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Misconceptions Regarding Minimum Entitlements
Despite employment being a major part of our lives, many individuals are unaware of what they are entitled to upon termination without cause. Perhaps the most common misconception is that the maximum notice a terminated individual is entitled to is 8 weeks, a statement made by the Ministry of Labour, in their “Termination and Severance” section of the Ministry’s website (http://www.labour.gov.on.ca/english/es/tools/esworkbook/termsev.php).
The problem with information such as this is that it is fundamentally misleading to terminated employees and the employers who are terminating them. It allows the employer to allege that the termination is “in accordance with employment standards” when it is clearly not. Even the Ministry of Labour acknowledges this in the same guide, “Termination and Severance”, stating (emphasis added): “Note that the fact that the employer has provided notice of termination or termination pay, or severance pay, in accordance with the ESA does not mean that the employee cannot sue for wrongful dismissal.”
That is, a lawsuit for wrongful dismissal is for more than the ESA minimums, usually a number of times more.
The Employment Standards Act, 2000 is a Guideline
Part XV of the ESA sets out minimum notice entitlements, not maximum entitlements. The legislative intent of the ESA is not to limit employees, regardless of tenure or position to 8 weeks’ notice, it is to ensure that they are provided, at the very least, these ‘minimum’ amounts.
This is the same as, for instance, minimum wage. Just because there is a minimum wage doesn’t mean that every employee is required to be paid that minimum. The concept of ESA severance being appropriate is equally ridiculous.
Reasonable Common Law Notice
Working for a company is like building up equity in a house. This equity is cashed out when you are terminated or laid off.
Upon a without-cause termination, an employee is entitled to what is referred to as “common law notice”, a concept best outlined in the case of Bardal v. Globe & Mail Ltd. , O.J. No. 149 (Ont. H.C.J). Common law notice takes into account the nature of employment, the tenure and age of the employee, and the amount of jobs which would be currently available to the employee. Common law generally is a minimum of 3 months notice for short-term employees increasing to from 3 weeks to 6 weeks per year of service for longer term employees. There is no set formula and it is important to contact an employment lawyer to determine what is reasonable in your case.
Again, this is where the misconceptions derived from the Ministry of Labour guides and other ‘minimum entitlement’ information come into play. For example, an employee who had worked in excess of 29 years with one company would, as it appears on the Ministry’s website, still only be entitled to 8 weeks’ notice. This is completely inaccurate.
Multiple long-term employees have been awarded upwards of 30 months at trial. In David v. Congregation B’Nai Israel (1999), 44 C.C.E.L. (2d), the Plaintiff, a Religious Teacher of 25 years, was awarded 30 months at trial. In Baranowski v. Binks Manufacturing Co., 2000 CarswellOnt 40, the Plaintiff, who was employed as the company’s President for 29 years was awarded 36 months’ notice at trial.
Advice for Employers
As an employer, employees look to you to provide them with their entitlements upon termination. Providing employees with minimum notice may backfire if they become aware of their actual entitlements at law. It is better to be aware of the law and provide terminated employees with sufficient notice in order to avoid a wrongful dismissal suit. Contact Monkhouse Law today for a free consultation and see how an Employment Lawyer can assist you in reducing liability.
Advice for Employees
If you are presented with a severance package upon termination that seems inadequate based on your years with the company, position and age, it is wise to consult a professional. Employers should provide you the opportunity to seek independent legal advice prior to signing a release in order to avoid a breach of contract finding. Contact Monkhouse Law today for a free consultation.