When the pandemic first began almost a year ago (as strange as it may be to believe), it was unclear whether the pandemic’s impact on the economy would extend an employee’s reasonable notice period after they were terminated.
The Courts first addressed this question in the recent decision of Yee v. Hudson’s Bay Company. In that case, the employee was terminated in November 2019. The Court held that since the employee was terminated prior to the start of the pandemic, the effects of the pandemic on the economy and job market at the time of termination had not been contemplated. Therefore, the Court declined to extend the employee’s reasonable notice period due to COVID-19. However, the Court did differentiate between terminations that occurred before the pandemic and those that occurred after the pandemic, stating that those that occurred after the pandemic should not attract the same consideration.
Further insight into this question was provided by the Court in the recent decision of Iriotakis v. Peninsula Employment Services Limited. In that case, the employee was terminated a week after the Provincial Government announced a State of Emergency on March 16, 2020. Accordingly, the termination occurred after the pandemic had already began. However, the Court declined to extend the notice period in this case given that there was no foreseeability at the time of the termination of the negative impact on the economy and job market.
Further, the Court in that case declined to deduct the Canada Emergency Response Benefit (CERB) payments from the employee’s reasonable notice period given that there was no contribution to CERB from the Employer or the Employee, as is the case with Employment Insurance, and given the CERB payments were less than the Employee’s earnings from commissions and base salary. However, the Court did not eliminate the potential of deducting CERB from the employee’s wrongful dismissal damages.
Accordingly, the Courts have left open the possibility of extending the notice period where an employee is terminated during the pandemic when the negative impacts on the economy and job market are foreseeable at the time of termination. Moreover, there is a possibility that CERB can be deducted from the employee’s wrongful dismissal damages if the employee’s earnings are similar to their CERB payments.
Of course, a valid and enforceable termination clause in the Employment Agreement can limit a terminated employee’s entitlement to merely those under the Employment Standards Act, 2000.
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Please note that this article is for informational purposes only and does not constitute legal advice.
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