Canada: Serial Extensions Of Employment After Termination May Invalidate The Initial Notice

The Ontario Court of Appeal recently issued its reasons in the case of Di Tomaso v. Crown Metal Packaging Canada LP clarifying two issues: a) How often can employment be extended after a notice of termination is provided without the need to provide a fresh notice of termination; and b) Is there a general cap on common law notice for clerical and other unskilled workers?

Mr. Di Tomaso worked for Crown Metal for 33 years. He was advised on September 9, 2009 that the plant was closing and his last day of work would be November 6, 2009. He was 62 years of age, and held the position of two-piece mechanic and press maintainer. In early November 2009, Mr. Di Tomaso was advised that his employment would be continued to December 18, 2009, then to February 19, 2010, and then again to February 26, 2010. On February 24, 2010, the company confirmed that his last day would be February 26, 2010. Mr. Di Tomaso was provided with no pay in lieu of notice, but was paid the requisite 26 weeks severance pay. Mr. Di Tomaso sued for wrongful dismissal and claimed that he was owed 24 months' notice at common law. Crown Metal argued that it had provided Mr. Di Tomaso with working notice from September 9, 2009 to February 26, 2010, and therefore, owed him no further notice. In the alternative it argued that he was entitled to no more than twelve months' notice.

Section 6 of Regulation 288/01 under the ESA (the "Regulations") expressly deals with the extension of employment after the provision of notice of termination as follows:

Crown Metal argued that each extension of Mr. Di Tomaso's employment was less than 13 weeks, and therefore, a fresh notice of termination was not required.

The Court of Appeal held that an employee's employment may be extended for no more than thirteen weeks after the original notice, otherwise fresh notice of termination must be provided. In other words, successive or serial extensions are cumulative from the date of the original notice of termination. The Court of Appeal went on to state that a notice of termination must be clear and unambiguous. The continual extensions of employment in the Di Tomaso case created an ambiguity as to Mr. Di Tomaso's final date of work. Accordingly, the Court of Appeal held that Mr. Di Tomaso's notice of termination was not effective until February 24, 2010. Given that his last day of work was February 26, 2010, he was only provided with two days' working notice, and was therefore, entitled to additional pay in lieu of notice.

With respect to the common law notice to which Mr. Di Tomaso was entitled, Crown Metal argued that previous case law established a cap of twelve months for clerical and other unskilled workers. Crown Metal further argued that of all of the Bardal factors¹ to be considered in determining notice, the greatest amount of weight ought to be given to an employee's character of employment. The Court of Appeal held that no one Bardal factor is to be given disproportionate weight over the others and there is no set cap on the amount of notice to which clerical and other unskilled workers are entitled. In determining notice, the Bardal factors must still be applied on a case by case basis. Based upon Mr. Di Tomaso's age, years of service, and character of his employment, the trial judge's earlier award of twenty-two months' notice was upheld.

The Di Tomaso underscores the need for employers to monitor the total number of weeks that have passed in the event that employment is extended beyond the original effective date of a notice of termination. If the employee's actual last day of work will occur even one day beyond thirteen weeks following the original notice of termination, a new notice of termination must be provided to the employee. All notices of termination must be in writing to be effective and must clearly set out the employee's final day of work. In calculating an employee's notice entitlement, employers must remember that absent a written contract of employment limiting an employee's entitlement, the employee is also entitled to reasonable notice of termination under the common law. Although prior case law provides guidance as to the amount of notice to which a particular employee might be entitled, there is no fixed amount of notice for any class of employee. All employers should seriously consider limiting their liability by requiring each employee to sign a written employment agreement clearly setting out the notice to which they will be entitled upon termination of employment, thereby avoiding the uncertain and often significant liability under the common law.

Footnotes

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