There is a common belief that employees are entitled to termination pay (wrongful dismissal) in the equivalent of one month per year of service. That belief or arguably “hope” is in fact contrary to case law and in fact has been specifically rejected by Appellant Courts in the Province of Ontario. There is no “rule of thumb” of one month per year of service for damages for wrongful dismissal. Any employment lawyer can attest to that. Although the Employment Standards Act https://www.ontario.ca/document/your-guide-employment-standards-act-0
sets out payments which are easily calculated based on years of service, common law (wrongful dismissal) payments are based on “reasonable notice” which takes into consideration the person’s age, position, years of service, and availability of alternate employment. In other words, there is no simple or easy formula to quantify damages for wrongful dismissal. The “perception” that an employee is entitled to one month per year of service upon termination cannot only be harmful in assessing notice as too high in cases of long service employees, but can also undervalue claims of short service employees. An employment lawyer will be in the best position to assess the value of your specific claim for wrongful dismissal damages based on the unique circumstances of your specific case.
Generally, short-term managerial employees are entitled to significant notice periods for wrongful dismissal far in excess of one month per year of service. It is not unreasonable for some short service employees to be entitled to a minimum of three months and in many cases, six months or more. For example, a decision in Crawford v. Rice Financial Group Inc.,
https://www.canlii.org/en/mb/mbqb/doc/2003/2003mbqb216/2003mbqb216.html?autocompleteStr=crawford&autocompletePos=3 , a decision of the Manitoba Court, dealt with a 45-year old Chartered Accountant who left a job to join Rice Financial Group Inc. The Plaintiff, Mr. Crawford, was looking for other work and there was no issue that the notice period ought to be increased as a result of inducement or enticement. Mr. Crawford was employed with Rice Financial Group Inc. for 20 months earning approximately $82,000.00 per year when he was terminated. The Court found that five months’ salary in lieu of notice for wrongful dismissal was appropriate or more than two months per year of service. Had inducement or enticement been found, which will be argued by employment lawyers in appropriate circumstances, the notice period would likely have been significantly higher.
There is no scientific method to calculate appropriate notice or damages for wrongful dismissal. Every case is different and is dependent on its own specific facts. It is best to have your specific case assessed by an experienced employment lawyer. When terminated, an employee ought to obtain an opinion from a competent employment lawyer as to the value of their potential claim, failing which they may not obtain full compensation.
Marvin A. Gorodensky has over 18 years experience in Employment Law. He can be reached at (416) 323-9395, or at www.dismissed.ca.