Cracking the Severance Cap! New 26-Month Termination Notice Period Case

By: Joel Fairbrother

Published: 26 April 2021

currie appeal severance

Currie v Nylene Canada, 2021 ONSC 1922 is case out of Ontario which awarded a 26-Month Reasonable Notice Period.  This is quite significant, because many cases have established that the general cap is 24 months, and only a very limited number of cases have exceeded that.  I am not aware of any recent Alberta case to exceed 24 months, but this could be around the corner if the caselaw continues in the direction of Currie

First, a little history

There was a recent history when notice periods exceeding 24 months were not as uncommon.  In the famous decision Wallace v UGG, [1997] SCJ No 94 (QL), the SCC found that the courts had discretion to increase the notice period where there was bad faith by the employer in the termination of employment.  This resulted in very long notice periods in some cases.  This practice was put to a stop in Honda v Keays, 2008 SCC 39 where the SCC directed that the notice period was not to be extended “arbitrarily” for this reason.  From then on, notice periods exceeding 24 months have been very rare.

In Cardenas v Kohler Canada Co., [2009] OJ NO 1570 (ONSC), an Ontario court found that a reasonable notice period of 26 months was appropriate for a 43 year old shift supervisor with 27.5 years of service.  There was nothing striking to me about this case, but the court decided 26 months was appropriate.  I would suggest this case is unlikely good law in Canada at this point. 

In Hussain v Suzuki Canada Ltd., [2011] OJ No 6355 (ONSC), an Ontario court found that a reasonable notice period of 26 months was appropriate in the case of a 64 year old warehouse supervisor with 35 years of service with few transferrable skills.  In this case, it was the only full time job the plaintiff had ever held in Canada.  In this case, that combination of factors is somewhat striking in my view and the 26 month notice period does not surprise me at this point in history.

In Keenan v Canac Kitchens Ltd., 2015 ONSC 1055, an Ontario court found that a 26 month reasonable notice period was appropriate in the case of 2 different plaintiffs aged 63 and 61 years and with 32 and 25 years of service respectively, both holding supervisory positions.  The Ontario Court of Appeal upheld this award at 2016 ONCA 79, and seemed to give weight to the fact that these employees were the face of the company to the outside world for a long period, and these jobs had been the entirety of their working lives.  In this case, the combination of factors is somewhat striking in my view and the 26 month notice period does not surprise me at this point in history.

In Carroll v ATCO Electric, 2018 ABCA 146, the Alberta Court of Appeal seemed to affirm that in Alberta, the 24 month “rough upper limit” for a reasonable notice period still applies in Alberta.

In Dawe v The Equitable Life Insurance Company of Canada, 2019 ONCA 512, the Ontario Court of Appeal clearly tried to close off the Ontario cases exceeding 24 months.  The plaintiff in this case was 62 years old, with 37 years of service and had held a very senior position.  He had been awarded a 30 month notice period at trial.  The Court of Appeal reduced the 30-month notice period awarded at trial down to 24 months, stating that there would have to be “exceptional circumstances” to award more than 24 months, and that those were not present in this case.

In McLean v Dynacast Ltd., 2019 CarswellOnt 21931 (ONSC), an Ontario court awarded 28 months of notice.  This case was decided after, and cites, Dawe.  The reasoning in this case is seriously questionable, because the court seemed to be implicitly awarding more than 24 months on the basis of bad faith conduct by the employer, like in the 1997 case Wallace!  My mind is, frankly, blown by this reasoning in light of a clear SCC decision in Keays.

The Currie Case

In the Currie case I am summarizing here, the court awarded 26 months and reasoned as follows:

[84]  The Ontario Court of Appeal has recently held in Dawe that exceptional circumstances will be required in order to support a notice period that exceeds 24 months. […] When combining and applying all of the factors to Ms. Currie’s unique situation, I am of the opinion that taken as a whole, it supports the conclusion that there are exceptional circumstances:

a. Ms. Currie left high school to start working at BASF as a temporary twisting operator, earning $4.50 per hour. She secured this job through her father who had worked there for over 30 years until his retirement in 1999. She was eventually promoted to a supervisory position and she has faithfully remained with one employer (Nylene and its successor employers) for 39 years. Her entire working life has been dedicated to working at the Arnprior plant. She has known nothing else.

b. At the time of termination, Ms. Currie was 58 years old. She was in her twilight working years, closing in on the end of her career.

c. She has worked and developed skills in a very specialized field (fiber production operation). Finding similar employment, as described later in this decision, has not been easy. Ms. Currie has made diligent efforts to mitigate and attempt to gain basic computer skills. That said, I am not convinced that she will succeed in securing alternative employment, by no fault of her own.

d. Since Ms. Currie entered the workforce in 1979, the work landscape has evolved and changed significantly. Ms. Currie’s experience has been limited to one employer (Nylene and its predecessors), in one type of environment (specialized manufacturing job), which makes it very difficult to transfer her skills to a new employer.  

e. Given Ms. Currie’s age, limited education and skills set, the termination was equivalent to a forced retirement. She must compete with people that are much younger than her and that have a different set of skills that may be required such as advanced computer knowledge. She is not well equipped to effectively compete in today’s market or secure comparable employment.

[85] Considering Ms. Currie’s unique situation and combining all of the factors set out in Bardal, I conclude that Ms. Currie has demonstrated the existence of exceptional circumstances.

I am not overly surprised by the Currie case, because the combination of factors are somewhat striking.  I would suggest that the reasoning is somewhat in doubt even in Ontario however, given that the facts are very similar to cases decided prior to Dawe (and really, even Dawe itself) and Dawe appeared to be a move away from notice periods over 24 months except in “exceptional” circumstances.

Whatever its potential problems, the Currie case gives some more life back to the potential of cracking the notice period cap!

Happy Hunting.

About Joel Fairbrother

Joel Fairbrother is a Partner at Bow River Law LLP in Calgary, Alberta.  Joel Fairbrother started this firm with his highly capable Partner Sarah Coderre.

Bow River Law is a brand-new firm, but our lawyers are knowledgeable, skilled and experienced in employment law, human rights, and labour law in Alberta. 

If you are an employee whose employment has been terminated, let us determine if you are being offered appropriate severance and help you with your legal options.

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The Currie v Nylene case can be found at the following link on CanLii: