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Employee terminated without cause after almost 40 years with the employer

Ontario

,

Canada

Background

In Currie v. Nylene Canada Inc., 2022 ONCA 209 (CanLII), the employee began working for the employer in 1979 as a temporary machine operator. Over time, she was promoted several times and, by 2004, she held the position of Chief Operator of one of the company’s divisions. After the business was acquired by another company, the new employer offered the employee a position in 2005. In 2017, she was told that she needed to retire in order to access her accumulated pension plan, but that she would be offered employment following her retirement. Thus, the employee resigned and almost immediately accepted a new offer of employment with the same employer.

However, in 2018, the employee was advised that the employer was discontinuing some of its operations, and she was terminated on a without cause basis. The employee was 58 years old at the time of her termination. She was paid eight weeks of termination pay and 26 weeks of severance pay, among other entitlements.

The employee commenced an action for damages for wrongful dismissal and other relief. Among other claims, the employee submitted that she was entitled to 26 months’ notice, arguing that the trial judge should make a finding of an exceptional circumstance that would warrant exceeding the base notice period of 24 months, as set out in the decision of Lowndes v. Summit Ford Sales Ltd., 2006 CanLII 14 (Ont. C.A.) (“Lowndes”).

In response, the employer submitted that there were no exceptional circumstances in the employee’s case and argued that the acceptable notice period was 15 months.

At the time of the trial, the employee remained unemployed.  

The trial judge rules that the employee was entitled to 26 months notice period

One of the issues addressed at trial was whether the employee’s retirement in 2017 constituted a break in employment with the employer. The trial judge ruled that it did not. Therefore, the trial judge had to determine the employee’s entitlement to reasonable notice, based upon her 39 years of service.

The trial judge began by noting that the determination of whether an exceptional circumstance exists that would warrant exceeding the base notice period of 24 months is fact-specific and discretionary.

Relying on the factors identified in Bardal v. The Globe and Mail Ltd. (1960), 1960 CanLII 294 (ON SC), as well as those in Lowndes and Dawe v. The Equitable Life Insurance Company of Canada, 2019 ONCA 512, which state that exceptional circumstances should exist to support a notice period that exceeds 24 months, the trial judge set out the relevant considerations as follows:

  • The employee left high school to start work at age 18 as a machine operator with the employer and worked there for her entire career, ultimately rising to become the Chief Operator reporting to the Shift Leader;
  • After working for the employer for 40 years, her employment was terminated near the end of her career, when she was 58 years old;
  • The employee had very specialized skills making it very difficult for her to find alternative suitable employment. Moreover, at the time of her termination, her computer skills were limited. She made diligent efforts to attempt to gain basic computer skills and mitigate her damages but the trial judge was not convinced she would succeed in securing alternative employment;
  • The work landscape had evolved significantly since the employee had entered the workforce in 1979 and, as her experience was limited to working for the employer and its predecessors in one manufacturing environment, her skills were not easily transferable; and
  • Given the employee’s age, limited education and skills set, the termination “was equivalent to a forced retirement.”

Having considered the employee’s unique situation and combining all of the relevant factors, the trial judge concluded that the employee had demonstrated the existence of exceptional circumstances.

In the result, the trial judge found that the employee was entitled to 26 months’ salary as compensation in lieu of notice.

The employer appealed the decision to the Ontario Court of Appeal.

Ontario Court of Appeal dismisses employer’s appeal

On appeal, the employer argued that the trial judge had erred on two grounds:

  1. The trial judge erred by using the period from 1979 until 2018 as the basis for determining the period of reasonable notice. The employer contended that the employee’s years of service for the purpose of assessing the reasonable notice period ran only from June 2017, when she retired from and then was rehired, until December 2018; and
  2. The trial judge erred in law by exceeding a maximum reasonable notice period of 24 months as there was no basis in this case to justify a longer notice period.

On the first ground of appeal, the Court found that the trial judge had carefully articulated the evidence in support of his findings that the employee’s retirement in 2017 did not constitute a break in her employment. Given his findings of fact, the Court stated that it was open to the trial judge to conclude that the retirement/re-hiring process in 2017 did not affect her years of service with the employer for the purpose of determining the reasonable notice period. As such, the Court found no palpable and overriding error and dismissed the ground of appeal.

On the second ground of appeal, the Court observed that the trial judge had articulated in detail the factors he considered in arriving at the conclusion that 26 months’ notice was warranted. The Court further noted that the trial judge had firmly anchored his reasonable notice analysis in the relevant legal framework set out in case law.

As a result, the Court found ample support for the trial judge’s award of damages in lieu of reasonable notice and dismissed the ground of appeal.

In the result, the employer’s appeal was therefore dismissed.

May 20, 2022
Currie v. Nylene Canada Inc., 2022 ONCA 209 (CanLII)