We previously wrote about a recent case called Pavlov v. The New Zealand and Australian Lamb Company Limited, where an Ontario court awarded a relatively short-service employee significant damages for wrongful dismissal following his unlawful termination of employment. This was an important development in the area of court awards for reasonable notice periods, since the court’s decision effectively entitled the employee to an arguably far greater severance package than one would ordinarily expect (especially if the employee had signed an employment contract limiting their entitlement to severance pay).
What Happened in Pavlov v. The New Zealand and Australian Lamb Company Limited?
In this case, the employee worked for the company as its Director of Marketing Communications and Public Relations. On May 28, 2022, amidst the COVID-19 pandemic, the company terminated his employment without cause. At that time of his wrongful dismissal, he was 47 years old and had been employed for just under 3 years. He was earning $131,943 per year, and participating in its group benefits plan.
As part of his compensation, he was also eligible to receive an annual bonus of up to 15% of his base salary (depending on company and individual performance), including a pro-rated amount in his first year. He received a variable bonus in each year of his employment prior to termination.
Following his wrongful termination, the employee applied for over 100 jobs and retained private career coaching services to assist him in his job search. Despite his efforts, he remained unemployed at the time of trial.
At trial, the employee as successful in his wrongful dismissal claim, with the court awarding him damages compensating him for a full 10 months’ pay in lieu of reasonable notice under common law, including amounts representing his annual bonus and health benefits that he would have earned during his reasonable notice period. In addition, the court found that while the employee was entitled to the bonus pay he would have received during his reasonable notice period in the following fiscal year on a proportional basis, he was not entitled to bonus pay for time he worked until his termination because only higher-level senior employees received such bonus pay. Lastly, the court found the employee’s mitigation efforts to secure similar alternate employment were “considerable” and “extensive,” and refused to reduce his wrongful dismissal damages on this account.
Court Appeal
Despite the employer’s efforts to overturn the trial court’s decision, the Ontario Court of Appeal quickly dismissed the employer’s arguments that: (i) the reasonable notice period awarded was too much; and (b) the employee was not entitled to a bonus payment. Specifically, the court held that the severance package the employee was awarded was reasonable based on the “well-accepted factors” established in the landmark case called Bardal: the employee’s age, character of employment (position, compensation, duties responsibilities), and the availability of similar employment with reference to the prevailing economic uncertainties which had a negative impact on his ability to secure similar alternative employment
Conclusion and Take-Home Lessons
The court’s decision in Pavlov is important as it was one of a series of decisions that substantiated employment lawyers’ efforts to obtain a “COVID bump” in cases involving claims for wrongful dismissal and severance packages. Similarly, outside of the current economic environment, it also continues wrongful dismissal trend in Ontario court cases heard following the advent of the COVID-19 pandemic, that even short-term employees terminated from senior-level positions deserve longer reasonable notice period. For employers, what this case demonstrates timing of a termination and economic uncertainty is crucial, particularly in this case where there were on-again, off-again lockdowns relating to the global pandemic.
Contact Employment Lawyer Today
If you are an employee who was recently terminated from your employment and want to know if you have a valid claim for financial severance package, or an employer who needs assistance or advice in responding to a wrongful dismissal claim by one of your employees, our experienced employment lawyer at Bune Law can help. Contact us by phone 647-822-5492 or fill out the contact form to the side. We would be happy to assist in your employment law matter as quickly as possible.
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