Common Law Notice and Employment Standards Act

In Canada, employers are generally required to give common law notice to employees if they have been fired without cause. Common law notice can be several weeks, several months, or even a couple of years. In Canada, the maximum amount of common law notice is generally 24 months whereas the minimum is usually no less than three months.

The reason for common law notice is to give employees the time they need to find a new job. For common law notice, employers may dismiss an employee without cause if they provide reasonable notice before terminating their employment. Employers may generally provide reasonable notice by providing:

1. working notice or
2. pay in lieu of working notice.

For example, if an employee is given 3 weeks of working notice, they will be required to continue working for 3 weeks, and then their employment will be terminated. If an employee is terminated immediately, an employee would need to be given pay in lieu of notice.

Common Law Notice

The history of common law dates back to the 1800’s in Britain when agricultural employers wanted to make sure they had sufficient labour to complete the harvest. A one-year contract helped employers ensure they had employees and also helped employees ensure they had a steady income. Canadian judges in all provinces adopted this system; judges thought it was reasonable to require one-year contracts terminable only by providing the other party with notice of a length equal to the period remaining on the contract.

The practice of one-year contracts over time became replaced with employees being hired on indefinite employment contracts, or put otherwise on contracts with no set end date. Most employees in Canada today are on indefinite employment contracts. In Ontario in 1960, the Ontario High Court of Justice set out the criteria for determining appropriate calculation for determining common law notice in the case of Bardal v. The Globe & Mail Ltd., 1960 CanLII 294 (ON SC) [in 1960 O.W.N. 253 (H.C.J.), stating (at para. 21):

“[t]here can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.”

Therefore each case requires a specialized analysis of how long ‘reasonable notice’ will be. There is no table that can be used to predict common law reasonable notice.

To this day, a fixed term contract is usually allowed to be terminated by giving working notice or pay in lieu of working notice equal to the remainder of the fixed period. In contrast, generally an employee in the United States is not entitled to any common law notice even if they are terminated without cause.

• Learn more about history of common law notice

Common law is a judge-made law from years and years of decisions in Canadian courts. Common law is not a law that is legislated by the government. These are known as statutory laws.

Common law notice is when you get notice or pay in lieu of notice if you are let go from work. You require the assistance of an employment lawyer to get the common law notice and the reasonable notice you deserve.

Types of Notice You Are Entitled To If You Were Fired Without Cause

If you were fired without cause in Ontario, there are two types of “notice” that apply to most provincially regulated employees:

1. Employment Standards Act and
2. Common Law Notice

Employment Standards Act Notice

The first type is outlined in the Ontario Employment Standards Act (“ESA”), which sets out an employee’s bare minimum employment standards. This is similar to how all employees are owed minimum wage, but most employees earn substantially above minimum wage. This law indicates that employees with more than three months of service must receive a bare minimum of one to eight weeks of notice, depending on their length of service.  

For the minimum statutory obligations to apply, it must be clearly stated in the employment contract. If you did not sign any employment contract at the commencement of your employment, the employment contract does not have a termination provision, or the termination provision is ambiguous, then you will be entitled to common law termination notice or payment in lieu of notice, that can range from usually three month of severance up to 24 months’ common law notice or severance depending on several factors as mentioned below.

Common Law Notice Ontario

The second type of notice and the much greater entitlement is common law notice, known as the “reasonable notice period”. While the ESA notice period is purely based on an employee’s years of service, the common law notice attempts to estimate how long it will take that employee with their unique circumstances, to find their next job. While the ESA notice period has a maximum of eight weeks (plus twenty-six weeks of severance) of notice, a common law notice period is usually much longer and may be as much as 24 months. In exceptional circumstances, notice may even be longer. In the Ontario case of Currie v. Nylene Canada Inc., 26 months’ notice was awarded. Read more details about the case and why the judge decided to award the plaintiff 26 months’ notice.

If you are entitled to common law notice, it must be determined exactly how much notice would be appropriate. Over the years, our common law has identified key factors which inform the determination of how much notice is reasonable. Lawyers and judges will determine what is reasonable based on the facts of each individual case. They will consider several factors that have come to be known as the “” factors. These factors include:

• The character of employment;
• The length of service (longer service typically means more notice);
• The employee’s age (higher age typically means more notice); and,
• The availability of similar employment. If it will be difficult for you to find a similar job, this will increase your notice period.

Other considerations are also relevant to how much notice is reasonable, including whether you were induced or recruited to leave another job for the current one.

Common Law Notice in Other Provinces in Canada

Common Law is the law in Canada. However, some provinces have different protections for employees grounded in legislation. Please check your province for employment lawyers who can help you get the money you deserve. Employers will rarely offer what you are owed. For that reason, you should not sign off on a severance package before having it reviewed by credible employment lawyers.

Common Law Notice for Federally Regulated Employees

For federally regulated employees, statutory notice applies under the Canada Labour Code. If an employee has completed three consecutive months of continuous employment, an employer must provide an employee with at least two weeks written notice of their intention to terminate an employee. In lieu of written notice, the employer must pay two weeks wages at the regular rate to the employee.

This requirement applies to any employee whose employment is being terminated except as follows:

1. an employee who terminates their own employment;
2. an employee who is dismissed for just cause;
3. an employee who is on a lay-off that does not constitute a termination of employment;
4. where the contract provides an end and that the work ends on that date.

A federally regulated employee qualifies for severance pay if they have completed at least 12 consecutive months of continuous employment. Severance pay is two days’ pay at the employee’s regular rate of wages for each full year of employment, with a minimum of five days’ pay.

An employer who terminates the employment of an employee who has completed twelve consecutive months of continuous employment by the employer shall, except where the termination is by way of dismissal for just cause, pay to the employee the greater of

• (a) two days wages at the employee’s regular rate of wages for his regular hours of work in respect of each completed year of employment that is within the term of the employee’s continuous employment by the employer, and

• (b) five days wages at the employee’s regular rate of wages for his regular hours of work.

Reference: Severance Pay, Canada Labour Code, Government of Canada

An employer is required to pay statutory notice pay in all circumstances except as follows:

1. when a lay-off does not result in a termination of employment;
2. when an employment contract contains an end date and the contract ends;
3. when an employee is dismissed for just cause; and
4. when an employee quits or terminates their own employment.Reference: Rights on Termination of Employment, Government of Canada.

Common law notice is also available to non-unionized federally regulated employees. There are several factors that need to be evaluated in determining common law severance payment. Our experienced employment lawyers will discuss your case in detail and will advise you regarding how much severance you are entitled to.

Importantly federally regulated employees with over one year seniority have a third method, which is unjust dismissal. Federally regulated employees have union-like protections and can ask for their jobs back if they have been unjustly dismissed under the Canada Labour Code, section 240. In 2016 the Supreme Court of Canada found that backpay with the offer of reinstatement could not be ‘bought out’ by an employer by them paying reasonable common law notice in the case of Wilson v. Atomic Energy of Canada Ltd., 2016 SCC 29 (CanLII), [2016] 1 SCR 770, <https://canlii.ca/t/gsh2f>. Employees can make unjust dismissal complaints through their own private lawyer.

Common Law Notice Applies To the Following Types of Employees

By default, all non-unionized employees in Ontario (and Canada) are entitled to common law notice of termination of employment. Every employee, who does not have an enforceable termination clause, who is terminated without cause is entitled to common law notice. Employees who are let go for “just cause” are not entitled to notice.

Common Law Notice Does Not Apply To the Following Types of Employees

Although most employees in Canada are entitled to common law notice, unfortunately, some employees will not be. Employees who  are not eligible for common law notice include:

• Unionized employees: Unionized employees are not able to sue for wrongful dismissal. The rights of these employees are governed by their respective collective agreements. However, unionized employees have other protections available to them under the Ontario Labour Relations Act, 1995, including that they cannot be terminated without “just cause”.

• Fixed-term contract employees: Common law notice is only available to employees working under an indefinite contract. Where an employee under a fixed-term contract has been dismissed in breach of their contract, they may only be entitled only to the balance of the term. This can be both good and bad for employees. For instance, an employee under a two-year contract who has been terminated after only one year will be owed an entire year’s pay. On the other hand, if they were terminated 22 months into their contract, they may only be owed the remaining 2 months’ pay. One important factor would be if there were many one-year contracts, which can be found to automatically convert into an indefinite contract, see Ceccol v. Ontario Gymnastic Federation, 2001 CanLII 8589 (ON CA), <https://canlii.ca/t/1fnnp>.

• Employees terminated “for cause” or wrongful dismissal: These employees will not be entitled to any common law notice whatsoever. However, employers may say a termination is “for cause” when no cause truly exists. The employer might simply be attempting to avoid having to pay you appropriate notice. If you have been terminated “for cause”, you should speak with an employment lawyer.

• Employees with enforceable contracts: It is possible that your employment agreement, if enforceable, limits your entitlement to the minimum set out in the Employment Standards Act, 2000. While this is possible, it is exceptionally rare. Most contracts are unenforceable in this regard, and the employment lawyers at Monkhouse Law have been successful in making this argument. To determine if your contract is enforceable, you should speak to an employment lawyer. Currently, the vast majority of contracts that purport to limit common law notice are unenforceable in Ontario, Monkhouse Law estimates that over 90% of current contracts are unenforceable under the current law.

• Employees who have signed releases: You should never sign a release before speaking with an employment lawyer. If you do, you may miss out on several months’ worth of notice.

Common Law Severance

The amount of common law severance that an employer is required to give depends on the facts of each case. There is no formula, and no two cases are the same. It is more of an art than a science. However, there are some of the key factors used to determine common law severance are:

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Toronto Employment Lawyers at Monkhouse Law

Employment Lawyers at Monkhouse Law specialize in Employment Law, Human Rights Law, and Disability Insurance Law. We serve employees, independent contractors and employers, and strive to get optimal results for every client through skilled advocacy and research on each matter. We have successfully represented clients before all levels of court in Ontario, including the Superior Court, the Divisional Appeals Court, and the Court of Appeal as well as the Supreme Court of Canada.

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