What factors should be considered in determining the length of reasonable notice?

Cabott v. Urban Systems Ltd., 2016 YKCA 4

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It goes without saying that determining what length of notice is “reasonable” in circumstances of dismissal without cause, is not a precise science and it is very much dependent on the specific facts of each particular case.  But what factors are appropriate to be considered by the employer?  The answer to that question is the important message to be taken from Cabott vs. Urban Systems Ltd., a recent decision of the Yukon Territory Court of Appeal.

Cabott was employed in a senior professional position with Urban Systems Ltd, having commenced her employment in Whitehorse on or about April 3, 2013.  She was dismissed without cause on or about May 27, 2014, only 14 months after she was hired.  Urban Systems gave Cabott two weeks pay as required under the Territory’s labour legislation and an additional 12 weeks of pay in lieu of notice.  Cabott sued for wrongful dismissal arguing the company failed to provide her with reasonable notice.

At trial, the judge referred to the so-called Bardal factors in his determination of reasonable notice.  The Bardal factors have been the foundation for the court’s determination of reasonable notice since 1960 and were originally enunciated in the Ontario High Court case Bardal v. Globe & Mail Ltd. (1960), 24 D.L.R. (2d) 140.  Included in the Bardal factors are such considerations as: the character of the employment, the length of service, the age of the employee and the availability of similar employment, having regard to the employee’s experience, training, and qualifications.  What is important to recognize is that all of the Bardal factors arise from within the context of the employment relationship and within the context of the contract of employment. 

In fixing the appropriate length of reasonable notice in Cabott the trial judge referred to the various Bardal factors and then continued on to say: “However, when one considers also the plaintiff’s age of 53 years…. the  expectation of secure employment and possible transition of work and retirement to Vancouver…. I conclude an appropriate period of notice in this case is six months”.

Urban Systems Ltd. appealed the trial judge’s decision arguing the award of six months notice was excessive and should be reduced. The court of appeal carefully reviewed the wealth of case law dealing with reasonable notice and made a number of observations.  First, the court stated that five months notice was at the very high end of the range of reasonable notice in cases similarly situated to Cabott v. Urban Systems Ltd.  The trial judge in Cabott awarded six month’s pay in lieu of notice,  one full month beyond what the appeal court determined was the very high end of the range.  Secondly,the court determined, upon reviewing the British Columbia jurisprudence on reasonable notice, that an average notice period of two to three months was more appropriate for cases similar to Cabott.

In Cabott, the appeal court found that, absent special circumstances, the notice  Cabott was entitled to, based on the Bardal factors, was in the vicinity of three months.  At trial, however, the trial judge referred to Cabott’s “expectation of secure employment and the possible eventual transition of work and retirement to Vancouver” as additional factors to be considered in fixing what the length of reasonable notice should be.  In other words, the trial judge treated these factors as special circumstances justifying an increase in the notice period to six months.

The court of appeal found that the trial judge erred in considering the additional factors of secure employment and transition of work and retirement to Vancouver in determining the appropriate length of notice.  These additional factors were not part of the contract of employment. Had they been intended to be part of the contract, they would have had to have been explicitly referred to in the contract.  As the court put it, the unilateral life plan of the employee cannot be considered a special circumstance justifying an increase in the length of reasonable notice. The court of appeal reduced the notice period from six months to four months.

The takeaway from Cabott for employers and employees is that the length of reasonable notice continues to be based essentially on the Bardal factors or some version of the Bardal factors.  Factors that are outside the employment contact, as important as they may be to the employee, are not a consideration in fixing the length of reasonable notice.

 

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