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Toronto Employment Lawyer

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Short-Service Employee Entitled to Long Notice Period – Severance Packages

October 2, 2022 By Articles

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.

The employee was recruited by the employer with promises that “the new position carried opportunity for greater responsibility, authority, and growth within the organization.” As a result, he left comparatively secure employment with an established large multi-national corporation.

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.

Disclaimer: The content on this website and blog is not legal advice or legal opinion of any kind, and is only to provide general information. It is in no way particular to your individual case and should not be relied upon in any way. The outcome of a legal matter depends on its unique circumstances, and prior successes are not indicative of future results. No portion or use of this website or blog will establish a lawyer-client relationship with the author, this law firm or any related party. Should you require legal advice for your particular situation, please fill out the form below, or call 647-822-5492, to request an initial consultation.

Employment Lawyer in Toronto | Wrongful Dismissal Lawyer | Employment Law Firm in Toronto | Employment Lawyer in Ontario | Severance Package Lawyer

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“Bune Law, Toronto Employment Lawyer, is your source of expert employment legal advice and representation for employees and employers on all work-related issues. We assist clients all across Ontario on termination of employment, severance packages, wrongful dismissal, human rights, employment contracts, constructive dismissals, and more. Bune Law serves clients in various cities across Ontario, including Toronto, North York, Thornhill, Vaughan, Woodbridge, Richmond Hill, Mississauga, Brampton, Pickering, Hamilton, Ajax, Oshawa, Whitby, Uxbridge, Aurora, Markham, Newmarket, etc.”

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  • Home
  • Bio
    • Sezar Bune, Toronto Employment Lawyer
    • Why Hire Bune Law?
    • Legal Fees
    • Location
    • Employment Lawyer in Ontario – Areas Served
      • Employment Lawyer Vaughan
      • Employment Lawyer Mississauga
      • Employment Lawyer Toronto
      • Employment Lawyer Consultation Process
      • Terms of Use and Disclaimer
      • Back
    • Back
  • Employees
    • Wrongful Dismissal and Termination
    • Severance Packages
    • Employment Contracts
    • Constructive Dismissal
    • Workplace Harassment
    • Independent Contractor vs Employee
    • Human Rights
      • For Employees
      • For Employers
      • Resources
      • Back
    • Workplace Retaliation
    • Back
  • Employers
    • Employment Termination
    • Wrongful Dismissal Defence
    • Employment Contract Prepare/Review
    • Independent Contractor vs Employee
    • Employment Standards
    • Workplace Policies
    • Provincial Offences
    • Back
  • Blog
  • Contact