Employment Law: The End of the 24 Month Cap on Notice / Severance?

In the recent Ontario Court of Appeal decision Keenan v Canac Kitchens Ltd., the Court of Appeal may very well have eliminated the notion of a 24-month cap of notice and severance following the termination of employees on a “without cause” basis.

Employment Law: Keenan V Canac Kitchens Ltd.

In Keenan v Canac Kitchens Ltd. Mr. and Mrs. Keenan were hired as full-time foremen for Canac Kitchens in 1976 and 1983 respectively. They both worked in this capacity through until October of 1987 at which point their employer informed them they would be continuing their employment as contractors and not full-time employees. Despite this change in the classification of their employment, they both continued to work exclusively for Canac Kitchens until 2007. By 2009, while they had performed some work for other employers, the majority of their work remained with Canac Kitchens.

Employment Law - Keenan vs Canac Kitchens Ltd - KCY at LAW

On March 15, 2009 they were terminated and provided with no notice, no pay in lieu of notice, and no statutory entitlements owed to employees following a “without cause” termination. Their employer claimed they were contractors and therefore had no entitlements upon termination.

The trial judge and the Court of Appeal both held that they were considered “dependent” contractors despite there being a two-year period where they did not work exclusively for Canac Kitchens. Given that the vast majority of their employment was exclusively with Canac Kitchens, the Court of Appeal held that this was determinative in deciding that they were “dependent” contractors.

Employment Law: The End of the 24 Month Cap on Notice / Severance?

The Court of Appeal ultimately upheld the decision by the trial judge to award 26 months of notice, taking into consideration the fact that Mr. and Mrs. Keenan worked an average of 28.5 years between themselves, were 63 and 61 years of age, held supervisory roles, were Canac Kitchen’s public face for approximately 30 years, and that the “substantial majority” of their work was done for Canac Kitchens.
While the Court of Appeal did not comment specifically as to whether or not the 24-month cap for notice and severance was still the upper limit for notice/severance awards, its decision certainly suggests an award of this nature can be reasonable despite there being no “exceptional circumstances.”

The End of the 24 Month Cap on Notice Severance - Employment Lawyers Burlington

This decision will likely be very impactful for both employers and employees when it comes to assessing reasonable notice/severance periods. Negotiating a fair and reasonable termination package is an important but often complicated matter. We at KCY at LAW have the employment law experience and expertise necessary to effectively assist both employers and employees to ensure your legal rights are properly looked after.

Contact KCY at LAW right now at 905-639-0999 or online and book a consultation!

The Declining Importance of The Character Of Employment

THE DECLINING IMPORTANCE OF THE CHARACTER OF EMPLOYMENT WHEN ASSESSING NOTICE AND SEVERANCE

Recently there has been less emphasis placed by the Courts on the character of an employee’s employment when assessing a reasonable period of notice and severance following a termination without cause. This has been affirmed in the 2015 Ontario Court of Appeal decisions of Arnone v Best Theratronics Ltd and Zoldowski v Strongco Corporation. In the former decision, Justice Brown, referencing the 2011 Ontario Court of Appeal decision of DiTomaso v Crown Metal Packaging Canada LP, stated the following:

“… the jurisprudence on the Bardal factors not only stresses that no one factor should be given disproportionate weight, but more recently indicates that the character of employment is a factor of declining importance in the Bardal analysis.

The Declining Importance of The Charcter of Employment When Assessing Notice & Severance

In the case of DiTomaso v Crown Metal Packaging Canada LP, Justice Lederer awarded a 58-year old warehouse labourer with 23 years of service a notice period of 22 months. While the character of the Plaintiff’s employment in that case was primarily of physical labour, his hourly wage was considerably higher than the average wage of individuals with the same position. Justice Lederer further stated that just because the Plaintiff did not have a managerial position within the company did not mean that he would have an easier time finding alternate equitable employment.

Termination of Employment Package Negotiation - Employment Law Laywers - KCY at LAW

Decisions like these will likely have a big impact on employees of lower skill who are terminated from their position without cause. While employers may attempt to provide these employees with a smaller notice and severance package on the basis that the employee should be able to acquire a similar position much quicker than a managerial position, decisions like DiTomaso, Arnone, and Zoldowski point to the contrary.

Termination Of Employment Package Negotiation

Regardless of the recent caselaw, negotiating a fair and reasonable termination package is an important but often complicated matter. We at KCY at LAW have the employment law experience and expertise necessary to effectively assist both employers and employees to ensure your legal rights are properly looked after.

Contact KCY at LAW right now at 905-639-0999 or online and book a consultation!

Dealing With An Employee With Dependency Issues in Work

Are you an employer who has an employee with a drinking or drug problem? Thinking of terminating them? Wondering how to handle the situation? Do not make a hasty decision without first consulting an employment lawyer otherwise you may find yourself in a situation similar to the employer in the recent 2015 case of FacilicorpNB and CUPE Local 1252 (R. (J.)), Re, 2015 CarswellNB 381 (N.B. P.S.L.R.B.).

Dealing With Employee Dependency Issues in The Workplace

In that case, the adjudicator reinstated an alcoholic employee who was dismissed after he was found to be under the influence of alcohol while at work. The employee had previously been warned and disciplined by the employer due to alcohol consumption, albeit in a compassionate and lackadaisical manner.
The adjudicator held that the employee, being an alcoholic, suffered from a disability pursuant to the applicable human rights legislation.

How To Deal with Employee Drink Issues - Employment Law

Ultimately, it was the employer’s lenient and compassionate response to the employee’s alcoholic condition that was to their detriment. The adjudicator further held that the lenient approach by the employer created a general impression in the mind of the employee that his behavior was not serious to the extent that it would result in a termination. Furthermore, there was no aggressive behavior by the employee and that the employer had not yet suffered “undue hardship” in accommodating the employee’s disability.

Ultimately, the adjudicator set aside the dismissal and imposed a thirty (30) day suspension followed by a leave of absence without pay during which the employee could attend a rehabilitation program. Provided the employee completed the program within the prescribed period, he could remain employed.

Always Get The Right Employment Law Advice

This case serves as a lesson for all employers who are too hasty in their decision-making when it comes to employees who you may suspect have drinking or drug-related problems. The most logical decision may not always be in the best interests of the company from a legal perspective. Contact KCY at LAW right away to get the advice and expertise you need in difficult employment law situations.