months’ notice, the Court of Appeal has arguably opened the door for larger awards in wrongful dismissals involving older, long-service employees. This judgment could have significant implications for future cases, particularly in light of the aging workforce in Canada. Employees whose circumstances support it can now potentially pursue claims beyond what was previously thought to be a ‘ceiling’ of 24 months’ notice. Employment lawyers and workers’ advocates will closely watch this development in future cases, to determine whether this is part of a larger trend towards longer notice periods.
For more information about calculating reasonable notice, see: “What is reasonable notice?”
[This article is for informational purposes only and does not constitute legal advice, which cannot be given without consideration of your individual circumstances.]