by Jacqueline Gant
For employers shutting down operations, providing working notice is often the best way to reduce severance amounts owed. Except when it’s not. In McLeod v. 1274458 Ontario Inc., an Ontario court confirmed that working notice is appropriate only for employees capable of working during the notice period.
The employer sold furniture and appliances. The employee (KM) had worked for the employer as a mover for 18 years.
On September 18, 2015, KM was involved in a nonwork-related car accident. He was unable to attend work and began an unpaid leave of absence. On January 29, 2016, KM provided a doctor’s note stating he would be unable to work until March 15, 2016. Two days later, while KM was still off work, the employer sent its employees termination notice. The employer advised that it was shutting down operations on July 31, 2016, and the period from January 31 to July 31 would constitute working notice.
On March 15, the date the employee was originally scheduled to return to work, KM provided a note from a new doctor stating that he was unable to work. Over the next few months, the employer requested further medical information supporting KM’s continued absence. KM provided medical information indicating he could not return to work in any capacity.
On July 21 KM’s doctor cleared him for light duties on a part-time basis. He returned to work on July 27 and 29. As planned, on July 31, the employer closed down operations. On October 31, 2016, KM started a new job for comparable pay.
In April 2017, KM filed a claim alleging wrongful dismissal. The key issue for the court was whether working notice was appropriate when KM was unable to work.
The employer argued working notice was appropriate, claiming that KM had been capable of working. The employer questioned the integrity of the doctor’s notes, alleging that KM had “shopped around” for a doctor that would opine that he was incapable of working. The court summarily dismissed this argument, with the judge finding zero evidence supporting the employer’s position.
The court found that when KM received notice of termination he was incapable of working. Accordingly, working notice was inappropriate and he was entitled to damages representing the salary he would have earned had he worked during the notice period. In coming to this conclusion, the court confirmed that employers should not issue working notice to employees who are incapable of working during the notice period.
Further, the court commented on the employer’s argument regarding KM’s doctor’s notes. If the employer believed the notes were false, it could have rejected them notes at the time and terminated the employee for cause. However, it did not. The court stated the employer was not entitled to accept the doctor’s notes when offered, then question their validity at trial.
In order to determine the appropriate notice period, courts consider the character of employment, length of service, age of the employee, availability of similar employment, and the experience, training, and qualifications of the employee.
In this case, KM had been a driver/mover for the employer for 18 years and was 43 years old when he was terminated. The court determined that KM was entitled to 12 months’ notice. The 12-month notice period was reduced by three months as KM had mitigated his losses by finding a new position. KM was awarded nine months’ base salary as pay in lieu of notice, representing his salary from January 31, 2016, when he received notice of termination to October 31, 2016, when he began his new job.
Lessons for employers
- Do not give working notice to employees who cannot work during that period. Had the employer waited until KM was capable of returning to work, it would have been liable for only three months’ notice, as KM mitigated his damages within three months of the operation’s closing.
- An employer cannot accept doctor’s notes stating an employee is incapable of working at the time, then question the notes after the fact. If an employer is suspicious about the validity of an employee’s doctor’s notes, the issue should be addressed immediately. Waiting until trial to question whether the employee was actually capable of working will find no favor with the court.