Wednesday, June 29, 2011

How much notice of termination should an unskilled labourer receive?

There is a recent case out of the Ontario Court of Appeal, Di Tomaso v. Crown Metal Packaging Canada LP, 2011 ONCA 469 (CanLII) that appears to be a positive step forward for unskilled employees seeking recourse for wrongful dismissal.

Reasonable notice periods, at common law, are determined by looking at various factors. The standard four are length of service, age of the employee, character of employment, and availability of replacement employment. The result can be anywhere from a negligible period to two years, or even higher in exceptional cases. The Courts have been quite firm that no single factor is dominant.

The "character of employment" factor is not uncontroversial. Essentially, it has the effect that high-level (i.e. highly paid) employees are entitled to continue their significant remuneration over a relatively lengthy period of time, whereas a front-line worker receiving minimum wage gets that modest wage continued over a relatively short period of time. The policy rationale seems to be that it is easier for a front-line employee to find replacement employment.

In addition, for the last sixteen years, unskilled and clerical employees have had to contend with the Cronk decision from the Court of Appeal. Ms. Cronk was a clerical worker in a single job for over 30 years, and was 55 at the time of her termination. She sued for wrongful dismissal, and the motions judge, Justice MacPherson (as he then was), took it upon himself - without seeking submissions from the parties' lawyers - to question the importance of "character of employment".

Third, the reality is -- as we are all told by our parents at a young age -- that education and training are directly related to employment. The senior manager and the professional person are better, not worse, positioned to obtain employment, both initially and after in a post-dismissal context. Higher education and specialized training correlate directly with increased access to employment.

Justice MacPherson cited reputable articles in support of this conclusion, and accordingly refused to recognize the clerical/management distinction, awarding 20 months pay in lieu of notice. And naturally, the employer appealed.

While one of the judges on the Court of Appeal argued that there should be a trial of the issue (to determine whether or not Justice MacPherson's factual assertions were legitimate), the majority of the Court of Appeal essentially said that Justice MacPherson was wrong to question the appropriateness of the "character of employment" factor, reducing the award to 12 months. But they went further characterizing this award as "the maximum notice in her category".

Justice MacPherson's analysis wasn't put finally to rest however, and has since been endorsed in other Provinces, such as the 1999 Medis Health and Pharmaceutical Services Inc. v. Bramble decision in New Brunswick:

The proposition that junior employees have an easier time finding suitable alternate employment is no longer, if it ever was, a matter of common knowledge. Indeed, it is an empirically challenged proposition that cannot be confirmed by resort to sources of indisputable accuracy.

The jurisprudence has long recognized that the hard ceiling that Cronk appeared to create for clerical workers can't actually be a hard ceiling; that would be incongruous with the flexibility of the notice doctrine. Yet when a 55-year-old employee with over 30 years of service is entitled to only 12 months, it becomes difficult to imagine a clerical employee receiving much more than that. More to the point, what would the entitlements be of a 40-year-old employee with 'only' ten years of service? Cronk created a severely depressed sliding scale for notice periods of clerical employees, which easily puts most or all clerical employees in a position where the amount they are seeking to recover is less than the probable legal fees associated with a trial, and now in fact is likely to put most clerical workers' claims into the monetary jurisdiction of the Small Claims Court.

Mr. Di Tomaso was terminated at age 62 after 33 years of work as a two-piece mechanic and press maintainer. The motions judge awarded him the equivalent of 22 months' notice, which the employer challenged as being contrary to the Court's decision in Cronk, arguing that the 12-month cap should be applied.

The Court of Appeal dismissed the employer's appeal, stating that the character of employment is of "declining relative importance". "The empirical validity of that proposition [that low level unskilled employees deserve less notice because they have an easier time finding alternative employment] cannot simply be taken for granted, particularly in today's world."

Interestingly, the Court of Appeal's decision was authored by MacPherson J.A.


This blog is not intended to, and does not, provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.