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The Reason for a Longer Notice Period

August 13, 2021

Ontario

,

Canada

Issue

If terminated employee is on a closed work permit linked to the terminating employer, does that impact the reasonable notice period?

Conclusion

The reason for determining a reasonable notice period is to compensate the employee for the amount of time that would reasonably be expected for that employee to find alternate employment. (Pascua v Khul-Schachter)

There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant. (Ortiz v. Shokar)

In Nishina v. Azuma Foods (Canada) Co., Ltd., the plaintiff alleged wrongful dismissal by her international employer. The plaintiff was a Japanese citizen who worked in the United States for a Japanese food product company as a foreign worker under the applicable United States immigration laws. She was asked by her employer to take a new role in Canada as Quality Control manager of a processing plant. Her employment contract for the Canadian position was closed, in that it stipulated that she was only allowed to work for her stated employer. She was terminated without cause or notice after two and a half years of successful employment in Vancouver. The Court held that she had been wrongfully dismissed, and, citing Bardal v. Globe & Mail Ltd., took the factors found in that ruling into account. The fouth factor, the availability of similar employment, having regard to the experience, training and qualifications of the employee, was noted as problematic as her immigration status in Canada was tied to her employment with that specific company. The Court stated that this factor weighed heavily in favour of a longer notice period.

In Major v. Philips Electronics Ltd., the plaintiff sued his employer for wrongful dismissal. The plaintiff had moved from India in order to take the position, and his immigration status was tied to his employment with that specific company. The Court held that he had been wrongfully dismissed, and when calculating the damages amount for payment in lieu of notice, took into account that he was required to retain legal counsel to regularize his immigration status before he was able to pursue further employment. This was upheld in Major v. Philips Electronics Ltd., where the Court of Appeal varied the award to take into account mitigation earnings overlooked by the trial judge.

In Mustaji v. Tjin, the plaintiff had been employed as a nanny by the defendants in Indonesia and Singapore. While so employed she was asked by her employers, the defendants, if she would join them in Canada and continue working as their nanny. She agreed and arrangements were made for her to work pursuant to the Foreign Domestic Movement Program. At trial, the jury found that the employers had taken over the affairs of the plaintiff in all dealings concerning her immigration and employment in Canada, and that the plaintiff had been brought to Canada by the defendants where she was without friends, she did not speak the language, she was unable to read English and she had no funds. While her immigration status was not noted, the jury concluded that the plaintiff had been exploited by the defendants during her employment by them in Canada. In light of this, they awarded her damages for breach of contract, punitive and exemplary damages, and double costs. The verdict was upheld on appeal.

Law

In Ortiz v. Shokar, 2018 BCPC 305 (CanLII), a temporary foreign worker with a closed work permit was dismissed without cause and without notice by her employer from her role as a live-in caregiver. Complicating matters, the parties had entered into the employment relationship illegally, and had furtively applied to legitimize the relationship while the employee was already working in the employer's home - the employer submitted a Labour Market Impact Assessment (LMIA) application bearing the employee's name. When Canada Border Services Agency (CBSA) became aware of the situation, they detained the employee at a holding centre and released her the next day. At this time, the employer removed the employee's name from her LMIA request, thereby preventing her from having her temporary resident status reinstated as a matter of course. The employee was forced to wait a considerable amount of time before she was able to receive an open work permit and find employment. These factors, and most importantly the inability of the employee to work at all while waiting for the appropriate applications to be processed, were considered by the Court when deciding on the appropriate length of notice. In determining the length of notice, the Court took into account the length of time it would reasonably have taken the employee to obtain an LMIA and a new work permit entitling the employee to work for that employer, complicated by the immigration issues that arose due to the conduct of the parties. The Court also took into account the responsibility of the employee in those circumstances by knowingly entering into an illegal employment relationship from the outset. Accordingly, the Court set the notice period at seven months:

[87] What might reasonable notice be in the unique circumstances of this case? The authorities are clear. A damage award for wrongful dismissal in an employment contract is meant to “compensate the employee for the amount of time that would reasonably be expected for that employee to find alternate employment”: Pascua, supra, at para 55. The following passage from Bardal v Globe and Mail Ltd., 1960 CanLII 294 (ON SC), [1960] OJ No. 149 (Ont H Ct J) para. 21 provides further guidance:

21
There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.

[88] Although similar cases are hard to find, I was referred to one nanny case wherein the plaintiff had worked for the defendant for one year. The award was for 1 month: Simms v Parkes, 2006 SKQB 326. On the other hand, in the Pascua decision (supra), the nanny was awarded 4 months’ salary after working for the employer for 2 years. In this latter case, the court noted that the defendant had seriously impeded the plaintiff’s ability to find work by virtue of the way she had handled the termination. She had wrongly alleged just cause and she had refused to provide a reference letter. The court in Pascua(supra) also made the following observation at para. 61:

61
Even though her employment period was just over two years, in my view it would be inadequate to simply give the plaintiff 2.5 months based on the length of service as suggested in the submissions of defendant's counsel. This approach would unduly emphasize the length of service and under emphasize the availability of similar employment.

[89] Counsel for Ms. Shokar has suggested that the reasonable notice period in this case would be four weeks. That proposal is based upon the in the Simms case (supra), the fact that Ms. Ortiz had worked for Ms. Shokar for less than 4 months (the illegal employment period) and the fact that her job required no special training. In my view, this proposal is woefully inadequate. It ignores the realities of the situation into which Ms. Ortiz was thrown when Ms. Shokar dismissed her and removed her name from the LMIA. These actions dramatically affected Ms. Ortiz’s employment prospects. It is inconceivable to me that one might reasonably have expected that it would only take a month for Ms. Ortiz to find a new employer. This proposal seriously underestimates the availability of other employment for Ms. Ortiz, which was essentially non-existent given the immigration problems that arose once the Shokar offer of employment evaporated. It also ignores the time it would take for her Ms. Ortiz to go through the foreign worker immigration process with a new employer, assuming she could even find one.

[90] Defence counsel has suggestion that a reasonable period of time for Ms. Ortiz to find alternate employment is the period up to the point when she received a new work permit (December 8, 2015). That gives us an end point; however, what is the start time for counting up the months of notice? When would the ‘reasonable notice’ period start? Ms. Ortiz could not even begin to work for Ms. Shokar (or anyone else) until she had her new work permit. Surely, the reasonable notice period could not be calculated from a point in time before Ms. Ortiz was actually able to work. We do know that Ms. Shokar was in a position to hire Ms. Ortiz as of November 3, 2015. That is when her LMIA approval came in. Had Ms. Ortiz’s name remained on the LMIA application, Ms. Ortiz’s temporary foreign resident status would have been restored, as required under s.182(1) of Regulations. Issuance of a new work permit would have been relatively straightforward. However, I do not have any concrete evidence as to when her application for restoration of status would have been formally granted. If I suggest December 8, 2015 as a hypothetical start date, and December 8, 2016 as an end date, then the reasonable notice period would work out to be 12 months. It seems to me that this approach gives us pretty much the same number of months that would have been payable under the 2 year fixed term.

[91] In my view, the above approach taken on behalf of Ms. Ortiz fails to adequately reflect the fact that this two-year contract was always one that could be terminated early. This has caused me to ask this question: Assume that the parties had never entered into the initial illegal employment arrangement. Instead, Ms, Ortiz was working for Ms. Shokar legally under a valid permit for a few months. What would a reasonable notice period be if Ms. Shokar dismissed Ms. Ortiz without cause and without written notice? The evidence before me suggests that it would take Ms. Ortiz and a new employer some 4 to 6 months to obtain a LMIA and a new work permit entitling Ms. Ortiz to work for that employer. It seems to me that this 4 to 6 month time estimate must at least set a baseline for determining what is reasonable notice in a nanny case involving the Federal government and a temporary foreign worker.

[92] The above scenario does not contain any of the immigration complications that exist in this case. Those complications cannot be ignored. The final and most serious ‘immigration event’ occurred when Ms. Shokar unilaterally removed Ms. Ortiz’s name from her LMIA application on September 15, 2015, thereby undermining Ms. Ortiz’s ability to obtain a valid work permit. Once Ms. Ortiz’s name was removed from the LMIA, her status in Canada was in peril. She had to apply for a bridge extension permit. She was summoned to a removal hearing. Eventually there was an order requiring her removal from the country. In the above circumstances, it was inevitable that the time Ms. Ortiz needed to regularize her status such that she could again be employable would be lengthened beyond the 4 to 6 months described above.

[93] In assessing what reasonable notice might be in this case, I am taking into account the totality of the circumstances that might have impacted the time it would take Ms. Ortiz to secure her legal status and find new employment, including the conduct of the parties prior to the collapse of the employment relationship. Ms. Shokar and Ms. Ortiz both knowingly embarked upon an illegal employment relationship that resulted in the September 12, 2015 arrest of Ms. Ortiz. They both bear responsibility for that illegal activity, although it would seem that only Ms. Ortiz has suffered any consequences. It is clear that this activity is what triggered Ms. Ortiz’s subsequent immigration problems. In my view, like Ms. Shokar, she bears some responsibility for her predicament with the immigration authorities and for her inability to work pending resolution of those problems. The notice period should reflect the fact that she too contributed to the length of time it took for her to be able to work again.

In Nishina v. Azuma Foods (Canada) Co., Ltd., 2010 BCSC 502 (CanLII), the plaintiff alleged wrongful dismissal by her international employer. The plaintiff was a Japanese citizen who worked in the United States for a Japanese food product company as a foreign worker under the applicable United States immigration laws. She was asked by her employer to take a new role in Canada as Quality Control manager of a processing plant. Her employment contract for the Canadian position was closed, in that it stipulated that she was only allowed to work for her stated employer. She was terminated without cause or notice after two and a half years of successful employment in Vancouver. The Court held that she had been wrongfully dismissed, and, citing Bardal v. Globe & Mail Ltd., 1960 CanLII 294 (ON SC), took the factors found in that ruling into account. The fouth factor, the availability of similar employment, having regard to the experience, training and qualifications of the employee, was noted as problematic as her immigration status in Canada was tied to her employment with that specific company. The Court stated that this factor weighed heavily in favour of a longer notice period:

[249] I will consider each of the Bardal criteria in turn:

(a) The character of the employment
During her employment at Azuma Foods International, from June 2001 to August 2005, Ms. Nishina first worked as an accounting assistant, and then moved to the QC department. During her employment at Azuma Foods, from August 2005 to October 2007, Ms. Nishina worked as QC supervisor until shortly before the termination of her employment, when her title changed to that of QC associate. Ms. Nishina’s role in the QC department at Azuma Foods—to ensure that the company met the standards set out in food safety regulations—was essential to the company’s operation. She held a position of considerable importance within the company.
(b) The length of service of the employee
Ms. Nishina worked for Azuma Foods International and Azuma Foods for a total of six years and four and one-half months. This is not a negligible period of time.
(c) The age of the employee
At the time of dismissal in October 2007, Ms. Nishina was 43 years of age.
(d) The availability of similar employment, having regard to the experience, training and qualifications of the employee
At the time of dismissal, Ms. Nishina had been trained and had worked as a QC supervisor for several years. However, her immigration status in Canada was tied to her employment with Azuma Foods, such that she could not work for another employer. This set of circumstances seems almost akin to the situation where an employee is dismissed in a one-employer town. That is, an employee, though qualified and experienced, faces a dearth of alternate employment prospects. This factor weighs heavily in favour of a longer notice period. Azuma Foods knew when it dismissed Ms. Nishina that she could not work for another employer.


[250] Having considered these factors, I conclude that the appropriate period for reasonable notice in this case is 12 months. Ms. Nishina claims that her overall annual income (including her average overtime hours) is equivalent to $52,148. Azuma Foods did not contest this measure of Ms. Nishina’s salary. Therefore, this measure of Ms. Nishina’s annual salary is the amount to which she is entitled as damages in lieu of 12 months’ reasonable notice.

In Major v. Philips Electronics Ltd., 2004 BCSC 438 (CanLII), the plaintiff sued his employer for wrongful dismissal. The plaintiff had moved from India in order to take the position, and his immigration status was tied to his employment with that specific company. The Court held that he had been wrongfully dismissed, and when calculating the damages amount for payment in lieu of notice, took into account that he was required to retain legal counsel to regularize his immigration status before he was able to pursue further employment. This was upheld in Major v. Philips Electronics Ltd., 2005 BCCA 170 (CanLII), where the Court of Appeal varied the award to take into account mitigation earnings overlooked by the trial judge:

[44] Mr. Major’s work permit was specific to the Richmond plant and that hampered his efforts to obtain new employment after his termination by Holley. He had to retain legal counsel to regularize his immigration status. He could not go to the United States right away because his wife would not be able to come with him for approximately one year.

[45] He searched for employment, primarily over the internet, but was not successful until February 4, 2003 when he obtained employment with Carmanah Technology in Victoria, British Columbia, first on a contract basis and then, on April 1, 2003, full time. Philips has not alleged that, in this respect, he failed to mitigate his damages.

c. Conclusion – Notice Period


[46] I have taken into account that Mr. Major is 50, highly educated, and had significant managerial experience with Philips before taking the position at the Richmond Plant. He was in a senior management position over the seven years of his employment. His position at the Richmond Plant was very senior with considerable responsibility. He had every reason to believe when he accepted the Richmond position that it was a long term position in which his career would advance even further. He had to relocate to obtain the position, lost his “ex-pat” status, and was left in the position where he only had a work permit for that specific employment. In these circumstances an appropriate notice period is an additional twelve months at an income of $198,000 per annum. His earnings at Holley will be deducted.

In Pro Cabinet Design Limited v. Lawis, 2021 NLSC 63 (CanLII), (facts found in Lawis v Pro Cabinet Design Limited and Coastal Marine Limited, 2018 CanLII 95659 (NL PC)), the Newfoundland Superior Court upheld the ruling of Orr J. in a disupute regarding the wrongful dismissal of an employee under the Temporary Foreign Worker Program, which stipulates that the worker is unauthorized to work for any employer other than the one stipulated in their employment contract. In this case, the employer contracted the employee to a work contract for the duration of two years. The employee then came to Canada and worked for the employer for one year before he was terminated without cause with one week's notice. While it was noted in the ruling that the employee was subject to the closed work permit conditions of the TFWP, this was not taken into consideration in the quantum of damages. The Court, upon review of the contract, found that there was no notice period in the contract and awarded the employee the balance of wages on the terms of the original fixed length:

[14] Dealing with the claim for wrongful dismissal and failure to provide notice: In Machtinger v. HOJ Industries Ltd., 1992 CanLII 102 (SCC), [1992] 1 S.C.R. 986Mr. Justice Iaccobucci stated:

The history of the common law principle that a contract for employment for an indefinite period is terminable only if reasonable notice is given is a long and interesting one, going back at least to 1562 and the Statute of Artificers, 5 Eliz. 1, c. 4. The Statute of Artificers prohibited employers from dismissing their servants unless sufficient cause had been shown before two justices of the peace: see S. M. Jacoby, "The Duration of Indefinite Employment Contracts in the United States and England: An Historical Analysis" (1982), 5 Comp. Lab. L.J. 85, at p. 88. By the middle of the nineteenth century, however, English courts were beginning to imply a term into contracts of employment that the contract could be terminated without cause provided that reasonable notice was given. Although it was initially necessary to prove the incorporation of a custom of termination on reasonable notice into the contract in each particular case, the English courts gradually came to accept reasonable notice as a contractual term to be implied in the absence of evidence to the contrary: M. R. Freedland, The Contract of Employment (1976), at pp. 151-54. In Canada, it has been established since at least 1936 that employment contracts for an indefinite period require the employer, absent express contractual language to the contrary, to give reasonable notice of an intention to terminate the contract if the dismissal is without cause: Carter v. Bell & Sons (Canada) Ltd., 1936 CanLII 75 (ON CA), [1936] O.R. 290 (C.A.).
This is the approach taken by Freedland, supra, who states that, "the pattern of contract now generally accepted and applied by the courts in the absence of evidence to the contrary is one of employment for an indefinite period terminable by either party upon reasonable notice, but only upon reasonable notice" (p. 153). The same approach was adopted by the Ontario Court of Appeal in Prozak v. Bell Telephone Co. of Canada (1984),
1984 CanLII 2065 (ON CA), 46 O.R. (2d) 385. Writing for the court, Goodman J.A. noted at p. 399 that, "if a contract of employment makes no express or specifically implied provision for its duration or termination, there is likely to be implied at common law a presumption that the contract is for an indefinite period and terminable by a reasonable notice given by either party. . .". Basically, this is also the approach taken by I. Christie, in Employment Law in Canada (1980), at p. 347.

What constitutes reasonable notice will vary with the circumstances of any particular case. The most frequently cited enumeration of factors relevant to the assessment of reasonable notice is from the judgment of McRuer C.J.H.C. in Bardal, supra, at p. 145:

There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.”

[15] In this case, the employment contract was for a specified term. Paragraph 1 of the contract states:

“This contract shall have duration of 24 Months from the date the employee assumes his functions.”

[16] In Nugent v. Midland Doherty Ltd., 1989 CanLII 5222 (BC CA), the British Columbia Court of Appeal held:

The rule is stated by the respondent in its factum in this way:
Where, under a contract of employment, remuneration is payable at the end of a certain period, the contract is an "entire contract" and the employee is bound to complete that period before he becomes entitled to receive the remuneration.
The rule is discussed in Glanville Willams, "Partial Performance of Entire Contracts (1941), 57 L.Q. Rev. 373 at pp. 375-8, and support for the statement is found in Hope v. Capilano Volkswagen Ltd. (1986), 87 C.L.L.C. ¶14,006 at p. 12,069 (B.C.S.C.), a case where the plaintiff abandoned his employment well before the conclusion of the fiscal year when a bonus would have been declared, and in Pimlott v. Marbridge Investments Ltd. (1967),
1967 CanLII 554 (BC CA), 61 D.L.R. (2d) 309 (B.C.C.A.).

[17] On the face of the agreement Mr. Lawis was to be paid bi-weekly up to the balance of the outstanding term of the agreement. The contract does specify that the agreement can be terminated at paragraph 19.

“ the Employer must give written notice before terminating the contract of the Employee if the Employee has completed 3 months of uninterrupted service with the Employer and if the contract is not about to expire. This notice shall be provided at least one week in advance.

[18] The above paragraph does not specify any period of notice that would apply and does not require the Employer to provide any reasons for termination. The evidence was that Mr. Lawis was terminated as a result of a “lack of work.” There was no suggestion that Mr. Lawis was in breach of his agreement.

[19] Mr. Lawis worked for the defendant company from the 11th of August 2014 until the 20th of August 2015. The contract would have expired on the 10th of August 2016. Counsel for the defendant has taken the positon that the employer terminated the agreement by providing one week’s notice in writing.

[20] In Miller v. Convergys CMG Canada Limited, 2014 BCCA 311
The Court of Appeal considered the interpretation of employment contracts holding:

The court should strive to give effect to what the parties reasonably intended to agree to when the contract was made.
The language of the contract should be given its plain and literal meaning, and be interpreted in the context of the entire agreement. Consideration also may be given to the factual matrix surrounding the creation of the contract.
If the contractual language reveals two possible interpretations, the court should seek to resolve this ambiguity by searching for an interpretation that reflects the true intent and reasonable expectations of the parties when they entered the contract, and achieves a result consistent with commercial efficacy and good sense. Considerations of reasonableness and fairness inform this exercise.
If these principles do not resolve the ambiguity, then extrinsic evidence may be admissible to assist in ascertaining the parties’ intent.
As a last resort only, the principle of contra proferentem may be invoked to favour construction of the ambiguity against the party who drafted the agreement. The principle of contra proferentum may not be used, however, to create or magnify an ambiguity.
Employment contracts should be interpreted in a manner that favours employment law principles, specifically the protection of vulnerable employees in their dealings with their employers. Even so, the construction of an employment contract remains an exercise in contractual interpretation, and the intentions of the parties will generally prevail, even if this detracts from employment law goals that are otherwise presumed to apply.


[21] In Mr. Lawis’s case, it would be unreasonable to interpret the clause in such a way that it allowed the employer to terminate the agreement without cause on one weeks’ notice. Considering all the facts and specifically that the agreement was for a term of two years and involved the employee leaving his current employment and traveling from the Philippines at his own expense. The clause does not specify any notice period and as a result must be read as not setting out a notice period. I find as a result that Mr. Lawis is entitled to be paid the balance of the unexpired term of the agreement.

In Mustaji v. Tjin, 1996 CanLII 1907 (BC CA), the plaintiff had been employed as a nanny by the defendants in Indonesia and Singapore. While so employed she was asked by her employers, the defendants, if she would join them in Canada and continue working as their nanny. She agreed and arrangements were made for her to work pursuant to the Foreign Domestic Movement Program. At trial, the jury found that the employers had taken over the affairs of the plaintiff in all dealings concerning her immigration and employment in Canada, and that the plaintiff had been brought to Canada by the defendants where she was without friends, she did not speak the language, she was unable to read English and she had no funds. While her immigration status was not noted, the jury concluded that the plaintiff had been exploited by the defendants during her employment by them in Canada. In light of this, they awarded her damages for breach of contract, punitive and exemplary damages, and double costs. The verdict was upheld on appeal:

5 The defendants' initial position in this action was that an employment contract did not exist. However, at trial, counsel for the defendants conceded there was a contract of employment. The basis for that contract was set out in the document pursuant to the Foreign Domestic Movement Program. As the document had not been signed by the defendant Rosna Elly Tjin, it was contended that she was not bound by its terms.

6 The plaintiff testified that after her arrival in Vancouver she worked as the live-in servant of the defendants and as their nanny seven days a week, 365 days a year and was not paid in accordance with the contract. She testified she was given $40 or $50 every two or three months. When the time came for her to apply for landed immigrant status, two years after her arrival, an account was established for her at a bank with an initial deposit of $4,300 made by the defendants. The plaintiff testified that while living with and working for the defendants she had been denied the use of the telephone; denied the freedom to go out on her own, except to ESL classes and a cooking class; denied the opportunity to invite friends home and, in general, lived in fear of losing her employment and being left alone in a strange country.
[...]

11 The case for the plaintiff at trial was that she had been exploited by the defendants. They sought to isolate her and to intimidate her and to get as much work from her as was possible. When the defendants brought the plaintiff to Canada she was without friends, she did not speak the language, she was unable to read English and she had no funds. As a result of those circumstances she lived in fear that if she displeased Mrs. Tjin she might be dismissed and left alone in a strange country.

12        At trial counsel agreed on a list of questions to be left with the jury.  Those questions and the answers to those questions are as follows:
[...]

8. Do you find the plaintiff was in a position of trust, vulnerability and dependence on the defendants?
  Answer:  Yes
9. Do you find the defendants took over the affairs of the plaintiff in all dealings concerning her immigration and employment in Canada?
           Answer:  Yes
10. Do you find that the defendants had the opportunity to exercise power or discretion over the affairs of the plaintiff?
           Answer:  Yes
11. If the answer to Question 10 is "yes", do you find that the defendants had the capability of using that power or discretion without the plaintiff's consent or knowledge in such a way as to affect her legal or practical interests?
           Answer:  Yes
12. If the answer to Question 11 is "yes", was the plaintiff especially vulnerable to the defendants' exercise of that discretion or control?
       Answer:  Yes
13. From those answers it is apparent that the jury concluded that the defendants had exploited the plaintiff during the period she was employed by them in Canada.

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