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In the recent Ontario Superior Court case Hussain v. Suzuki
Canada Ltd., a 35 year employee of Suzuki was awarded
26-months severance. This 26-month notice period is two months
beyond what has been generally accepted as the upper threshold of
reasonable notice upon termination of employment under the common
law.
In the earlier case of Lowndes v. Summit Ford Sales
Limited, the Ontario Court of Appeal stated that there is no
express cap on the amount of reasonable notice upon termination to
which an employee may be entitled, since each case must be
considered on its own merits. The court acknowledged however, that
24 months is usually in the higher range unless there are
exceptional circumstances.
The Suzuki case gives us a glimpse into what one court
has deemed to be such "exceptional circumstances."
In Suzuki, the court applied the well-known factors
from Bardal v. Globe & Mail Ltd. Although the analysis
of each factor on its own was not exceptional per se, the
court held that the combination of all the factors amounted to the
kind of exceptional circumstances that warrant a 26-month notice
period.
The factors considered were as follows:
The employee was 65 years old;
The employee had worked for Suzuki continuously for almost 36
years;
The employee had worked his way up to the position of Assistant
Warehouse Supervisor;
The employee lost his job due to corporate restructuring as a
result of economic hardship;
The employee's skills were general skills obtained on the
job that were less marketable than skills that are the product of a
definable trade; and
The employee was close to the end of his working years.
The employee's case was further bolstered by the fact that
he had made efforts to mitigate his losses almost immediately. He
began searching for a new job only 3 weeks from the date of
termination of his employment; to which the court commented
"[i]t is frankly remarkable that, in his circumstances, the
plaintiff was able to organize himself so quickly". As such,
the court therefore did not reduce its finding of reasonable notice
for lack of mitigation.
In addition, despite the fact that the 26 month notice period
had not expired, it is worth noting that the award was made payable
via lump sum and the court only reduced the award by 2 weeks in
consideration of the 1% likelihood that the employee would find a
job before the end of such period.
Employers should consider this case an example of circumstances
where the court will award a higher than usual notice period to
terminated employees with a long service record who face limited
prospects of employment. As such, where faced with the prospective
termination of a long-standing employee, employers should explore
their options well in advance before taking any steps towards
termination so as ensure the best and most creative approach.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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