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Another 24 Month Severance Award In Alberta
Oostlander v Cervus Equipment Corporation, 2022 ABQB 200 is a new Alberta Court of Queen’s Bench case where the court awarded a terminated employee 24 months reasonable notice (severance).
This case is interesting because this length of reasonable notice is not very common. The court also found that CERB benefits the employee received were to be deducted from his severance award, and that he was not obligated to commute 100 kms to work at a new job in order to mitigate his damages. One unusual aspect of the case was that the employer had already provided him sixteen (16) months of termination notice prior to termination, but in the circumstances that did not count towards the severance he was owed.
Below are the pertinent facts found by the Alberta Court of Queen’s Bench:
- The 60 year old employee had worked for the employer as a heavy duty mechanic in its Bassano location for 36 years
- The employer made the decision to move its equipment servicing to medicine hat and to convert is Bassano location to a parts store
- The employee was provided notice that his employment was going to end in 16 months
- Near the end of that 16 months, the employee’s understanding was that the Bassano location would not be closing on the original timeline. The employer confirmed this, and the employee kept working beyond the 16 months
- Some time shortly thereafter, the employer advised the employee that his employment was ending, and offered to give him 1 month notice, reasoning that he already had been provided 16 months previously
- The employer also offered to hire the employee at the Medicine Hat branch at the same compensation, plus a signing bonus
- The employee refused the offer
- The employee did not get re-employed in the subsequent two years
- The employee collected CERB following his dismissal
- The employee sued for wrongful dismissal, seeking reasonable notice (severance)
Analysis / Conclusion
The employer argued that the original 16 months of working notice should count towards whatever severance the employee was owed. The court disagreed, noting that where an employee works past end of the “notice period”, the notice period does not count. The court also noted that for working notice to be effective at all, it must be specific, unequivocal and clearly communicated to the employee. Essentially, the fact that the employer changed its mind about the end date rendered that previous notice ineffective and irrelevant.
The employer then argued that the employee had failed to mitigate his damages by refusing to accept its offered position in Medicine Hat. The Court found that the employee’s refusal of that position was not unreasonable, given that he worked in the same position, for the same employer, for 36 years, and that he would have a daily commute of 100 KMs per day unless he moved to Medicine Hat.
The court went on to award the employee a reasonable notice (severance) of 24 months, pointing to the following as being the most relevant factors supporting that period in this case:
(a) He was 60 years of age at the time of termination;
(b) He had lived in Bassano for many years and remaining there would mean a limited number of opportunities for new and similar employment;
(c) He had had one employer for virtually all his life; and
(d) He had had one job description and one job title for virtually all his life.
Finally, the court considered whether the CERB payments the employee had received following termination of employment should be deducted from his severance damages against his employer, and ordered that they were to be deducted in order to prevent “double recovery”.
This case is important because a 24 month notice period is relatively rare, especially where the employee is not senior or executive management.
The employer’s decision to give 16 months’ notice and then change its mind is unusual, but more common than one might expect – I have personally seen this happen several times and taken the same position that was taken by the plaintiff in this case. The reason for the rule that notice has to be specific, unequivocal and clearly communicated is related to the function “notice” serves for an employee: the employee needs to know what is happening and to have time to make life adjustments and look for work; if the notice is uncertain or subject to change, the employee does not really know if or when the employment is ending (i.e. they don’t really have meaningful “notice”).
Bow River Law provides these regular legal blog articles for the purposes of legal education and research for the public and the legal profession. These articles should be considered general information and not legal advice. If you have a legal problem, you should speak to a lawyer directly.
Bow River Law is a team of knowledgeable, skilled and experienced lawyers handling employment law, human rights (discrimination) and labour law matters. Bow River Law is based in Calgary but we serve Alberta. Let us help you.