Pound v. iWave, 2017 PECA 17, a recent decision by the Prince Edward Island Court of Appeal, is a cautionary tale for employers about the legal issues that may arise when standard form employment policies are adopted without management fully understanding their obligations to employees in practice.read more
Beware of the One Month Per Year of Service “Rule”: Part 4
There continues to be a seemingly never-ending stream of cases which confirm the perils of assuming that an employer’s liability for reasonable notice of termination will be capped at one month per year of employment.
In Sciancamerli v Comtech (Communication Technologies) Ltd., 2014 BCSC 2140, a Senior Account Executive was dismissed after just 10 months of employment and provided 1 week of pay-in-lieu of notice. The employee filed a wrongful dismissal action and claimed that he was entitled to 5-6 months’ notice. The employer asserted that the employee’s entitlement was between 2.5 weeks to 2 months.
The Court considered the following factors in setting the notice period:
- Character of the employment: the position was primarily a sales position, but it required a person with specific knowledge in the industry. The plaintiff had a degree of specialization which justified an increased notice period.
- Age: the plaintiff was 57 years old at the time of his termination. While the Court noted that there were cases to support the proposition that a person in their 50s or 60s will have more difficulty finding employment, it concluded that the detriment which may exist because of the plaintiff’s age was offset by his experience. The Court declined to increase the notice period based on his age.
- Length of service: The Court stated that “there is no dispute that the case law states that short-term employees are entitled to a proportionately longer period of notice” and concluded that the plaintiff’s short service weighs in favour of a longer notice period. (para 35)
- Availability of similar employment: The plaintiff was unemployed at the time of trial, and submitted a log of the large number of jobs he sought across Canada and internationally. The Court found that the plaintiff proved there was a lack of available positions, which favoured a longer notice period.
The Court concluded based on a review of analogous cases that a short-term employee in a similar position to the plaintiff is typically entitled to between two and three months’ notice. However, the Court found that the plaintiff was entitled to a longer notice period because of the specialization required for his position and the lack of availability of similar employment. The Court awarded the plaintiff 5 months’ notice (half of his entire period of employment).
This case again reminds employers that the determination of the reasonable notice period is highly contextual and estimating the notice period based on one month per year of service is often inaccurate.