Determining Notice Periods: Length of Service is Only ONE Consideration

Published May 8, 2011

We are often asked to help sport organizations determine appropriate notice periods where employees are being released without cause. This can be a tricky task. While there are a number of factors that should be considered, most are very difficult to quantify. The result has been that length of service often became the prime, if not sole, basis upon which organizations based the length of notice (and the calculation of pay-in-lieu of notice). In doing so, employers often refer to a "rule of thumb" - one month for every year of service. The fact is, this "rule of thumb" was debunked by the courts some 50 years ago!

In Bardal v. The Globe and Mail Ltd., (that case fifty-one years ago), the Court stated that there was "no catalogue laid down as to what is reasonable notice" (at para. 21 ) and that what constitutes reasonable notice must be decided by considering the facts of each particular case, including the character of the employment, the length of service of the employee, the age of the employee and the availability of similar employment in light of the employee's experience, training and qualifications, among other factors. In other words, it is not simply a matter of length of service, no matter how much more straightforward, objective and easy such an analysis might be.

Since Bardal, there has been a tendency to slip back into 'length of service' as the sole basis on which to determine the appropriate notice period. It is easy and quantifiable, but it also often represents a lesser time period than would be the case had other factors been taken into account. A recent case from the Ontario Court of Appeal (Love v. Acuity Investment Management Inc. (February 2011)) reminds us this is not the proper test to be used. In this case, the Court of Appeal said the trial judge put too much emphasis on the employee's length of service, which at 2.5 years, was fairly short. In this case, other factors were deemed to be of equal, if not greater importance in determining the appropriate time for notice. The Court looked to the nature of the employment responsibilities, the availability of similar employment with a similar level of remuneration, and the age of the employee. The Court took all of these considerations together in ordering a longer period of notice than had been provided originally based solely on length of service.

What does this mean for employers? It certainly means greater uncertainty in trying to figure out the proper notice period (the reason for the trend towards regressing back to considering only length of service, as the Court of Appeal stated, is that an employee's length of service lends itself to easy comparisons and even a level of "mathematical precision"). While how each factor may operate to extend or shorten the notice period may be obvious, how this is to be quantified into a dollar figure (in the case of pay-in-lieu of notice) or even the actual length of notice, will be difficult and certainly is not an exact science. Much more subjectivity will be injected into the process, making choices for organizations more difficult and less reliable.

Sport organizations will need to take a broader perspective in determining notice periods and be aware of what trends are evolving throughout the industry. The Sport Law & Strategy Group can help identify those trends and help you in your employment-related decision-making. We can also assist you in writing employment contracts that contain clearer and more certain provisions for employee termination and for calculating notice and pay-in-lieu of notice provisions.

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