The Supreme Court of Canada in Keays v. Honda Canada emphasized that the approach for determining the period of reasonable notice laid down in Bardal v. The Globe and Mail was appropriate and to be favoured. Bardal establishes that the appropriate notice period, in any given case, is to be determined by considering factors including, but not limited to, the character of the employment, length of service, the age of the employee and the availability of other employment.
As noted in Bardal, and repeated in countless cases, including Keays, "there can be no catalogue laid down as to what is reasonable notice in particular classes of cases." and, further, "no one Bardal factor should be given disproportionate weight."
With that background comes the recent Ontario Court of Appeal decision in Love v. Acuity Investment Management Inc. et al. In this case, one of only two senior vice-presidents was dismissed from his employment after 2.53 years of service. At the time of his termination he was 50 years of age and earned he received a total compensation package that included salary, commissions, profit distribution and the value of shares which were worth an average of $633,548 per year of employment.
For purposes of this post, the trial judge awarded Mr. Love damages equivalent to 5 months’ pay in lieu of notice. Mr. Love challenged this assessment.
The Court of Appeal held that, while a trial judge's determination of the reasonable notice period is to be afforded defference, such is not the case where the trial judge "erred in principle". Though the Court of Appeal will only sparingly substitute their assessment of the period of reasonable notice for that of the trial judge, they will certainly do so in an appropriate case and this was such a case.
The Court held that the trial judge erred in principle for the following reasons.
.... it overemphasizes the appellant’s short length of service. While short service is undoubtedly a factor tending to reduce the appropriate length of notice, reference to case law in a search for length of service comparables must be done with great care. The risk is that while lengths of service can readily be compared with mathematical precision that is not so easily done with other relevant factors that go into the determination of notice in each case. Dissimilar cases may be treated as requiring similar notice periods just because the lengths of the service are similar. The risk is that length of service will take on a disproportionate weight.
The second error is the under-emphasis on the character of the appellant’s employment. To describe it as a senior vice president holding a senior level sales position but not supervising others ignores a number of relevant aspects of the appellant’s employment. He was one of only two senior vice presidents. He reported directly to the chief executive officer. He was responsible for an important part of the respondent’s operation, namely the investments of its institutional clients. He received significant average annual compensation and was one of nine owners of the company. He was clearly a high level employee, something that this court has said favours a longer notice period.
The trial judge gives no consideration at all to one of the Bardal factors, the availability of similar employment. Both his substantial average annual compensation and the possibility of equity participation in his employer were important aspects of the appellant’s employment. Both are relevant in assessing similar employment opportunities.
Based on these considerations, the Court of Appeal set aside the trial judge's award of 5 months, and increased this to 9 months.
This case is important for a number of reasons. First, an appelate court will intevene and substiture its assessment of the appropriate period of reasonable notice for that of a trial judge where such intervention is warranted because the trial judge erred in principle. Second. no single Bardal factor should be given undue weight in the balancing process. Finally, character of employment, and level remain important factors in the overal assessment of the period of reasonable notice. Finally, as has been repeated over and over by the courts, deciding on the notional period of reasonable notice is not only an individualized assessment, but is more art than science, yielding a range of reasonableness rather than a fixed number.