But, we just met

On February 14, 2025, the Ontario Superior Court released its decision in Miller v. Alaya Care Inc., 2025 ONSC 1028, which reminds employers that short service employees can receive significant common law notice awards. In this case, the Court awarded a 14-month notice period to a 6-month employee, which is notably longer than the duration of the employee’s employment; however the Court’s finding appears largely motivated by the fact that the individual had been induced from previous long term employment.

The key issues for the Court on this summary judgment motion were:

1. Whether the plaintiff was entitled to reasonable notice under the common law or the notice specified in her employment agreement; and
2. The enforceability of the termination clauses in the employment agreement and offer letter, particularly in relation to whether they violated the Employment Standards Act, 2000 (the “ESA”).

The Court examined the common law presumption that an employee dismissed without cause is entitled to reasonable notice unless a contract clearly specifies otherwise. The Court then cited the history of cases which establish that the parties cannot contract out of minimum employment standards under the ESA, and if any part of a termination clause in an employment agreement violates the ESA, then the entire termination clause in the employment agreement is unenforceable. Based on the foregoing, the Court found that:

1. The termination clauses in the employment agreement violated the ESA, rendering it unenforceable;
2. The offer letter, which provided for a minimum of four (4) months' salary upon termination without cause, similarly did not limit the plaintiff’s entitlement to common law notice; and
3. The plaintiff was entitled to reasonable notice, taking into account her previous employment, age, and the inducement to leave her former employer.

Typically, the common law notice period is influenced by several factors, including the employee's age, length of service, position, and the circumstances surrounding the termination. In this case, despite the plaintiff’s relatively short tenure of six months, her age and previous experience were significant factors in the Court's decision. The Court recognized that older employees or those with specialized skills may face greater challenges in securing new employment, which can justify a longer notice period. Additionally, the Court took into account the fact that the plaintiff had been induced to leave her previous position, which further supported the need for a more extended notice period to provide her with adequate time to find new employment. Based on the foregoing, the Court awarded a 14-month notice period, which included lost salary, benefits, bonuses, and the value of the RSUs that would have vested during the notice period.

This case serves as a critical reminder for employers about the importance of drafting clear and enforceable termination clauses in employment agreements. It highlights the potential consequences of failing to comply with the ESA and the need for employers to consider the broader implications of their termination practices. The ruling also reinforces the notion that the common law notice period is not strictly tied to the length of employment, but rather, it considers a range of factors that reflect the individual circumstances of each case, including those where an employee is induced to leave long term employment