The COVID-19 pandemic has introduced many new uncertainties for both employers and employees. One of these uncertainties is how the current economic recession and high unemployment rate will impact the length of reasonable notice an employer must give an employee before terminating the employment relationship. Is an employer obligated to give more notice to compensate for the difficulty the employee will face when trying to find a new job during a pandemic? If so, how much? And should CERB payments be taken into account? Employment lawyers and HR professionals across the country have wrestled with these issues since the beginning of the pandemic.
Now, almost a year later, two
Takeaway 1: Reasonable notice is assessed at the time of termination
This takeaway is not new. However, applying this principle to the COVID-19 pandemic has interesting challenges.
What is not clear from the decision is whether there is a fixed date to use as the "onset" date of the pandemic. For
Takeaway 2: The pandemic might justify a longer period of reasonable notice
But it's not guaranteed. The employee in the second case, Iriotakis, was terminated after the beginning of the pandemic.
Implicit in both cases is an acknowledgment that COVID-19 could impact the amount of reasonable notice if, at the time of termination, it is clear the pandemic had an impact on the availability of similar employment. Given
Perhaps this hurdle is easier to overcome for employees in certain industries than others. Some industries such as accommodation and food services, retail trade, and information, culture and recreation have experienced larger decreases in employment rates than in other industries.7 Other industries such as construction, health care and social assistance have experienced an increase in employment rates as of
Takeaway 3: CERB does not offset the employer's obligation to give reasonable notice
In Iriotakis, the court declined to offset the amount of reasonable notice the employee was entitled to by the amount of CERB payments the employee received. The court distinguished CERB from EI benefits because CERB was an ad hoc programme and neither the employer nor employee "paid into the program or 'earned' an entitlement over time beyond their general status as taxpayers of
Data insights from past reasonable notice cases
Currently, few decisions directly discuss the impact of COVID-19 on reasonable notice. Even the existing decisions have been cautious to avoid equating the pandemic with a higher amount of reasonable notice.
To better predict how the impact of COVID-19 on reasonable notice will unfold, practitioners and HR professionals can look to decisions from past recessions. Past decisions have demonstrated that economic factors such as a downturn in the economy or in a particular sector of the economy may justify a longer notice period given that an employee may have difficulty finding similar employment.10
Blue J's machine learning algorithm has determined that, on aggregate, when poor economic conditions exist in a particular industry or nationally due to a recession, courts have tended to increase the length of reasonable notice by approximately 2.8 weeks.
However, there are numerous factors that impact reasonable notice. The factors are also intertwined such that they can impact one another. Calculating reasonable notice during an economic downturn is not as simple as adding an extra 2 or 3 weeks as a "rule of thumb approach". There remains no static formula for calculating notice periods.
Tools harnessing artificial intelligence, like the ones Blue J develop, are able to provide a much more dynamic and nuanced analysis because they are trained on hundreds of previous decisions.
On average, the Blue J's predictions are within 8% of the actual notice period awarded in a case. Blue J applied its machine learning algorithm to the above two cases and correctly predicted the length of notice awarded in Iriotakis and predicted within 5% of the award in Yee.
Footnotes
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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