Click HERE to read Part I of our two-series on COVID-19's impact on the law of wrongful dismissal
It has now been a year since the first COVID-19 case was confirmed in Canada, and it is obvious that the pandemic has affected all aspects of Canadian life. Thousands of individuals across the country have lost their jobs as industries have been forced into a period of uncertainty.
In our recent blog post, we discussed the impact the pandemic may have on employees' legal entitlements on termination. We concluded that employees whose employment has been terminated during the pandemic should be entitled to longer notice periods as a result of the increased difficulty in finding comparable work. Despite this, some employers continue to argue that employees' notice periods should be shortened to account for the difficult financial circumstances employers are encountering.
Courts have not yet dealt directly with the question, though four recent cases provide some insight into how courts are grappling with this issue. These decisions reveal that courts are taking note that the COVID-19 pandemic has impacted job opportunities and is making it more difficult for employees to find new employment. How exactly this will all play out as the pandemic wears on still remains to be seen.
In one case, Yee v. Hudson’s Bay Company (decision released December 15, 2020), the Court directly considered whether it should award a longer notice period because the employee experienced increased difficulty when looking for work during the pandemic. The Plaintiff in this case, Mr. Yee, was an executive with the Hudson’s Bay Company (“HBC”), was terminated from his employment in August 2019 after working for the company for more than 11 years. He was 62 years old at the time of the hearing.
Although his employment ended before the pandemic began, Mr. Yee argued the intervening pandemic made his job search much more difficult, and requested the Court consider this when determining his notice period.
Justice Dow agreed that the pandemic and the economic downturn would be relevant considerations for someone whose employment was terminated during the pandemic. However, he noted that reasonable notice is determined based on the circumstances at the time of the termination. Mr. Yee's employment was terminated in August 2019, before the pandemic began, and so could not be properly considered in the assessment of notice damages:
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.
After considering all of the relevant factors in his case, the court awarded Mr. Yee 16 months’ reasonable notice.
In a more recent decision Iriotakis v Pennisula Employment Services Ltd (released February 9, 2021), the Court faced a similar question. The Plaintiff in this case also argued he should receive a longer notice period due to the increased difficulty in finding a job. Unlike Mr. Yee, whose employment was terminated well before the pandemic began, Mr. Iriotakis' employment had been terminated without cause on March 25, 2020, just days after the shutdown began in Ontario.
Like Justice Dow in Yee, Justice Dunphy held that reasonable notice damages must be determined at the time of the employee's termination. Mr. Iriotakis' employment was terminated just days into the pandemic at a time when, according to Justice Dunphy, "the impact of the pandemic on the economy in general and on the job market, in particular, was highly speculative and uncertain both as to degree and to duration". Although the pandemic ultimately had a huge impact on the economy and the availability of jobs, Justice Dunphy noted he could not apply "hindsight to the measuring of reasonable notice". Accordingly, he found that COVID-19 did not have a signfiicant impact on Mr. Iriotakis' notice period, given that the situation was relatively unknown at the time of his termination. It will be interesting to see how widely this decision is relied upon in the future, especially considering how many employees were terminated at this precarious time.
Before Yee and Iriotakis, two other court decisions also commented on the pandemic's potential impact on notice periods.
In George v. Laurentian Bank Securities Inc, the court also made mention of the economic realities of the pandemic. The Plaintiff's employment had been terminated without cause from his job as Vice President, Equity Trading, with the Laurentian Bank in March 2019. Mr. George had approximately 4.5 months’ service when his employment was terminated. He was 58 years old at the time.
The court held that in the time between his termination and the hearing of the matter, Mr. George had made reasonable efforts to mitigate his damages but remained unemployed. Here, in the context of Mr. George’s mitigation efforts, the court took note of the Covid-19 pandemic:
Unfortunately for Mr George, as at the date of the hearing of this motion, and despite numerous efforts as reflected in the record, he remained unemployed. Furthermore, at the time of the hearing of this motion, Ontario continued to be coping with the economic realities of COVID-19.
Ultimately, the court held that Mr. George was entitled to 2 months’ reasonable notice.
While the court noted the “economic realities” of the pandemic, this did not expressly factor into its assessment of what Mr. George’s reasonable notice should be. It did not overtly lengthen his notice period, but the court’s mention of the pandemic in the context of Mr. George’s inability to find new work may suggest that the lack of job opportunities was a consideration.
Importantly, there was no suggestion that because of the economic downturn Mr. George would be owed less to account for any losses the employer may have incurred because of the pandemic.
Finally, in Rothenberg v. Rogers Media Inc, the Court took a similar approach in its comments regarding the pandemic's impact. The Plaintiff in this case, Mr. Rothenberg, was a news reporter and on-air broadcaster with two radio stations out of Tillsonberg, Ontario. He had been employed for his entire working life in radio broadcasting, approximately 55 years. He did not have a high school diploma nor any post-secondary education. Mr. Rothenberg was terminated without cause in August 2018 when he was nearly 73 years old. He had almost 20 years’ employment with Rogers and its predecessor company.
Mr. Rothenberg undertook efforts to find new employment but was unable to find any opportunities within a reasonable commute from his home and that did not require post-secondary education. The court also took note that in March 2020 the pandemic began:
In March 2020, the economy in Ontario including Southwestern Ontario took a drastic downturn due to COVID-19 making jobs even more scarce. The number of unemployed persons campaigning for any available jobs also increased.
The court held that given the facts and evidence, Mr. Rothenberg was entitled to notice “towards the higher end of the scale”, and ultimately awarded him 21 months’ notice. This was based on the specialized nature of his employment in the radio industry, his length of service, his age and the lack of availability of similar employment.
With respect to mitigation, the court held that Mr. Rothenberg had taken reasonable steps to mitigate his damages, but that no suitable replacement employment could be found. The court again took note of the pandemic, referring to the fact that there were no suitable radio broadcasting positions available, “including after the admitted significant economic downturn as of March 2020 because of COVID-19.” While the pandemic was not an explicit factor in calculating the length of the notice period, it was still considered by the court.
As the pandemic wears on, courts will have to continue to address COVID-19 in employment and employment termination matters. Eventually, the Courts will also have to more directly address COVID-19's impact on the thousands of employees who lost their jobs in the midst of the pandemic.
If you have been terminated from your employment and would like advice on what to do next, reach out to one of Cavalluzzo’s experienced lawyers who would be happy to help you.