Court Awards 24 Months Notice and References Employer Offers;

In Ozorio v Canadian Hearing Society ( 2016 ONSC 5440) Justice O’Marra awarded  24 months months notice to a 60 year old Regional Director with 30 years service making $102,000 per annum.

The judgement also lists  14 cases where a Court awarded 24 months notice or better.

What I found even more interesting however was the judges detailed comments about the prior offers that the Employer had made. Here are those comments:

7. On November 18, 2015, the defendant’s new President and CEO, Ms. Julia Dumanian, met with the plaintiff and “without any warning” according to the plaintiff presented her with a “voluntary separation offer”. The terms of the offer would have provided the plaintiff with $93,000, less than her annual salary, in exchange for a release. Ms. Dumanian left the offer with the plaintiff for her review and any independent advice. On or about November 25, 2015, the plaintiff declined the offer as in her view it was unfair and inadequate given her long tenure and senior role in the organization,
8. On November 30, 2015, the defendant sent the plaintiff a termination letter then offering 12 months’ pay (approximately $97,000) and limited contribution of benefits for 2 months. No offer was made to provide the plaintiff with a letter of reference or any out-placement counselling services to assist her with alternative employment.
9. In lieu of acceptance, the defendant chose to pay the plaintiff her regular salary from November 30, 2015 to July 27, 2016, the minimal 34 week period for statutory notice and severance pay compliance under the Employment Standards Act, 2000 S.O. 2000 C. 41, in addition to benefit coverage for 8 weeks.

12. The defendant’s position has changed considerably since its original offers. Initially, the offer was basically 12 months’ salary in lieu of notice however, in its written and oral submissions the defendant urged the court to find that the reasonable notice period in the circumstances of this case is one of 18 to 20 months, relying on cases set out in Appendix B – a tacit acknowledgment of the inadequacy of the original offers.

I assume that when a judge refers to a fact in their judgement it is because they find that fact relevant in determining the outcome.

In effect the judge took into account the fact that the Employer had made settlement offers which he found to be grossly inadequate in deciding what the proper notice period would be.

Funny, I always thought that offers were always without prejudice  and thus were not admissible.

Who cares what offers anyone made, other than for the purpose of determining  costs after the decision has been rendered ?

What if the Employer had offered 23 months from the start and the Plaintiff didn’t accept it ? Would the judge still have found that reasonable notice was 24 months? I doubt it .

This consideration of offers as a factor in determining what is reasonable notice is a throwback to the previously discredited concept of ” ballpark justice ” that flourished for a short time in the 1980’s and 90’s. In those cases the Court would determine whether the Employers’ offer was “in the ballpark ” of reasonable notice and if it was, the Court would often award the Employers’ offer. Thus if the ballpark was between 12 and 15 months, and the Employer offered or paid 12 months, then the Court would find that 12 months was reasonable.

Thus  the Court , instead of determining what they thought was reasonable notice , was simply examining if the Employers actions or its offers were reasonable. The Court was in effect abdicating its role to determine the proper notice period  to the Employer rather than doing that job themselves.

The net effect of this was of course that notice periods over time would go down because  to get into the safe zone of ballpark notice, all you had to do was pay or offer the low end of the notice period.

However Courts of Appeal across Canada finally rejected this doctrine and re-emphasized that the Court decides what is reasonable notice, not the parties. ( see Walsh v. UPM-Kymmene Miramichi Inc. ( 2003 NBCA 32) .

In my opinion the only information that the judge should have considered is what the Employer actually did, not what they offered to do. In this case the only relevant information was that the Employer paid the Plaintiff the bare statutory minimums and not a penny more.

If Employers want to get credit for being reasonable, they can simply pay the Plaintiff what they feel is reasonable notice, without a release,  preferably by way of salary continuance so as to not lose the advantage of mitigation.

In this case the Employer at trial  apparently thought that the plaintiff should get at least 18 months notice. Can you imagine the effect on the Court if the Employer had told the Plaintiff in a with prejudice letter that the Employer intended to keep the Plaintiff on full salary and benefits until the earlier of 18 months or when the Plaintiff mitigated her damages by finding another job ?

I strongly suspect the Court would look more kindly upon such an Employer and either consciously or subconsciously moderate the notice period in the Employers’ favour.

In my experience as an employment law mediator I rarely see employers take the     approach set out above. Most employers adopt the same position as the defendant in this case of paying out only the minimum statutory payments and litigating over the balance. Those are the employers who  often get hit with headline grabbing notice periods.