The recent case of Currie v. Nylene Canada Inc. decided here in Ottawa, considered the damages to be awarded to a long-term employee who was pensioned off and then offered subsequent employment by her employer.
Subject to the terms of an employment contract, the law requires an employer that seeks to dismiss an employee without just cause to provide the employee with reasonable notice of termination or damages in lieu thereof. This legal requirement is intended to provide a terminated employee with reasonably sufficient time to look for comparable, alternative employment.
The law of termination is clear. An employer is only required to provide an employee with reasonable notice, not to bridge the actual gap in employment that arises. The applicable reasonable notice period is determined by a court having regard to the following factors: (1) length of service; (2) age; (3) character or nature of employment; and (4) availability of similar employment. The calculation of reasonable notice is therefore dependent on the facts of each case and influenced by awards that are made in similar cases. The upper limit of these awards has been set at 24 months, absent exceptional circumstances.
Employer Fails to Provide Employee with Clear Record of Employment Setting Out Loss of Tenure
The facts in the Currie case are unique and worthy of mention.
Ms. Currie left high school in 1979 at the age of 18 to work as an operator at a fiber manufacturing plant in Arnprior owned and operated by BASF. She was promoted to Chief Operator by the year 2000. In 2004, BASF was sold to Honeywell and in 2005, Nylene purchased the Arnprior plant.
In June 2017 Ms. Currie was approached by the HR Manager at Nylene and informed she was eligible to collect her BASF pension without reduction. She was advised she would have to retire in order to receive her pension but if she wanted to continue working, Nylene would offer her employment. Ms. Currie elected to receive her pension and Nylene offered her employment on the same terms and conditions less than two weeks later.
The employment offer indicated that her accrued and unused vacation would be recognized and that her service would be recognized for purposes of the eligibility provisions of the Nylene benefit plan. The offer was silent on whether her service would be recognized for other purposes such as, for example, in determining her entitlement to notice upon termination.
Following her retirement, Nylene was required to issue a record of employment (“ROE”) to Ms. Currie. The HR Manager testified he would have asked her whether she wanted a copy of the ROE. Ms. Currie did not remember any discussion about the ROE, however, it was acknowledged she asked and was reassured that everything would remain the same with respect to her employment.
Ms. Currie continued with her employment until December 2018 when Nylene discontinued the manufacturing operation in Arnprior. This affected a total of 17 employees. Ms. Currie was 58 at the time of her termination. Upon termination, Nylene paid her termination and severance pay equivalent to 34 weeks’ salary.
Employee Seeks to Include Pre-and Post-Retirement Employment in Calculation of Reasonable Notice Period
Ms. Currie sued Nylene claiming compensation in lieu of notice of termination. At the conclusion of the trial, she sought permission of the Court to amend her claim to seek 26 months’ notice of termination, in excess of the upper limit on notice established through the common law. The judge approved of the amendment on the basis that this position had been clearly advanced since the claim was issued.
At trial, Nylene argued there was a break in Ms. Currie’s employment and service with the company following her retirement. They argued that the notice to which Ms. Currie was entitled should be based on just one year of completed service and not a total of 39 years of service. If they were right, this would give rise to a very different notice period.
Court Finds No Break in Employment Post-Retirement
The judge held there was no break in her employment and service to the company. His Honour pointed to the fact the offer of employment did not exclude recognition of her years of service for other purposes. He reasoned it was incumbent on Nylene to clearly explain to Ms. Currie that she would lose her lengthy tenure as an employee for all purposes if she retired so as to access her BASF pension. This was viewed as a significant change to her employment and one that Nylene had an obligation to bring to her attention, failing which, she could lawfully assume her employment would continue on the same terms. Had this been spelled out to her, it is very possible Ms. Currie would have deferred her pension.
His Honour also put significant weight on Ms. Currie’s employment record. This was a document created by Nylene listing all of the important events in Ms. Currie’s employment with the company from beginning to end. It documented her hiring, promotion and the closing of the fiber operation but did not make any mention whatsoever of her retirement. This was further evidence in the eyes of the Court that Ms. Currie’s retirement did not alter her employment and was not viewed by Nylene as affecting her employment.
With respect to the issue of entitlement to notice, the Court found there were exceptional circumstances to warrant a notice period in excess of 24 months. The judge described Ms. Currie’s situation as “unique” and cited the following factors in support of his conclusion that there were exceptional circumstances:
- Her entire working life was dedicated to working at BASF followed by Honeywell and Nylene;
- At the time of her termination she was 58 years old and closing in on the end of her career;
- She developed skills in a specialized field at Nylene that are not easily transferable to another working environment; and
- Given her age, limited education and skill set, her termination amounted to a forced retirement.
Ms. Currie was awarded 26 months’ notice of termination as claimed or damages in the amount of $138,000.00 less amounts already paid to her by Nylene. Clearly, the most important factors to the Court were the lengthy service and limited employment prospects.
From Nylene’s perspective, this result could have been avoided by providing Ms. Currie with a clear and unambiguous letter and re-employment offer.
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