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Wrongful Dismissal Notice Periods – Superior Courts do not set Precedents

In the recent decision, Kotecha v. Affinia Canada ULC, the Ontario Court of Appeal provided a useful reminder that trial level decisions are not binding. The original decision came by way of a motion for summary judgment and awarded a terminated employee 22 months of pay in lieu of notice in addition to the 11 weeks of working notice provided. The defendant appealed to the Ontario Court of Appeal stating the motion’s judge failed to apply the principle of stare decisis and follow the decision by Justice Taylor in Sharma v. Affinia Canada (unreported). Under an allegedly very similar fact scenario, Taylor J. awarded an employee 13 months’ pay in lieu of notice.

The Ontario Court of Appeal rejected the stare decisis argument. As stated in a previous appellate decision, the principle of stare decisis is to ensure court decisions are consistent with higher court decisions. Therefore, Superior Court judges and other trial level courts are bound to apply the decisions of the Ontario Court of Appeal and Supreme Court. However the Superior Court judges, while they may be persuaded by similarly seated judges, are not bound to follow each other. Furthermore, wrongful dismissal notice periods require a fact-specific analysis. In this instance the plaintiff was 8 years older with 4 additional years of service compared to the plaintiff in the Sharma case.

Ultimately the Court of Appeal did allow the appeal and reduced the notice period from 22 months to 18 based on an application of the often cited Bardal factors. The employee (“Kotecha”) was employed for 20 years as a machine operator and was 70 years old at the time of the summary judgment. Kotecha was not granted a single interview through his job search and the motions judge took note of his advanced age and the poor economy with respect to his lack of success. Based on these factors the initial award was found to be excessive and the factual matrix lacked any exceptional circumstances to justify the award. Interestingly, the Court of Appeal did note that courts should strive for consistency when determining the appropriate notice period. However, the consistency is in relation to case law as a whole rather than blindly following any one particular case.

Determining the appropriate notice period for an employee is a fact-specific and difficult exercise. If you are an employer faced with the tough decision to terminate an employee, you should seek legal advice. The lawyers at CC Partners have a wealth of experience with respect to an employer’s obligations when terminating an employment relationship. We can assist you in determining the appropriate notice period as part of an employment agreement or termination letter.