Common employment law mistakes made by employers: #2 – Relying on length of service when providing reasonable notice.

In the second installment of the ten most common employment law mistakes made by business owners and HR managers Nick Milanovichand I look at the factors that are considered when determining reasonable notice.  In our experience, employers and HR managers often put too much weight on an employee’s length of service when determining reasonable notice and do not give other factors appropriate consideration.

Length of service is but one of the factors a court will consider when determining reasonable notice. Other factors include age, character of employment and availability of similar employment.  There is trend towards not placing a disproportionate amount of weight on any one of the four factors that a court typically considers when determining reasonable notice: Honda Canada Inc. v. Keays, [2008] 2 S.C.R. 362.

More recently, in Love v. Acuity Investment Management Inc., 2011 ONCA 130, the Ontario Court of Appeal extended, from 5 to 9 months, the notice period awarded to a fifty year old employee with 2.5 years of service as a chartered accountant and senior vice-president.  The Court of Appeal held that the trial judge had erred by, among other things, placing a disproportionate amount of weight to the employee’s length of service.

Many employers do not take into account that determining reasonable notice in short service cases can be unpredictable.  For starters, employees with short service will often need a minimum period of 2-3 months to find work.  However, notice periods can go up from there, sometimes significantly.

J.P. Zubec