At a practical level, what does the Supreme Court of Canada's decision in Keays v. Honda Canada mean? Well, it's early days, but I will write a few posts on this and consider the following areas that come out of the case and my own thinking on the issues:
- What factors can/should properly be considered in determining the period of reasonable notice of termination?
- Will the Court establish an cause of action for breach of human rights legislation that can be pursued civilly?
- Can a breach of human rights legislation found an independent actionable wrong for purposes of a claim for punitive damages?
- What will the Court do with the 9 month Wallace award?
For the background to the case read this article.
Factors Properly Considered in Determining Reasonable Notice
Courts have considered a growing variety of factors when determining the appropriate period of reasonable notice of termination in any given case. They have been quick to point out that this determination is “more art than science” and have resisted any formula based approach when deciding on the notional period of reasonable notice such as the ever-popular “month per year of service” rule of thumb (see, for example, Minnott and this earlier post).
Traditionally, and recognizing that there is no closed set of factors, the Court has relied upon the seminal case of Bardal v. Globe and Mail and the four factors listed in that case:
- the character of the employment,
- the length of service of the servant,
- the age of the servant and
- the availability of similar employment, having regard to the experience, training and qualifications of the servant.
The trial judge in Keays considered these factors in determining that the period of reasonable notice was 15 months. In arriving at this number, the trial judge also considered “Honda’s “flat” (i.e., egalitarian) management structure as limiting the effect of Keays’ lower position in Honda’s hierarchy; the fact that Keays had specialized training to compensate for his lack of formal education; his long service; and the lack of comparable employment in Alliston.”
Mr. Justice Bastarache, on behalf of the majority of the Supreme Court, was critical of the trial judge’s consideration of these “other factors” as they gave little insight into what Mr. Keays actually did. As Mr. Justice Bastarache said:
It will therefore suffice to say here that Honda’s management structure has no part to play in determining reasonable notice in this case. The “flat management structure” said nothing of Keays’ employment. It does not describe the responsibilities and skills of that worker, nor the character of the lost employment. The particular circumstances of the individual should be the concern of the courts in determining the appropriate period of reasonable notice. Traditional presumptions about the role that managerial level plays in reasonable notice can always be rebutted by evidence. [emphasis added]
The Court also held that no one Bardal factor should be given "disproportionate weight" over the others and, in the circumstances of the Keays case, the Court held that the "In the present case, the trial judge erred in applying one of the factors, alluding to the flat management structure, rather than examining the actual functions of Keays."
In reaching this conclusion, the Court nonetheless refused to reduce the 15 month period of reasonable notice. In doing so, and despite the comment that no single Bardal factor should be given "disporportionate weight" the Supreme Court of Canada went on to consider the following:
- Keays was one of the first employees hired at Honda’s plant
- Keays spent his entire adult working life with Honda
- Keays did not have any formal education and
- Keays suffered from an illness which greatly incapacitated him.
The Court found that "all these factors will substantially reduce his chances of re‑employment" and justify an assessment of 15 months’ notice.
This aspect of the Supreme Court's decision provides an endorsement for the historical approach to notice determination where the emphasis is on the circumstances of the individual employee, rather than on other factors that are not necessarily indicative of the specific circumstances of the individual. It emphasizes that Bardal continues to be the most appropriate approach and that no single factor is more important than the others.
It is often frustrating for clients (and, therefore, their lawyers) that this process is really "art" and not "science". But I have always believed that a formulaic approach to determining the notice period is problematic and overly restrictive because it locks us into a mechanical application and does not allow for the factoring in of unique and individual circumstances.
The Court, in Keays, has clearly agreed with and favoured the traditional and individualistic approach to notice determination which, frankly, was not surprising.