The Court of Appeal for Ontario's recent decision in Wood v. CTS of Canada Co., 2018 ONCA 758, clarified some important timing questions for employers regarding the delivery of statutory and common law notices in the context of mass terminations (i.e., 50 or more employees in a four-week period) and discussed the effect of excessive overtime during the notice period and lengthy temporary work after the termination date.
Section 58(1) of the Ontario Employment Standards Act (“ESA”) states that an employer must provide at least eight weeks’ notice of mass terminations (and up to 16 weeks’ notice depending on the number of employees impacted). The employer must also complete and file with the ESA Director a Form 1 - in which the employer must set out certain prescribed information - and post that form in the workplace. Under the ESA, the notice required under section 58(1) is deemed not to have been given until the Director receives the completed Form 1.
On April 17, 2014, the defendant CTS provided written notice to its employees that it would be closing its Streetsville plant and that their employment would terminate on March 27, 2015. It subsequently extended the termination date for most employees to June 26, 2015. CTS did not serve and post its Form 1 until May 12, 2015, that is, 12 days into the mandatory minimum eight-week statutory notice period and more than a year after it gave notice to its employees.
The Superior Court of Justice (erroneously) ruled that the advance notice of termination was invalid until the Form 1 was filed and posted in May 2015 – invalidating the 13 months of working notice CTS had previously provided.
On appeal, a unanimous three-judge panel of the Court of Appeal overturned the Superior Court’s ruling, stating that CTS was only required to serve and post its Form 1 at the beginning of May 2015, as required by the statute. Hence, the 13 months of notice was valid.
However, as the Form 1 was posted 12 days after the start of the statutory notice period, the Court of Appeal also ruled that the terminated employees were all entitled to an additional 12 days of statutory notice.
The case also dealt with the impact of excessive overtime hours during the working notice period. The Court of Appeal stated that overtime worked in violation of the ESA constituted an exceptional demand which cannot be considered consensual and therefore invalidated the working notice period.
Finally, the court affirmed that there is a 13-week limit on temporary work following the initial termination date set out in a notice of termination. If employees are provided temporary work after the initial termination date which exceeds that 13 weeks, a fresh notice of termination must be provided that contains a clear and unambiguous final termination date.
There are some important takeaways for employers arising from this ruling.
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