In Dawe v Equitable Life Insurance Company ( 2019 )NCA 512) the Ontario Court of Appeal struck down a 30 month notice period and reduced it to 24 months .
The Plaintiff hit all the Bardal Factors. He was a senior Vice President. He had 37 years of service. He was 62.
The Court of Appeal reiterated that although there no absolute upper limit or cap, reasonable notice in excess of 24 months is only justified in “exceptional circumstances “.
The Court of Appeal was critical of some of of the factors that the trial judge referred to :
- Rather than focus on any ” exceptional circumstances” the judge commented that now that we no longer have age 65 mandatory retirement, ” presumptive standards should no longer apply. The OCA noted that mandatory retirement was abolished in Ontario in 2006 so this is by no means a recent event. In any event the Plaintiff testified that he actually planned to retire at age 65.
- The trial judge said that the termination was a ” forced retirement” when in fact the Plaintiff requested an exit package as a result of a conflict he was having with some fellow executives.
In essence what the Court was saying is that “exceptional circumstances” cannot simply be the same Bardal Factors that you use to figure out the normal notice period.
What are exceptional circumstances that will warrant a notice period of more than 24 months ?
Stay tuned as new cases and creative lawyers will undoubtably come up with new arguments as to what are or are not ” exceptional circumstances “.
Although plaintiff lawyers may well disagree, I believe that this is a good legal development as it brings a modicum of certainty to a very uncertain world.
By the way, this was the same trial judge who commented in his award that he personally would have awarded 36 months notice but as the plaintiff only asked for 30 months, he was awarding only 30 months. Perhaps the Court of Appeal was using this decision to bring to an abrupt halt this idea of ever expanding notice periods.