In Dawe v. The Equitable Life Insurance Company of Canada, the Ontario Court of Appeal held that, absent exceptional circumstances, the presumptive ceiling for reasonable notice is 24 months.
In Dawe, the plaintiff was a Senior Vice President of an insurance company and was terminated after 37 years of employment without cause, following a minor dispute relating to the purchase and use of promotional sporting event tickets. As a result, the plaintiff sued his employer for wrongful dismissal.
Both the plaintiff and his employer moved for partial summary judgment on two issues: (1) the calculation of the proper notice period, and (2) the plaintiff’s entitlement to his employer’s bonus plan, at para 4.
The plaintiff was successful on the motion for partial summary judgment and the motion judge determined that 30 months was the appropriate notice period and that the plaintiff was entitled to his bonus during this period.
In rendering this decision, the motion judge noted that given the plaintiff’s advanced age and the lack of comparable employment opportunities available to him, “…this case warranted a minimum 36 month notice period”; however, the motion judge ultimately accepted the plaintiff’s position that he was entitled to 30 months, at paras 36-37.
In ruling that the plaintiff was only entitled to reasonable notice of 24 months, the Ontario Court of Appeal reaffirmed that: the determination of what constitutes reasonable notice is “case-specific” and, while there is “no absolute upper limit or ‘cap’ on what constitutes reasonable notice, generally only exceptional circumstances will support a base notice period in excess of 24 months, at para 31.
In determining the plaintiff’s entitlement to his bonus, the Ontario Court of Appeal held that the bonus plan was not discretionary, but rather, it was an integral part of the plaintiff’s executive compensation plan, at para 50.
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