Beware the one-month-per-year myth

One top lawyer has warned employers not to rely on the common misconception that reasonable notice will be capped according to tenure.

Beware the one-month-per-year myth
A leading industry lawyer has warned employers not to rely on the one-month-per-year myth after a recent case proved reasonable notice doesn’t always correspond with tenure.

The case centres on former employee Bruce Rodgers, who was dismissed after less than three years of service at CEVA Freight Canada – the 55-year-old had been country manager, responsible for the organization’s Canadian business operations which included over 500 employees and annual revenue in excess of $140 million.

On termination, the freight and logistics company provided Rodgers with 2 weeks’ pay in lieu of notice – totalling around $11,000 – and severance pay to the amount of approximately $5,000.

Dissatisfied with the compensation offered, Rodgers brought an action of damages for wrongful termination of employment – ultimately, the court determined he was entitled to a notice period of 14 months based on the following factors:
  • His position had considerable responsibilities and he was the most senior employee in Canada
  • There were limited opportunities for comparable positions
  • He was 55 years old
  • His entire career had been in the trucking and logistics industry
  • The trucking and logistics industry was in a downturn
  • CEVA had induced the employee to leave his previous employment
  • Rodgers was required by CEVA to invest more than $100,000 in company shares at the time he was hired, which the court said indicated an intention that he would have a degree of job security beyond what is typically anticipated
Rodgers eventually received the equivalent of more than 4 months per year of service and total damages of $345,009 – more than 21 times the amount of pay in lieu of notice originally provided by the CEVA.

“The decision serves as a strong reminder to employers that an employee's particular circumstances can significantly increase the notice period beyond one month per year of service,” warns Cox & Palmer associate Alison Bird.

“There is no shortage of cases which confirm the perils of assuming that an employer's liability for reasonable notice of termination will be capped at one month per year of employment,” she added.

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