Employees who are terminated without cause are entitled to a form of termination pay called a notice of termination. Notice of termination is meant to provide employees with enough time (or “reasonable notice”) to find a similar job. Without a contract that limits the employee to the legally required notice, judges consider factors such as the employee’s age, position, length of service, and job availability in the economy, to determine how much notice is reasonable. Although employers may provide termination pay into two forms – working notice or pay lieu in notice – the courts have found that sometimes working notice does not count as actual notice, which allows the employee to ask for more termination payment.
This finding mainly stems from the issues with acquiring a similar job if the employee receives working notice rather than pay in lieu of notice. During working notice, the employee is required to continue working for the employer to obtain the termination pay. The alternative scenario, receiving pay in lieu of notice, allows the employee to stop working immediately and pocket the notice payment. To most employees, the latter is preferable as pay in lieu of notice takes away the discomfort of surrounding yourself with colleagues who are aware that you were dismissed.
From the courts’ perspective, working notice may not be reasonable, specifically if the employee is not provided with a fair opportunity to obtain similar employment. In Wood v. CTS of Canada Co., the Court found that it must consider “the quality of the opportunity given the employee to find new employment”. In this case, employees were required to work long 16-hour days during their working notice. Emphasizing the difficulty of finding a job in this situation, the Judge in Wood held that the employees “had 8 hours a day to look for new employment and if [they] frittered it away sleeping, that was [their] choice.”
It is important to note that in Wood, the Court shifted the burden of proof on the employer to prove that it provided reasonable notice of termination. Aside from the quality of the opportunity to find a new job, the Court also held that there was a quantitative component of what is “reasonable”. The employees, in this case, were required to continue working in excess of the minimum legal requirement in notice, which led to more difficulties in making time to find alternative employment. The Court therefore found that the working notice was not reasonable and cannot be credited as termination notice.
Like in Wood, you may have been offered a termination package with a working notice period. If you believe that the working notice will hinder your prospects of obtaining similar employment, you may be able to negotiate for more notice. It is worth noting, however, that the Court in Wood did not consider what would happen if the employees were allowed to ask for time off to go on interviews. Legal experts at Monkhouse Law can assess how these differences in facts can determine the likelihood of extending your notice period.
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