BC Supreme Court Ruling: Short-term Employees Receive Larger Notice PeriodNov 8 2018
The BC Supreme Court has reaffirmed that for employees with less than three years service, the entitlement of reasonable notice will be proportionately higher than for long-term employees.
Richard Chapple started working for Big Bay Landing Ltd. as a Remote Resort Manager for their resort on Stuart Island, BC, in February 2013. His salary was $84,000 per year plus benefits and a housing allowance. He was terminated on April 20, 2015 at age 61, after 26 months of employment. The Company said Mr. Chapple was entitled to three weeks’ pay in lieu of notice at the time his employment was terminated.
The purpose of reasonable notice is to provide an employee with a fair opportunity to obtain similar or comparable re-employment. This may be done with advance written notice or pay in lieu of notice. It depends on many factors, including age, length of service, level of responsibility and availability of similar employment given the employee’s experience, training and qualifications. It is assessed on a case-by-case basis.
We often hear from people who have heard that reasonable notice is one (1) month per year of employment. In reality, the determination of reasonable notice is much more subtle than that, taking into consideration all the factors outlined above. In Mr. Chapple’s case if the one (1) month rule had been applied, he would have only been entitled to approximately two (2) months of wages.
Increasing the notice period
Another possible factor to increase the notice period that was argued by Mr. Chapple is that he was induced to join the Company. Inducement may occur if specific representations were made as part of persuading an employee to leave existing long-term, secure employment. In this case, the court found that Mr. Chapple was not headhunted and so there was no inducement. He left a job where he had earned more because he was not satisfied about his long-term prospects and was open to other opportunities.
Mr. Chapple also sought damages related to the foreclosure of his property in Campbell River as being a result of the termination. He had purchased the property in January 2014 with the owner of the company assisting him with the financing. The court found that there was no proof the purchase was part of Mr. Chapple’s initial hiring and the owner of the company’s assistance was gratuitous rather than forming part of the offer of employment.
While Mr. Chapple was not successful, there can be situations where an employee’s damages for termination go beyond pay in lieu of notice. This can include costs associated with lost benefits or loss of a vehicle allowance. It also may include housing costs if contemplated as part of the offer of employment.
The court found there was no just cause for Mr. Chapple’s termination and, therefore, was entitled to either a) reasonable notice that his job was ending or b) severance in lieu of that notice. Since Mr. Chapple did not have a written employment contract limiting his entitlement to notice, the court would consider what is “reasonable notice” based on previous cases of similar facts (often referred to as “case law”).
Considering his relatively mature age of 61, that Mr. Chapple was in senior management of a small operation, opportunities for his line of work in BC were limited and that he found alternative work in less than one year after the dismissal, the Court found that nine (9) months constituted reasonable notice with some recognition of his short service.
Employees: before accepting a termination package, it is important to get legal advice about what you are entitled to. We can help.
Employers: if you are considering terminating an employee, it is important to know what your obligations are and how to limit liability. We can help.