Impact of COVID-19 on Reasonable Notice Entitlements

**Written by Adele Zhang, Summer Student at Lee Workplace Law

COVID-19 has had a profound impact on employment in Canada. Over the past 16 months, unemployment has increased by 113.3%. This marks a historically unprecedented drop in national employment. Given the drastic downturn in the job market and resulting difficulty in securing employment, many have been wondering how the COVID-19 pandemic will impact employees’ entitlement to reasonable notice of termination.


What is Reasonable Notice?

Reasonable notice is a common law principle that requires employers to give employees notice of termination so that they can seek alternative employment. To calculate the reasonable notice period, the courts will consider 4 factors: (1) the employee’s age, (2) the length of service, (3) the character of the employment, and (4) the availability of similar employment. Courts engage in a case-by-case assessment of these factors to determine reasonable notice periods.


Recent Case Law

Recently, a number of decisions have been released that have shed light on how the COVID-19 pandemic, and resulting slim job prospects, impact the assessment of reasonable notice.

In determining reasonable notice, the court evaluates the circumstances existing at the time of the termination. This means that the COVID-19 pandemic must have existed at the time of termination to be deemed a relevant factor affecting the availability of comparable employment. However, the availability of comparable employment is only one factor considered when determining reasonable notice entitlements. Recent case law grapples with how to balance COVID-19 with the other factors in the assessment of reasonable notice.

For example, in Yee v Hudson’s Bay Company, 2021 ONSC 387, the court stated that termination after the start of COVID-19 should attract special consideration because the pandemic would affect an employee’s ability to find comparable employment. However, Yee’s termination occurred before COVID-19 began, so the courts did not further explore the relationship between COVID-19 and the length of notice periods.

In Lamontagne v. J.L. Richards & Associates Limited, 2021 ONSC 2133, the employee was terminated on February 19, 2020, one month before COVID-19 cases were first reported in Ottawa. By mid-February of 2020, Canada had already acknowledged the possibility of a global pandemic. Therefore, the court determined that the threat of a pandemic and its impact on the economy was sufficient to consider COVID-19 in determining reasonable notice periods.

Together, these decisions suggested that the courts were leaning towards awarding longer notice periods where termination occurred during COVID-19. However, the most recent decision from the Ontario Superior Court of Justice suggests that isn’t necessarily the case.

In Iriotakis v. Peninsula Employment Services Ltd., 2021 ONSC 998, the court refused to award a longer notice period despite the fact that the termination had occurred on March 25, 2020, after the pandemic started. In its decision, the court stated that the impact of the pandemic on the job market was still speculative and uncertain both in the degree and duration of its effects. The court went even further to assert that reasonable notice is not a “guaranteed bridge to alternative employment.” This decision suggests that the courts are hesitant to give significant weight to COVID-19 in their assessment of reasonable notice because the extent of the impact on the job market is still unclear.


Conclusion

The length of reasonable notice periods has remained fairly consistent between pre-COVID-19 and during COVID-19 cases. This is likely because the pandemic is only considered where it affects the employee’s ability to find alternative work. Despite recognizing that the pandemic has had an impact on the job market, recent court decisions suggest that the fact the termination occurred during COVID-19 may not significantly increase an employee's entitlement to reasonable notice. Rather, the potentially reduced availability of similar employment is one factor of many that will be considered in determining an employee's entitlements.

As decisions are just beginning to be released on this issue, there still remains uncertainty on how much COVID-19 will affect notice period assessments. Although courts have stated that they will consider the pandemic as a factor in determining reasonable notice periods, there have been no significant changes in the length of notice periods awarded. Thus far, the decisions released have only dealt with termination cases from earlier stages of the pandemic. It remains to be seen how terminations further into the pandemic will be treated if the impact COVID-19 on the job market becomes clearer over time.