Covid-19 May be Considered a Factor in Increasing Reasonable Notice

Yee v Hudson’s Bay Company, 2021 ONSC 387

On August 28, 2019 Yee’s employment with the Hudson’s Bay Company (“HBC”) was terminated and Yee started a claim for wrongful dismissal.  As expected, the judge in the Ontario Supreme Court applied the Bardal factors in his analysis; however it is noteworthy that as part of his decision the judge held that the Covid-19 pandemic could be a factor that may increase a dismissed employee’s entitlement to reasonable notice if the dismissal occurred after the start of the pandemic.

Facts

Yee worked for HBC for 12 years. At the time of his termination, Yee was a senior executive and held the position of Director, Product Design and Development.  His income at termination was $162,353 plus benefits, pension plan contributions, and performance incentives.  In Yee’s claim for wrongful dismissal he sought damages equivalent to 18 months’ reasonable notice.  At trial he was 62 years old, and despite sending over 90 job applications since February 2020, he was unable to find a new job.  HBC’s position was that 11 months of reasonable notice was appropriate.

The judge applied the well-known “cornerstones” outlined in the Bardal case to determine the reasonable length of notice:

1) age;

2) length of service;

3) character of employment; and

4) availability of similar employment having regard to the experience, training, and qualification of the employee. 

The judge held that Yee’s age and character of employment favored a longer period of reasonable notice; however, Yee’s length of service was a neutral factor.  In terms of the fourth factor, Yee argued that the Covid-19 pandemic provided a basis for the court to award a longer notice period as it significantly decreased the availability of comparable employment. 

The judge ultimately awarded damages based on 16 months’ notice.  With respect to the fourth factor, the judge focused on the fact that Yee was terminated prior to the start of the Covid-19 pandemic.  The judge reiterated a statement from an earlier case, Holland v. Hostopia.com Inc., 2015 ONCA 762 that

“Notice is to be determined by the circumstances existing at the time of termination and not by the amount of time that it takes the employee to find employment.” 

The judge in this case then stated:

“It seems clear terminations which occurred before the COVID pandemic and its effect on employment opportunities should not attract the same consideration as termination after the beginning of the COVID pandemic and its negative effect on finding comparable employment.”

The economic conditions due to the pandemic that arose after Yee’s termination therefore appeared to be irrelevant to the Bardal analysis.

Notes to Employer

Although there has been some positive news with respect to the Covid-19 pandemic in terms of vaccinations and a downward trend in cases, the negative effects of the pandemic on the economy are still prevalent.  Employers need to be mindful of the fact that when terminating employees, the effects of the Covid-19 pandemic on the job market, in other words the lack of similar employment, may be considered as a factor in favor of increasing the amount of reasonable notice determined.

Have further questions regarding this publication? This post was authored by Ryan Chan. Please don’t hesitate to contact him at [email protected] or anyone else listed on the authors page.