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
Court Finds “Extraordinary” Circumstances to Award 27 Months’ Notice
The dismissal of a long-term employee who is entitled to common law reasonable notice can result in significant liability for an employer. As the determination of the appropriate notice period is contextual, it can be difficult for an employer to accurately assess their potential liability. Typically, an employer can be confident that the employee’s notice entitlement will be “capped” at 24 months. However, employers should be aware that courts can award more than 24 months in extraordinary circumstances.
Markoulakis v Snc-lavalin Inc., 2015 ONSC 1081, is a recent case in which the Court found that there were extraordinary circumstances to go beyond 24 months’ notice. In that case, the former employee (a Senior Civil Engineer) had been employed for nearly 41 years and was 65 years old at the time of termination. He took the position that he was entitled to 30 months of notice, but the employer argued that 34 weeks (the amount it had already paid the plaintiff) was sufficient.
The Court found that, based on the circumstances of the case, the former employee was entitled to 27 months of notice. The Court stated that “[t]he fact that the Plaintiff is over 65, has more than 40 years of service with the Defendant, his only employer, is in my view, exceptional.” (para 37)
This case affirms that, if an employer dismisses a long-term, older employee (particularly if they are over 60), the employer should be prepared for the risk that a court could award more than 24 months of notice.