Brito v. Canac Kitchens: Is it Time to Punish Employers Who Low-Ball Notice Periods?

 
Brito v. Canac Kitchens, decided by my favorite employment law judge, Justice Echlin,  raises an issue that I have harped about several times before.  Here’s the scene for my employment law students. An employment contract requires the employer to pay “reasonable notice” of termination, which is usually considerably more than the statutory minimum notice found in employment standards legislation.  Remember, all the ESA says is that an employer cannot give less than the amount of notice listed.  It does not say that the minimum in the ESA replaces a higher contractual amount of notice.  Yet many employers act is if they are only required to give the minimum notice in the ESA.   When an employer gives an employee only statutory notice, they are complying with the ESA, but they are in breach of the employment contract.
Now back to Brito v. Canac.  The employee had 24 years’ service, and one day the employer fires him without cause and gives him only the minimum he is entitled to under the statute (8 weeks’ notice).  According to Justice Echlin, the employer’s counsel, “conceded a notice period of less than 16 months in argument, although Canac at no time advanced any compensation to Mr. Luis Romero Olguin, beyond the statutory minimums.  Later, he modified his alternate notice period submissions to 16 to 19 months.” So, the recap, the employer admits the contract required it to provide between 16 – 19 months’ notice, yet it gave the employer only 8 weeks notice!
I have complained before about this practice.  For example, in Pritchard v. Stuffed Animal House, the employer gave the employee 16 week’s notice even though it told the judge that it knew the contract term (“reasonable notice”) required somewhere between 10 and 14 months.   Do you think that it is wrong for employers to deliberately provide employees with far less notice than contractually required in the expectation that the employee will not sue?
Employers, and the lawyers advising them, often treat the contractual notice period not as legal requirement, but as a negotiable benchmark that they will only have to comply with if a judge orders it.  The problem is that the employment relationship is one based on subordination, so when employers deliberately breach the contract knowing that the employee won’t likely sue, they are abusing their position of power.  As the Supreme Court has noted many times, it is the job of judges to ensure that employees are not not taken advantage of at the point of dismissal, given how important work is to a person’s self-worth and identity, and considering their vulnerability (see, for example, Machtinger v. HOJ Industries).
Justice Echlin seems to agree with that assessment.  In Brito, he found that the “reasonable notice” was 22 months.  A twist in this case was that the employee became seriously ill during that notice period and probably would have been unable to work.  Instead, he would have been covered by the employer’s insurance policy.  So Echlin orders the employer to pay the employee what he would have received from insurance during the period of the notice.   And then Echlin orders an additional $15,000 in “ancillary damages” having regard to “Canac’s cavalier, harsh, malicious, reckless, outrageous and high-handed treatment” of the employee.  He says also that he might have ordered additional Honda v. Keays damages, but that head of damages wasn’t fully pleaded.
Clearly, Echlin was offended by the way the employer hung a long-term employee who was in treatment for cancer out to dry.  We saw a different judge come down hard recently on another employer who was similarly harsh with a cancer-stricken employee in Steve’s Music Store. But pay attention to the legal wrong:  it was simply that Canac elected to pay minimum statutory notice when it knew it was contractually required to pay much more than that (“reasonable notice”).
I like this approach very much.  I think all employers who give only statutory notice when they are required to provide “reasonable notice” under the contract should be dinged with some additional damage award. Courts need to change the culture of non-compliance that permeates the treatment of contractual notice.
Employer counsel will no doubt argue that such an rule would be unworkable because the amount of “reasonable notice” is uncertain.  Fair enough.  So the rule should be that the employer must make a good faith assessment of what a “reasonable range” of reasonable notice would be for an employee, and then provide notice in that range.  If a judge finds that the employer did not engage in that thought process, but instead low-balled the employee, ancillary damages should be ordered to compensate the employee for the unnecessary stress of having to fight what they were plainly and legally entitled to.
So, in Brito, if the employer had given the employee 14-16 month’s notice, as they conceded was in the range of expected outcomes, they would not be dinged with ancillary damages, even though the judge ruled that 22 months was the proper notice.
What do you all think of that?