Will the COVID-19 pandemic lengthen the reasonable notice period at common law?

In 2020, this question was frequently asked, often speculated upon, and basically unanswered. Since there is a lag between the commencement of litigation and decided case law, it will understandably take time before the court cases commenced in 2020 for wrongful dismissal lawsuits result in decisions.

Nevertheless, in a recently released Superior Court of Ontario decision entitled Yee v. Hudson’s Bay Company (2021) ONSC 387 (CanLII), whilst Mr. Yee’s termination occurred before the pandemic, this decision, which was rendered in January 2021, gives insight into how the courts are going to approach the impact of the pandemic on the reasonable notice period.

As a backdrop, before the pandemic, counsel has often asked the question of how a depression and/or an economic downturn impacts the notice period: should it shorten the reasonable notice period so that the brunt of the economic downturn is borne by employees, or should it lengthen the reasonable notice period, thereby allocating that risk to employers and beefing up the protection of employees, or should an economic downturn not have any net effect?

In Yee, the court noted at para. 21:

In support of Melvin Yee’s position, I was directed to the statement by Justice Perell in Paquette v. TeraGo Networks Inc., 2015 ONSC 4189 (at paragraph 27) that “Economic factors such as a downturn in the economy or in a particular industry or sector of the economy that indicate that an employee may have difficulty finding another position may justify a longer notice period”. However, that statement needs to be considered with the statement in Holland v. Hostopia.com Inc., 2015 ONCA 762 (at paragraph 61) 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”.

Importantly, Justice Dow went on to state at para. 22:

“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.”

Although Yee was not terminated during the pandemic, the above sentiments of Justice Dow indicate, first, that the pandemic will attract consideration by the court in terms of what quantity of notice is reasonable. Second, Justice Dow’s insight indicates that the COVID pandemic will have a negative effect on finding comparable employment (“it’s negative effect”).

In light of evidence of surges in unemployment in Ontario in 2020 and 2021, we await decisions to see if the court will go so far as to take ‘judicial notice’ that the COVID pandemic has had a negative effect on the ability of employees to find comparable employment, as well as decisions that provide guidance on how precisely the COVID pandemic will impact the reasonable notice period.

Accordingly, if plaintiff’s counsel would normally be seeking a reasonable notice period of “x” months in lieu-of-notice in light of the Bardal v. Globe & Mail factors, a few months should be added to account for the negative effect of finding comparable employment opportunities.

Disclaimer: this blog does not constitute legal advice and is not intended to be a summary of the law relating to wrongful dismissal during the COVID 19 pandemic. If you have an employment-related question relating to your entitlements upon termination, it is best to contact a lawyer. Please do not hesitate to reach out for a consultation: colin@cuttresslaw.com