One of my favorite employment law cases has always been Cronk v. Canadian General Insurance. In the lower court, Justice MacPherson, my old Dean at Osgoode Hall Law School, ruled that the common law practice of awarding a maximum of 12 months notice for non-managerial employees and of 24 months for managerial employees was not a “rule”, and that courts needed to view each case on its own merits. It made no sense to MacPherson that the law should simply assume that a 60-something female clerical employee would be able
to find comparable new employment quicker than an 35 year old MBA from Schulich who is dismissed from his management position. It’s a great case because it involved a judge with little employment law background looking at an employment law principle and saying essentially, “that’s elitist, sexist, makes no sense, and is completely at odds with reality”.
Cronk v. Canadian General Insurance (Court of Appeal, 1995)
The Court of Appeal reversed this decision, upholding the distinction between the length of notice recoverable for managerial and nonmanagerial employees. The Court ruled that removing the distinction would cause too much confusion for employers and employment lawyers:
The result arrived at has the potential of disrupting the practices of the commercial and industrial world, wherein employers have to predict with reasonable certainty the cost of downsizing or increasing their operations, particularly in difficult economic times. As well, legal practitioners specializing in employment law and the legal profession generally have to give advice to employers and employees in respect of termination of employment with reasonable certainty.
So the Court of Appeal reduced the notice period for Cronk from 20 months to 12 months, the most available to a non-managerial employee.
Minott v. O’Shanter Development (1999, Ontario Court of Appeal)
However, the foundation of that Court of Appeal’s reasoning in Cronk began to erode soon afterwards. In the 1999 decision in Minott v. O’Shanter Development, the Court of Appeal revisited the question of whether there should be an arbitrary cap on reasonable notice damages tied to whether the employee was managerial or not. For law students, this is a great example of how to distinguish an unhelpful decision. Minott was a metal worker, not a clerical worker like Ms Cronk. That was enough to distinguish the Cronk decision. The Court of Appeal said this in Minott:
I do not regard this court’s decision in Cronk as establishing an upper limit of 12 months notice for all non-managerial or non-supervisory employees. At most it deals with one occupational category, clerical employees. Moreover, the imposition of an arbitrary 12 months ceiling for all non-managerial employees detracts from the flexibility of the Bardal test and restricts the ability of courts to take account of all factors relevant to each case and of changing social and economic conditions.
Thus, not only does the Court distinguish Cronk based on occupation (a weak distinction, at best), it also takes the opportunity to once again question the very legitimacy of a hard distinction based on character of employment, as had MacPherson in the lower court decision in Cronk. Minott received 13 months, even though he was an unskilled nonmanagerial employee with only 11 years service.
Back to MacPherson: Di Tamaso v. Crown Metal Packaging (2011, Court of Appeal)
Fast forward a decade to 2011. Justice MacPherson now sits on the Court of Appeal, and along comes DiTamaso v. Crown Metal Packaging. I remember from my law practice days walking into a hearing or court room and seeing the chair or judge assigned to hear the case and cringing. I imagine that lawyers for Crown Metal would have felt that way when they arrived at the hearing of their appeal only to find Justice MacPherson presiding.
Di Tamaso worked 33 years as a non-managerial mechanic. In September 2009, he was given notice that he would be terminated on November 6, 2009. However, his termination date was then extended by a series of short-term temporary assignments. Finally, in February 2010, he was given his final notice of termination with a termination date of February 26, 2010. He was 62 years old. He sued to recover reasonable notice and was awarded 22 month’s notice by the motions judge. The employer appealed, arguing that since Di Tamaso was unskilled and nonmanagerial, he was only entitled to a maximum of 12 month’s notice, as per Cronk. Justice MacPherson was waiting for them.
MacPherson, writing for the Court of Appeal, rejected out of hand the employer’s argument that Cronk had established a hard cap on reasonable notice of 12 months for nonmanagerial employees and 24 months for managerial. He said that Minott ended that debate:
[23] … I agree with Mr. Di Tomaso that this court’s decision in Minott is a full answer. Laskin J.A. rejected the notion that 12 months is the cap for every clerical and unskilled employee, regardless of the other Bardal factors.
MacPherson also makes sure to point out recent cases that confirmed the reasoning he had applied when he decided the lower court decision in Cronk, that there is no logic to the assumption that nonmanagerial employees will have an easier time finding alternative employment:
[27] Crown Metal would emphasize the importance of the character of the appellant’s employment to minimize the reasonable notice to which he is entitled. I do not agree with that approach. Indeed, there is recent jurisprudence suggesting that, if anything, it is today a factor of declining relative importance: see Medis Health and Pharmaceutical Services Inc. v. Bramble 1999 CanLII 13124 (NB CA), (1999), 175 D.L.R. (4th) 385 (NBCA) (“Bramble”) and Vibert v. Paulin 2008 NBCA 23 (CanLII), (2008), 291 D.L.R. (4th) 302 (NBCA).
[28] This is particularly so if an employer attempts to use character of employment to say that low level unskilled employees deserve less notice because they have an easier time finding alternative employment. The empirical validity of that proposition cannot simply be taken for granted, particularly in today’s world. In Bramble, Drapeau J.A. put it this way, at para. 64:
The proposition that junior employees have an easier time finding suitable alternate employment is no longer, if it ever was, a matter of common knowledge. Indeed, it is an empirically challenged proposition that cannot be confirmed by resort to sources of indisputable accuracy.
[29] In my view, the motion judge conducted an appropriately holistic review of the case before her. She did not give disproportionate weight to any of the Bardal factors.
It must be a great feeling as an appellant judge to write a decision confirming that the law has finally caught up to your own views as expressed 16 years earlier. Di Tamoso was awarded 22 month’s, calculated from the final date in the last notice of termination (Feb. 26, 2010), not from the September 2009 date when the first notice of termination was provided. If an employer permits an employee to work past a notice of termination date, then the original notice expires.
What Does It Mean?
It seems clear that Ontario courts are no longer to blindly cap reasonable notice damages based on the bald assumption that nonmanagerial employees should be treated less generously than managerial employees. There is no hard cap on notice damages. Long service employees, particularly those of advanced years, are likely to be entitled to long periods of ‘reasonable notice’, without being capped at 12 months. Awarded in the 20-24 month range will still be rare.
Do you think it is a good idea for the court to put to the rest the cap on reasonable notice damages, and the distinction between managerial and nonmanagerial employees?
What about the Court of Appeal’s concerns expressed in Cronk that the cap is needed to promote predictability in employment law?
