fbpx

Employee Entitled to 24 Months’ Notice After Pandemic-Related Termination

Written by on September 15, 2025 in Covid-19 Centre, Employment Law Blog, Focus on Canadian Cases
indefinite layoff

 

The Nova Scotia Supreme Court’s decision in Oakley v. Bounty Print Limited offers a clear reminder of how courts approach reasonable notice, mitigation, and employer conduct when layoffs occur in turbulent markets.

Although the facts arose during the COVID-19 downturn, the principles apply well beyond the pandemic and across provinces. 

A termination requiring real notice

Mr. Oakley spent 41 years with a Halifax-area printing company before his employment ended in 2020 amidst a sharp decline in business. The employer initially tried to place several employees, including Mr. Oakley, on an “indefinite layoff.” After obtaining legal advice, the company acknowledged that, under Nova Scotia law, an indefinite layoff is a termination without cause and issued eight weeks’ notice. The Court held that was insufficient. Given Mr. Oakley’s extraordinary length of service and the prevailing labour market, he was entitled to 24 months’ pay in lieu of notice. While 24 months sits at the high end of the common-law range, the Court declined to exceed that cap because “exceptional circumstances” were not made out on the facts. 

Mitigation still matters: even for long-service, older workers

After termination, Mr. Oakley declined a job that paid about 81% of his former salary. A few weeks later, he also refused an offer to return to his old role at Bounty. He argued that, as an older worker with long service, his duty to mitigate should be relaxed, citing Potter. The Court distinguished Potter: there, no concrete offers were on the table. Here, two comparable opportunities were. Although it may have been reasonable for Mr. Oakley to refuse the competitor’s offer if he anticipated a return to Bounty, his refusal to accept Bounty’s own recall showed a lack of interest in mitigation. Damages were reduced from the date of the first reasonable offer. 

Pension administration missteps can create exposure

Confusion over “layoff” versus “termination” delayed Mr. Oakley’s access to his pension because the company failed to issue a required Statement of Termination. He had to seek an order from the Deputy Superintendent of Pensions. The Court awarded him his legal costs for obtaining that order as consequential damages. A separate claim for market-loss on the pension failed on the evidence, but the case underscores a practical point: when employment ends, employers must issue accurate, timely documentation or risk additional liability. 

Bad faith and punitive damages were not warranted

Mr. Oakley alleged bad faith, pointing to the employer’s continued use of “layoff” language after receiving legal advice. The Court accepted that the terminology was legally inaccurate, but viewed it as internal confusion in an unstable period, not a deliberate attempt to harm. No aggravated or punitive damages were awarded. 

What this means for employers

The label you use, layoff versus termination, has legal consequences that vary by province. In Nova Scotia, an “indefinite layoff” is effectively a termination; in Ontario and some other jurisdictions, temporary layoffs may be permitted by statute but are still risky if the contract does not clearly allow them. Before communicating workforce changes, confirm which framework applies, what your contracts say, and what statutory documents must be issued. If you later offer comparable re-employment or a suitable role emerges, put that offer in writing, be specific about duties, pay, and start date, and keep records; a reasonable offer that is declined can limit your notice exposure. Finally, ensure HR and payroll deliver the right separation paperwork, including pension and benefits notices, so you do not create avoidable, downstream claims. 

What this means for employees

Reasonable notice is fact-specific and can be substantial for long-service employees, even during economic downturns. But the duty to mitigate is real. If a comparable job is available, including a genuine offer to return to your former employer, turning it down can reduce your damages. Document your job search, evaluate offers with counsel, and clarify any gaps in comparability (duties, seniority, compensation, location, stability) before refusing. 

Practical guidance before you act

Whether you are planning a restructuring or assessing your entitlements after termination, early legal advice can prevent costly mistakes. For tailored guidance on notice, mitigation strategy, and pension/benefits administration, contact Minken Employment Lawyers (Est. 1990) at 905-477-7011 or visit minkenemploymentlawyers.com. Your workplace is our business. 

Sign up for our Newsletter to learn about new Employment Law legislation and Court decisions impacting your workplace.

Copyrighted. Not to be copied or reproduced without express permission of Minken Employment Lawyers (Est. 1990) ©

Please note that this article is for informational purposes only and does not constitute legal advice or opinion.

Related Topics

 

Comments are closed.