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Terminating Long Term Employees: Liability for Principal Dentists

By January 15, 2014June 27th, 2023Employment Law

Liability for terminating long-term staff

Here’s the situation: you are a principal dentist with a long-term staff member.  Most likely, it’s your receptionist.  Maybe you purchased a dental practice and assumed the liability associated with that person.  Or maybe you set up shop 20 or 30 years ago and your staff member has been with you throughout.  Recently, however, you’re thinking of selling your practice and need to terminate your staff.  OR perhaps you simply want to let him or her go because they’re not as productive or are creating issues in the workplace.

The question becomes: how should you go about terminating this staff?  We generally recommend that you avoid ‘just cause’ terminations unless they are warranted (i.e. well documented hand in the cookie jar type stuff).  The reason being that this could expose you to litigation where it becomes a ‘he-said / she-said’ affair and all of your dirty laundry is aired in open court.

So what about giving notice?  And more specifically, how much notice do you need to provide long-term employees?  Well, typically, it is believed that, at common law, the principal dentist needs to provide one (1) month of notice for every year the employee has worked for them.  This is the starting point and a general guide.  But there are things which can increase or decrease this amount.  For example, the employee – after receiving notice – is required to mitigate their damages by seeking employment elsewhere.  But things which tend to increase the amount of notice include things like the employee’s age, their ability to find work elsewhere, etc.

And, for a while in Ontario, it was thought that the upper limit of notice was 24 months.  That was, until the 2011 decision of Hussain v. Suzuki Canada Ltd. [2011] O.J. No. 6355.  In that case, Syed Hussain had worked for Suzuki Canada for 36 years and was almost 65 years old when he was terminated without cause.  He held many different positions (e.g. assistant warehouse supervisor), which was a very important and valuable job.  His job with Suzuki was full time and he had only worked there since coming to Canada in 1974.  Suzuki decided to terminate his job as a result of restructuring due to economic issues.  It tried to give him 9 months’ worth of notice.  Hussain sued.

At trial, the Ontario Superior Court of Justice had to determine how much notice Hussain was entitled to.  With respect to the commonly believed limit of 24 months, the Court held that: ”

4 While there is no cap on the amount of reasonable notice of employment termination to which an employee may be entitled, and each case must be considered on its own particular circumstances, 24 months is usually the higher end of the range unless generally there are exceptional circumstances: Di Tomaso v. Crown Metal Packaging Canada LP, 2011 ONCA 469 (Ont. C.A.), at para. 11.

5 In my view, while each factor on its own may not be exceptional, the combination of all of the above factors amount to the kind of exceptional circumstances that warrant a 26 month notice period [emphasis added]

WOW!  26 months!  So say goodbye to the 24 month limit in certain situations.  This case shows that courts will go beyond this upper limit because of the employee’s age and long-standing service, and inability to find replacement work.  The Court rejected Suzuki’s argument that Hussain should have immediately started to apply for work elsewhere; Hussain was entitled to a reasonable period of time to get over the shock of having been terminated from employment after so many years, at his age, and without notice, cause or pay.  Indeed, Hussain applied for 27 positions and landed one unsuccessful telephone interview.  The Court sympathized with Hussain and noted that Hussain had a 1% chance of re-employment.  As such, the court made no reduction to the 26-month notice period given the “specific and exceptional circumstances of this case”.

Lessons to be learned?  Well, if you have a long-term staff, don’t think you’re immune to being sued if you don’t provide adequate notice.  And if that staff is older and unlikely to be re-employed elsewhere, circumstances may be “exceptional” and thus warrant a greater amount of notice than 24 months!  You’ve been warned 😉

The Content of this post is provided for informational purposes only. It is not intended to be legal, financial, tax, or other professional advice of any kind. You are advised to contact DMC (or other counsel) to seek specific legal advice concerning your individual situation.