Ontario Court of Appeal Confirms Employers May be Liable for Longer Notice Periods During COVID-19 and (Possibly) Beyond

In September 2022, the Ontario Court of Appeal in Pavlov v. The New Zealand and Australian Lamb Company Limited (“Pavlov“) confirmed that an employer may be liable for a longer notice period, even for a short-term employee, based on prevailing economic factors beyond the parties’ control. In this case, it was COVID-19.

At trial, the judge turned to the well-established Bardal factors to determine the length of reasonable notice, including the age of the employee, character of employment, length of service, and availability of similar employment. In the Court’s analysis, it considered that Pavlov was forty-seven years old at the time of termination, had only served a short term of approximately three years in his position, and although his position was a senior role, he was not a corporate director or an officer. Nevertheless, the Court emphasized the “prevailing economic uncertainties” of COVID-19 which had a negative impact on Pavlov’s ability to secure similar alternative employment. As a result of these circumstances, the Court determined that Pavlov was entitled to ten months’ reasonable notice of termination, and consequently pay in lieu thereof, as opposed to the three to five months offered by NZAL Co. The Court also rejected NZAL Co.’s argument that Pavlov failed to mitigate his damages by not seeking adequate employment. On the contrary, Pavlov gave evidence accepted by the Court demonstrating that he applied to over 100 jobs for which he was qualified, but remained unemployed at the time of trial. Finally, the Court found that Pavlov was eligible for his annual bonus and benefits that he would have earned during his notice period.

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