COVID and wrongful dismissals

Should the effects of the COVID-19 pandemic on an employee’s job search affect a terminated employee’s reasonable notice entitlement? When looking at wrongful dismissal decisions that have been released during the pandemic, it comes down to timing, says Barry Fisher, an employment law mediator in Toronto.

“The first couple of cases, people were terminated prior to the onset of the pandemic so the court said, ‘Well, it’s not legally relevant,’” says Fisher. “But in later ones, these people were terminated in the course of the pandemic so they’re now saying, ‘The employer was aware of the situation and we’re going to take it into account.’”

This follows a principle in employment law when looking at notice entitlement — the employer is supposed to make the right decision regarding notice of dismissal according to the circumstances on the day of termination, not events occurring afterwards.

“It’s like a snapshot — what was the world looking like on that day?” says Fisher. “There are cases where something happens after the fact, but is that relevant to the notice period? Generally speaking, it’s not.”

However, as the pandemic has dragged on, more decisions are coming out dealing with dismissals that occurred during the pandemic. The Ontario Superior Court of Justice in its recent decision Pavlov v. The New Zealand and Australian Lamb Company — in which a 42-year-old construction labourer was terminated during the pandemic, couldn’t find a job, retrained and still couldn’t find a job — stated that the timing of an employee’s dismissal during the pandemic led to an inference that “the effects and uncertainties of the pandemic were obstacles to Pavlov’s efforts to obtain alternate employment.”

The court added that the “prevailing economic uncertainties” that negatively affected the employee’s ability to find a new job should be factored into the calculation of the employee’s notice entitlement.

Small notice bump-up

However, while courts may be factoring the pandemic’s effects on employees’ ability to find alternate employment, Fisher doesn’t see it as an area of serious concern for employers.

“It seems to have had, at best, a modest effect on the notice periods. I predicted early on that it was probably going to be a fairly neutral factor,” he says, pointing out that the bump-up in Pavlov was two weeks on top of a four-month notice award.

The pandemic has hit everyone hard, including employers, and courts realize this when considering the possibility of adding a bump to the notice entitlement, says Fisher.

“For all the times that employers cried wolf about bad economic times over the last 40 years, this one’s real. [Employers] are desperate, so in the minds of the judges, everyone’s suffering and they can’t pin it on these guys.”

A pandemic bump-up is part of the Bardal factor relating to the likelihood of a terminated employee finding similar employment, so it’s not going to apply to everyone, as some sectors of the economy have fared well during the pandemic and have more job opportunities, says Fisher.

“There are some industries that did well; for instance, if you were an emergency room nurse, you probably have a job; if you’re a warehouse person or truck driver or something [maybe not]. Not every job has been affected, some jobs have done better.”

Since courts are factoring in the difficulty for terminated employees to find alternate employment during the pandemic, can employers hope that wrongful dismissal decisions could factor in economic hardship for employers in determining damages for notice of dismissal?

“Not at all, and there is a rational reason for that,” says Fisher. “The people who are severely affected probably don’t go to court — the odds are either the case settled because the employee got nervous and wanted to get some money now, or the company folded and is never going to go to trial anyway.”

“I have not yet seen any case that has said the employer should get a break,” he says. “But that doesn’t mean it won’t happen. We’re still early on, right?”