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Is There a Standard Formula for Common Law Notice

Whitten and Lublin | Aug 21, 2018

Employment law entitlements are bare minimum guarantees. If not subject to a termination clause which limits termination pay to statutory entitlements, then employees are owed common law notice. Common law notice uses the Bardal factors (length of service, age, position, labour market conditions, and more) to estimate the time needed to find comparable employment. The employee would then be owed damages equal to earnings over the notice period.

Unlike minimal entitlements, there is no standardized measure for common law notice (ie. 1 month per year for a long-serving employee). This makes it difficult to calculate without fully considering the facts of each case. A case that demonstrates this is Rodgers v. CEVA Logistics (2014 ONSC). In this case, Rodgers was President of Sameday Worldwide, a freight forwarding company, earning an annual base salary of $189 000, and a bonus of $126 000 in 2009, before he accepted an offer from CEVA Logistics. In short, it took CEVA an offer of $267 000 in annual salary and a $40 000 signing bonus to convince Rodgers to leave Worldwide and serve as a County Manager with CEVA. After 3 years, CEVA ended Rodgers’ employment and argued that the most significant factor in determining Rodgers’ notice payment was his very short tenure with the company.

The court here disagreed. In addition to considering Rodgers’ age (55), the limited comparable positions in Canada, his great responsibilities at CEVA, and so forth, the court also considered one more key factor. Upon Rodgers’ commencement of employment, he was required to purchase 37.5% of his salary’s worth of CEVA’s shares. The court determined that due to this fact, the parties both expected this to be a long-term employment relationship before entering the employment agreement. Coupled with the fact that Rodgers left a long-term and secure job, the court awarded Rodgers 14 months in notice pay.

Overall, as an employee in a key senior position, it is always best to seek the advice of an employment lawyer if your employment is terminated. Given the complexity of common law notice estimates, retaining the assistance of an employment lawyer will assure you are granted your full entitlement.

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