Ontario Court Of Appeal Upholds 30-Month Notice Period

In the recent decision of Lynch v Avaya Canada Corporation ("Lynch")¹ Ontario's Court of Appeal upheld an astounding 30-month notice period awarded to a non-managerial employee with almost 40 years of service.

Background

Avaya Canada Corporation ("Avaya") terminated the employment of John Lynch, effective March 31, 2021, as a result of a company restructuring. Mr. Lynch had worked for the company and its predecessor as a professional engineer for approximately 38.5 years, since May 1982.

Following his dismissal, Mr. Lynch sued for wrongful dismissal and moved for summary judgment. The motion judge found that Mr. Lynch had been wrongfully dismissed, and ordered Avaya to pay 30 months of damages in lieu of reasonable notice under the common law. Avaya subsequently appealed, arguing in part that the motion judge misapplied the so-called "Bardel factors",² resulting in an excessive notice period.

Analysis

While there is no absolute upper limit or "cap" on what constitutes reasonable notice, Ontario's Court of Appeal previously held - in the leading decision of Lowndes v. Summit Ford Sales Ltd. ("Lowndes")³ - that only "exceptional circumstances" will support a notice period in excess of 24 months.

In this case, Avaya argued that the motion judge erred in holding that Mr. Lynch was within the "exceptional circumstances" category of cases, particularly because Her Honour had failed to identify the Bardel factors relied upon in concluding that a 30-month notice period was appropriate. However, the Court of Appeal disagreed.

According to the Court of Appeal, the following factors amounted to exceptional circumstances in Mr. Lynch's case:

Mr. Lynch specialised in the design software to control unique hardware manufactured by Avaya at its Bellville facility.
• It was uncontested that Mr. Lynch's job was unique and specialized, and that his skills were tailored to and limited by his very specific workplace experience at Avaya.
• During his lengthy employment of 38.5 years, Mr. Lynch developed one or two patents each year for his employer.
• Avaya identified Mr. Lynch as a "key performer" in one of his last performance reviews.
• Although similar and comparable employment would be available in cities such as Ottawa or Toronto, such jobs would be scarce in Belleville where Mr. Lynch, who was almost 64 years old, had lived throughout his employment.

The Court of Appeal found that these factors provided the requisite support for the motion judge's determination that an award in excess of 24 months was justified.

Takeaways for Employers

Since the Court of Appeal's decision in Lowndes almost two decades ago, only a small handful of awards have exceeded 24 months (and the majority of those awards have been in the 26-month range). In this regard, the Lynch decision represents one of the highest reasonable notice awards in recent memory. However, only time will tell whether this decision is just an outlier, or a new high-water mark for wrongful dismissal claims.

Footnotes

1. 2023 ONCA 696.

2. The determination of what is reasonable notice is primarily based on the character of employment; length of service; age at the time of termination; and the availability of similar employment (having regard to the employee's experience, training, and qualifications).

3. [2006] OJ No 13 (ONCA).