MYTH - THERE IS NO "CAP" ON YOUR DAMAGES FOR WRONGFUL TERMINATION - THEY CAN EXCEED 24 MONTHS' PAY IN LIEU OF NOTICE

HARD LABOUR

[BY WARDS PC LAWYERS]

Despite what you may have heard, damages for wrongful termination in Ontario are not ‘capped’ at the equivalent of two years (24 months) reasonable notice. In other words, in special (although rare) circumstances, a terminated employee can be entitled to more than the equivalent of 24 months’ of compensation if the employee is wrongfully terminated.

The high-water mark for reasonable notice damages in Ontario, to my knowledge, is the equivalent of 30 months’ pay in lieu of notice, which was awarded in a 1999 Ontario case.

Generally, exceeding this so-called “cap” on damages is only done by the Court in “exceptional circumstances”, which are not clearly defined by the law in Ontario.

In a recent case, the Ontario Court of Appeal awarded 26 months’ damages and, in doing so, spoke of “exceptional circumstances” in this way:

“[30] Canac asks this court to set aside the trial judge’s award of damages of 26 months of notice. Canac founds its position on this court’s decision in Lowndes v. Summit Ford Sales Ltd., 2006 CanLII 14 (ON CA), [2006] O.J. No 13 (C.A.). At para. 11 of Lowndes, this court stated that while the reasonable notice period is a case-specific determination and there is no absolute upper limit on what constitutes reasonable notice, generally only exceptional circumstances will support a notice period in excess of 24 months. Canac says that the trial judge erred in principle by failing to make a finding of exceptional circumstances before awarding damages for reasonable notice in excess of 24 months. Consequently, it submits, this court can set aside the award. It urges this court to make an award of between 16 to 18 months but, in any event, not greater than 24 months.

[31] I agree that the trial judge failed to expressly make a finding of exceptional circumstances. I note that as part of the agreed statement of facts, the parties presented an agreed damages calculation that included figures for up to 26 months of notice. This may explain why there is no explicit finding of exceptional circumstances as it clearly indicates that an award beyond 24 months was in the contemplation of all parties. In any event, however, given the Keenans’ ages and lengths of service, and the character of the positions that they held, I would not interfere with the award.

[32] Lawrence Keenan and Marilyn Keenan worked for Canac for approximately 32 and 25 years respectively. Together, their average length of service was 28.5 years. They were 63 and 61 years of age at the time of termination. They held supervisory, responsible positions in which they oversaw the installation of Canac’s products and met with Canac’s customers as its representatives. For over a generation, they were Canac’s public face to the outside world. Over a period of approximately thirty years – the entirety of their working lives – the Keenans’ income had come from Canac and they relied on that income to support themselves and their family. Even during the approximately two years that they provided some services to Cartier, a “substantial majority” of the Keenans’ work continued to be done for Canac. These circumstances justify an award in excess of 24 months and I see nothing wrong in the trial judge’s finding that 26 months’ notice was reasonable.”  

Therefore, if the circumstances are right, an employee who is wrongfully terminated is not subject to the “cap” of 24 months’ pay in lieu of notice. More can be available, but only in fairly rare and exceptional circumstances.

An employee may also be entitled to additional damages, such as for breach of human rights, failure by the employer to perform the employment contract honestly and punitive or aggravated damages, but each case is different and each must be assessed on an individual basis. 

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Jason Ward – WARDS PC LAWYERS

This WARDSPC BLAWG is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

More information? We're here to help - jason@wardlegal.ca  www.wardlegal.ca

 

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This WARDS LAWYERS PC blog is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

More information? We're here to help - jason@wardlegal.ca | www.wardlegal.ca