Thomas Perry

Barrister and Solicitor

Thomas Perry is an employment and labour lawyer in Toronto, Ontario. He has experience with management-side employment and labour issues, and providing strategic HR advice to businesses.

He can be reached at thomasperry88@gmail.com

Any information provided should be considered for entertainment purposes only and is not legal advice. You should seek independent legal advice before making any decisions. Use of this website does not create a client relationship.

Understanding Bardal Factors and Common Law Notice: A Guide for Employers

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In Canadian employment law, the concept of reasonable notice is central to wrongful dismissal claims. When an employee is terminated without cause, they are entitled to notice of termination or pay in lieu of notice. While the Employment Standards Act, 2000 (ESA) sets out minimum notice periods, employees are often entitled to significantly more under common law. The calculation of common law notice is guided by the Bardal factors, established in the landmark case Bardal v. Globe & Mail Ltd., 1960.

This article explains the Bardal factors, how common law notice is calculated, and what employers need to know to manage termination risks effectively.

1. What is Common Law Notice?

1.1 Statutory vs. Common Law Notice

  • Statutory Notice: The ESA sets out minimum notice periods based on an employee’s length of service. For example, an employee with three years of service is entitled to three weeks’ notice.
  • Common Law Notice: Under common law, employees are entitled to “reasonable notice,” which is often much longer than the ESA minimums. Common law notice is based on the principle that employees should have sufficient time to find comparable employment.

1.2 Why Common Law Notice Matters

Employers who fail to provide adequate notice under common law risk wrongful dismissal claims, which can result in significant financial liability. Understanding how common law notice is calculated is essential for managing termination risks and ensuring compliance with employment law.

2. The Bardal Factors: Calculating Reasonable Notice

The calculation of common law notice is guided by the Bardal factors, established in the 1960 Ontario High Court case Bardal v. Globe & Mail Ltd.. The court held that reasonable notice depends on four key factors:

  1. Length of Service: Longer-serving employees are generally entitled to more notice.
  2. Age: Older employees may require more time to find comparable employment.
  3. Character of Employment: Senior or specialized roles may warrant longer notice periods.
  4. Availability of Similar Employment: The job market conditions at the time of termination are considered.

These factors are not exhaustive, and courts may consider other relevant circumstances, such as the employee’s health or the employer’s conduct during termination.

3. Applying the Bardal Factors: Case Law Examples

3.1 Length of Service

  • Short Service: In Di Tomaso v. Crown Metal Packaging Canada LP, 2011 ONCA 469, the Ontario Court of Appeal awarded 13 months’ notice to an employee with 14 months of service, emphasizing the importance of the other Bardal factors.
  • Long Service: In Laszlo v. Hentchel, 2015 ONSC 1630, the court awarded 22 months’ notice to an employee with 33 years of service.

3.2 Age

  • Older Employees: In Minott v. O’Shanter Development Co., 1999 CanLII 3686, the court awarded 22 months’ notice to a 58-year-old employee with 17 years of service, noting that older employees face greater challenges in finding new employment.
  • Younger Employees: Younger employees may receive shorter notice periods, but this is not always the case. In Cronk v. Canadian General Insurance Co., 1995 CanLII 814, the court awarded 12 months’ notice to a 34-year-old employee with 10 years of service.

3.3 Character of Employment

  • Senior Roles: In Lowndes v. Summit Ford Sales Ltd., 2006 SCC 12, the Supreme Court of Canada upheld an award of 15 months’ notice to a senior manager with 11 years of service.
  • Specialized Roles: In Paquette v. TeraGo Networks Inc., 2016 ONCA 618, the court awarded 22 months’ notice to a specialized IT professional with 17 years of service.

3.4 Availability of Similar Employment

  • Tough Job Markets: In Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419, the court awarded 12 months’ notice to an employee in a small town with limited job opportunities.
  • Strong Job Markets: In Ladore v. Boldt, 2016 ONSC 1146, the court awarded 6 months’ notice to an employee in a strong job market, noting that the employee found new employment quickly.

4. Practical Implications for Employers

4.1 Drafting Employment Contracts

To limit liability for common law notice, employers should include termination clauses in employment contracts. These clauses can specify the notice period or pay in lieu, provided they meet or exceed the ESA minimums. However, poorly drafted clauses may be unenforceable, as seen in Waksdale v. Swegon North America Inc., 2020 ONCA 391, where the Ontario Court of Appeal struck down a termination clause for violating the ESA.

4.2 Conducting Terminations

Employers should handle terminations with care to minimize the risk of wrongful dismissal claims:

  • Provide clear and honest reasons for termination.
  • Offer support, such as references or outplacement services.
  • Avoid making unfounded allegations or acting in bad faith, as this can extend the notice period (see Wallace v. United Grain Growers Ltd., 1997 SCC 30).

4.3 Calculating Notice Periods

When terminating an employee, employers should consider the Bardal factors to estimate the potential notice period. While there is no precise formula, courts often use the following guidelines:

  • Short Service (1–5 years): 1–2 months per year of service.
  • Medium Service (5–10 years): 2–3 months per year of service.
  • Long Service (10+ years): 3+ months per year of service.

These are only rough estimates, and courts may award more or less depending on the circumstances.

5. Recent Developments and Trends

5.1 Increased Judicial Scrutiny of Termination Clauses

Courts have become increasingly strict in enforcing termination clauses. In Waksdale, the Ontario Court of Appeal held that a termination clause that violates the ESA, even in a hypothetical scenario, is unenforceable. Employers must ensure that termination clauses are carefully drafted and comply with all applicable laws.

5.2 Emphasis on Good Faith in Termination

The Supreme Court of Canada’s decision in Honda Canada Inc. v. Keays, 2008 SCC 39, emphasized the importance of good faith in the termination process. Employers who act in bad faith, such as by misleading employees or failing to provide adequate support, may face extended notice periods or additional damages.

5.3 Impact of COVID-19

The COVID-19 pandemic has created new challenges for employers and employees alike. Courts have begun to consider the impact of the pandemic on job market conditions when calculating notice periods. For example, in Yee v. Hudson’s Bay Company, 2021 ONSC 387, the court awarded 22 months’ notice to an employee terminated during the pandemic, citing the difficult job market.

6. Best Practices for Employers

6.1 Review Employment Contracts

  • Ensure that termination clauses are clear, enforceable, and comply with the ESA.
  • Regularly update contracts to reflect changes in the law.

6.2 Document Performance Issues

  • Maintain detailed records of performance issues and disciplinary actions.
  • Use progressive discipline to address performance problems before termination.

6.3 Seek Legal Advice

  • Consult an employment lawyer before terminating an employee to assess the potential notice period and minimize legal risks.
  • Obtain legal advice when drafting or updating employment contracts.

6.4 Handle Terminations with Care

  • Provide clear and honest reasons for termination.
  • Offer support, such as references or outplacement services.
  • Avoid acting in bad faith, as this can extend the notice period.

7. Conclusion

The Bardal factors provide a framework for calculating common law notice, but their application is highly fact-specific. Employers must carefully consider the length of service, age, character of employment, and availability of similar employment when terminating an employee. By understanding the Bardal factors and following best practices, employers can minimize the risk of wrongful dismissal claims and ensure compliance with employment law.

As the legal landscape continues to evolve, employers must stay informed about recent developments and seek legal advice when necessary. By taking a proactive and compassionate approach to termination, employers can protect their interests while treating employees with dignity and respect.