Beware of the One Month Per Year of Service “Rule” Part 2

May 27, 2014

A recent post cautioned employers to beware of using the one month per year of service “rule of thumb”. The Ontario Superior Court of Justice has once again affirmed that, depending on the circumstances, courts are willing to award short service employees significantly more than one month per year of service.

In Wellman v The Herjavec Group Inc., 2014 ONSC 2039, an employee with only 51 weeks of service was awarded damages equivalent to four months of notice.

The Court considered the following factors in setting the notice period:

  • Age: The employee was 40 years old at the time of dismissal. The Court found that his mid-range age was a neutral factor. It found that he was young enough, and had enough of his working life ahead of him, to still be of interest to employers. However, it was also reasonable to assume that, by his age, he could have family responsibilities that might make him less mobile than a young person.
  • Length of service: The Court noted that while the employee only had a short period of service, there should not be too much emphasis placed on the length of service as it is only one of the factors to be taken into account.
  • Experience, training and qualifications of the employee: The Court noted that the employee had diplomas in Industrial Engineering Technology and Computer Systems Technology, as well as three separate certifications in the technology field. The Court also noted that between 1999 and 2012, the employee had worked for four employers in the IT field. It did not comment on the effect of this history, or weight of this factor.
  • Character of employment: The Court found that the nature of the employment militated a longer notice period because the employee managed key accounts with major customers and was the single interface between the sales and operational sides of the business. The Court concluded that the employee was in middle to senior management, but he was not in the “high echelons of power and authority”.
  • Availability of similar employment and mitigation efforts: The employee secured alternate employment five months after his dismissal in December, 2013. The Court found that it was reasonable for him to spend five months seeking employment in the Ottawa area, where he and his family were established, before looking farther afield.
  • Nature of the industry: The employer argued that the expectations within the IT sector are that employees are used to changing jobs on a frequent basis. The Court noted that while this may have been the case, the unconverted evidence of the employee was that he expected to be employed with the Company for a minimum of three years. The Court found that this was not an unreasonable expectation.

Taking all of these factors into account, the Court held that the appropriate notice period was four months. It noted that this was consistent with the cases provided by the parties’ counsel.

This case again affirms that, depending on the circumstances, employers may be required to provide more than one month per year of service when dismissing an employee without cause. Employers would be advised to obtain legal advice on the potential notice period that an employee could be awarded in order to assess the risks before dismissing an employee.

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