By Barry W. Kwasniewski and Martin U. Wissmath

Long Service Employee Awarded 24 Months’ Notice in Key Decision on Termination

In Maximenko v. Zim Integrated Shipping Services (Canada) Co. Ltd., a decision released on October 10, 2024, the Ontario Superior Court ordered the defendant (the “Employer”) to pay the plaintiff , a long-service employee (the “Employee”), 24 months’ pay in lieu of reasonable notice, which amounted to more than $320K. The Employer argued that the reasonable notice period should have been 18–20 months. The case demonstrates the approach to determining reasonable notice periods according to the common law in the absence of an employment contract, particularly for older employees with long periods of service, and outlines the scope of an employer's obligations when calculating compensation during the notice period.

The judgment also addresses contentious issues, such as mitigation of damages, pension entitlements, and bonus calculations. Employers in the charities and not-for-profit sector, especially with long-serving employees, should take note of the court’s reasoning and be proactive about their obligations to minimize potential liabilities. This decision serves as a timely reminder of the importance of having valid and enforceable employment contracts with carefully drafted termination clauses, considering appropriate termination packages, and ensuring clear documentation of all components of employee compensation.

The Employee worked for 20 years and 10 months, from May 2002 until her employment was terminated in March 2023. From November 2006 until February 2022 she worked as the General Manager in Toronto and was responsible for 20 employees. The court emphasized that the absence of a written employment agreement, combined with the Employee’s 20 years and 10 months of service and her senior managerial role, justified the significant 24-month notice period. The court noted that the Employee’s age, just shy of 59, and the niche nature of the ocean freight industry posed significant challenges to securing comparable employment, supporting a lengthy notice period under the principles outlined in Bardal v. Globe & Mail Ltd.

The court also rejected the Employer’s argument that the Employee failed to mitigate her damages. Despite inconsistencies in her evidence, the court found her efforts — applying to over 70 positions — were reasonable. It was particularly noted that many of the Employer’s suggested opportunities were unsuitable or unavailable, and the Employer could not establish that further efforts would have yielded employment. The court also considered the personal challenges the Employee faced during the mitigation period, including her mother’s illness and passing, which temporarily impacted her job search. Ultimately, the court affirmed that the Employer failed to meet its burden of proving inadequate mitigation efforts, entitling the Employee to the full 24 months’ notice. The total sum was $320,746.60, including base salary, plus bonuses, car allowance, and pension benefit. This case reaffirms the importance of considering all the legal circumstances of the employee, including age, length of service, role seniority, and the realistic availability of similar employment, when assessing reasonable notice and mitigation obligations.

More Amendments to Ontario Employment Laws to Improve Worker Protections

Further legislative changes in Ontario to employment standards aim to improve worker protections, fairness, and workplace conditions. Bill 190, the Working for Workers Five Act, 2024 — the 5^th in a series of statutes with the “Working for Workers” title — received Royal Assent on October 28, 2024 (the “Act”). An announcement by the provincial government noted significant measures, including a reduction of the required service duration for firefighters, fire investigators, and volunteers to qualify for presumptive Workplace Safety Insurance Board (WSIB) coverage for primary-site skin cancer from 20 to 10 years, while extending occupational cancer, heart injury, and post-traumatic stress disorder (PTSD) coverage to wildland firefighters and investigators, aligning their benefits with municipal firefighters. Definitions of “workplace harassment” and “workplace sexual harassment” in the Occupational Health and Safety Act (OHSA) have been amended to include online behaviour and electronic communications.

The Act amends the OHSA requiring all workplaces to maintain clean washrooms with documented cleaning records. It also amends the Employment Standards Act, 2000 (ESA) to enhance job transparency and fairness by obliging employers to disclose publicly advertised job vacancies and respond to interviewees within a set timeframe.

Maximum fines for breaches of the ESA have been increased to crack down on non-compliant employers. Additionally, the Act eliminates the requirement for sick notes to access the three job-protected annual unpaid sick-leave days. The following lists some of the legislative changes of particular interest for charities and not-for-profits and whether they are in force:

• ESA amendments not yet proclaimed into force:
  • New section 8.5 of the ESA requires employers to state whether an advertised job posting is for an existing vacancy or not;
  • Records of information prescribed by regulation under new section 8.6 for publicly advertised jobs must be retained for 3 years;
    • Definitions of what constitutes an “interview” and “compensation” for a publicly advertised job can be prescribed by regulation-making authorities under subsection 141 (1).
• ESA amendments now in force:
  • Section 50 of the ESA is amended so that employers retain the right to require evidence of entitlement to sick leave but are not permitted to require a certificate from a qualified health practitioner;
  • Section 132 of the ESA, which sets out the fines applicable for convictions under the ESA, is amended to increase the maximum fine for an individual to $100,000.
• OHSA amendments now in force:
  • The definition of “workplace harassment” in subsection 1 (1) of the OHSA is amended by adding “including virtually through the use of information and communications technology” after “workplace”;
  • The definition of “workplace sexual harassment” is amended by adding “including virtually through the use of information and communications technology” after “workplace”.
• OHSA amendments not yet proclaimed into force:
  • New section 25.3 requires employers to “ensure that the washroom facilities, if any, that are provided by the employer for the use of workers are maintained in a clean and sanitary condition.”
    • Employers are required to “keep, maintain and make available records of the cleaning of washroom facilities as prescribed.”

Keeping up to date with these legislative changes is important for charities and not-for-profits to maintain compliance with workplace standards.

​Read the November 2024 Charity & NFP Law Update