In Currie v Nylene Canada Inc [Currie], the Ontario Superior Court of Justice (“Court”) awarded a wrongfully dismissed employee damages representing 26 months’ pay in lieu of reasonable notice of termination. The Court found that the employee had demonstrated “exceptional circumstances” to warrant an award in excess of the presumptive cap of 24 months of reasonable notice at common law.
The plaintiff, Diane Currie, was a 39-year employee of the defendant, Nylene Canada Inc. (“Nylene”), and its predecessors.
In June 2017, Nylene advised Ms. Currie that in order to access her accumulated pension plan, she was required to retire. Nylene informed Ms. Currie that should she elect to retire, they would offer her employment immediately following her retirement. Later that month, Ms. Currie elected to receive her pension by retiring and accepting Nylene’s new offer of employment on the same terms and conditions. Ms. Currie did not provide Nylene with written notice of resignation or retirement. While the offer stated that it would recognize Ms. Currie’s prior years of service for purposes of determining her eligibility under Nylene’s benefits plan, the offer was silent on whether such service would be recognized for other purposes.
In December 2018, Nylene terminated Ms. Currie’s employment on a without cause basis. Ms. Currie brought an action for wrongful dismissal. As Ms. Currie’s employment agreement did not contain a valid termination clause limiting her termination entitlements, she was entitled to common law reasonable notice of termination, which courts determine based on factors such as the employee’s age, length of service, and character of their employment, as well as the availability of comparable positions within the job market (collectively, the “Bardal factors”).
At the time of termination, Ms. Currie was 58 years old. She was a long-term employee, having worked for Nylene and its predecessors for 39 years. She was most recently employed in a supervisory role.
Based on these factors, Ms. Currie argued that she was entitled to damages representing 26 months of notice. She argued that the Court should make a finding of exceptional circumstances that would justify the award of a notice period in excess of 24 months. Nylene argued that the Court’s calculation of Ms. Currie’s notice period should use her rehire date in June 2017. In the alternative, Nylene argued that Ms. Currie should not be entitled to more than 15 months of notice.
The Court held that Ms. Currie’s retirement and acceptance of the new offer of employment in June 2017 did not constitute a break in her employment and service to Nylene. The Court noted that the offer did not expressly preclude recognition of her years of service for other purposes, including determining her entitlement to reasonable notice upon termination. Moreover, the Court emphasized that if Nylene wished to rely upon the retirement to limit Ms. Currie’s status as a new employee, Nylene was required to have advised Ms. Currie that her prior years of service would not be recognized for all purposes. Having failed to do so, the Court found that it was reasonable for Ms. Currie to assume her employment would continue on the same terms.
The Ontario Court of Appeal recently held in Dawe v Equitable Life Insurance Company of Canada [Dawe] that exceptional circumstances will be required in order to support a notice period that exceeds 24 months (for more information on this decision, please see our previous blog on Dawe here). However, the Court was persuaded that such exceptional circumstances existed in this case based on the following factors:
- Currie dropped out of high school to begin working at Nylene’s predecessor company and had faithfully remained employed at Nylene for 39 years. As stated by the Court, “she has known nothing else”;
- Currie was 58 years old at the time of termination and in her “twilight working years, closing in on the end of her career”;
- Currie worked and developed skills in a very specialized manufacturing field;
- Currie’s experience had been limited to one employer, in one type of environment, and had developed skills that were “very difficult” to transfer or apply to a new employer or industry; and
- Given Ms. Currie’s older age, limited education and skill set, her dismissal was akin to a “forced retirement”. Overall, Ms. Currie was not well equipped to effectively compete in today’s market or secure comparable employment.
Takeaways for Employers
The Court in Currie confirmed that an employer who wishes to rely on a break in the employment relationship to limit an employee’s post-termination entitlements must ensure that the new employment agreement contains contractual language that clearly and unambiguously allows them to do so. Additionally, it is incumbent upon employers to proactively flag and advise the employee of any changes to the employee’s employment status.
At present, it remains to be seen whether the Court’s large award to Ms. Currie will be successfully appealed. Arguably, the factors considered by the Court could have been sufficiently accounted for by the Bardal factors and should not have been found to constitute exceptional circumstances.
It remains unclear whether the Currie case will be considered an outlier decision. In the meantime, employers would be well advised to ensure that their employment agreements are up to date and contain enforceable termination clauses that clearly and effectively specify their employees’ entitlements upon dismissal.
This blog is provided as an information service and summary of workplace legal issues.
This information is not intended as legal advice.