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Does COVID-19 Affect the Length of a Reasonable Notice Period?

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In the past year, the challenges created by the pandemic in the workplace have led to new legislations and policies.

You may have had to update your employment contracts to include a lay-off clause or hammer out a remote work policy. Given how the pandemic impacted the economy, there’s been much speculation on whether the pandemic justifies extending the reasonable notice period after termination.

Recent decisions by the Ontario Superior Court of Justice throw more light on this subject. The precedent set by the court in this matter is of relevance to both employers and employees.

Applicable case law

In one recent decision, the terminated employee made a case for a lengthier notice period by arguing that the pandemic had adversely affected the economy. He stated that this had impacted his ability to find alternative employment.

But since the termination occurred (in August 2019) before the start of the pandemic, the court declined the appeal.

The court held that terminations that took place before the pandemic and its impact on the job market “should not attract the same consideration” as dismissals that happened after the pandemic began.

Furthermore, recent case law has also demonstrated that even terminations occurring after the pandemic started do not warrant an extended notice period. In one case, the employee was terminated in March 2020, a week after Ontario declared a state of emergency due to the pandemic. Despite the first lockdown having started, the court declined extending the notice period as the termination took place when the pandemic was in its early stages. Its impact on the job market and the economy was not yet known.

The court also decided against deducting the employee’s Canada Emergency Response Benefit (CERB) payments from the damages owed by the employer.

The court said neither the employer nor the employee “paid into the program or ‘earned’ an entitlement over time beyond their general status as “taxpayers of Canada”.

To sum it up…

So far, the pandemic has not affected the length of a reasonable notice period in a meaningful way. But there is a possibility the courts may decide otherwise if a termination occurs well into the pandemic when its adverse economic impact is known.

Keep in mind that other factors, such as how severely the pandemic affected a particular industry and the health of the employee being terminated (any disability or long-lasting medical effects from contracting COVID-19) may also alter the length of a reasonable notice period.

Employers can protect themselves from liability claims by incorporating a clear and detailed termination clause in their employment contracts.

Do you need help creating watertight employment contracts?

Our experts can help you write job contracts, company policies, and assist you with any other HR, health and safety and employment advice you may need. See how we have helped other small and medium businesses get their business compliant with provincial legislation.

To learn more about how our services can benefit your business, call an expert today at 1 (833) 247-3652.