November 28, 2014 By: Jim Anstey
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A wrongful dismissal decision of the Ontario Superior Court released earlier this year has continued the trend of granting relatively long notice periods to senior employees with relatively short service. The decision in Felice v. Cardinal Health Canada Inc., 2014 ONSC 1190 has flown largely under the radar. Though it has received some limited attention in the media, it has not been given much attention by the employment law bar. 

At the time his employment was terminated, Mr. Felice was 52 years old and occupied the position of National Director, Supply Chain. He was earning $130,000 annually and was eligible for incentive compensation and executive-level benefits. He had been in the position for only three months, prior to which he had been a VP for 16 months at a company merged with Cardinal. Although Cardinal argued that Mr. Felice had only three months of service, Justice Pollak held that Mr. Felice’s service with the merged company should be included; thus giving him 19 months of service.

Mr. Felice’s initial employment contract with the merged company contained a termination clause affording him “12 months of income” in the event of termination. Upon Mr. Felice taking on the new role with Cardinal, he and Cardinal agreed to a new set of terms, including increased salary and benefits. There was no reference in the new terms to entitlements on termination. It is interesting that in this case the employee argued for the application of a contractual termination provision; whereas the employer argued the employee was entitled only to common law reasonable notice.

Justice Pollak held that the reasonable expectations of the parties must have been that the new set of terms would exclusively govern the employment relationship, and that common law reasonable notice applied to Mr. Felice’s entitlements on termination. She noted that the case law favours lengthy notice periods for employees like Mr. Felice and awarded him a 12-month notice period:

37   There is a lot of judicial support for awards to short term senior executives receiving lengthy notice periods, both with and without enticement as a factor…

36   I agree with Mr. Felice that a 12 month period of notice, having regard to the Bardal factors and based on the jurisprudence relied on, is appropriate.

As you can see, although Justice Pollak awards a notice period that is equivalent to Mr. Felice’s entitlement in the former non-operative employment agreement, she is careful to confirm that her award is based on the Bardal factors and case law for similarly situated employees. As noted above, this decision is illustrative of the trend we have seen whereby the Courts are awarding lengthy notice periods for senior employees with short service. It should not be surprising given the Courts have long advised against allowing any one of the Bardal factors to dominate the calculation of the reasonable notice period, and length of service is only one of the Bardal factors.

The Felice decision is not available on CanLII; therefore those wishing to read the decision must consult a decision reporting service or hopefully find a copy online.

This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2017 Nelligan O’Brien Payne LLP.

Service: Employment Law