Legal Myths: Is a terminated employee guaranteed one month per year of service?

January 23, 2015 | Cole L. Lefebvre

Law is full of its share of misconceptions. For instance, many people talk about a “rule of thumb” that provides that a terminated employee is entitled to one month per year of employment. Despite this, Courts across Canada have emphatically rejected the notion that there is rule of thumb for determining appropriate notice periods for employees.

The starting point for determining what constitutes reasonable notice is the landmark decision of Bardal v Globe and Mail Ltd., (1960), 24 D.L.R. (2d) 140 (Ont. H.C.), which suggested the factors to be considered include, but are not limited to: character of employment, length of service, age of the employee, and the availability of similar employment in light of his expertise, training, and qualifications.

One of the earliest and most prolific rejections of the “rule of thumb” was by Justice Laskin in the Ontario Court of Appeal case Minott v O’Shanter Development Company Ltd., [1999] OJ No 5, where he found the rule of thumb suffers from several deficiencies; most unfavourable was that it de-emphasized the remaining Bardal factors. Thus, Justice Laskin notes, “in my opinion the rule of thumb approach is not warranted in principle, nor is it supported by authority.”

The Saskatchewan Court of Appeal in Capital Pontiac Buick Cadillac GMC Ltd v Coppola, 2013 SKCA 80, was equally dismissive. Justice Caldwell warned employers of the dangers of relying on the rule of thumb, stating:

Practically-speaking then, while employers may wish to use the “one month’s notice per year of service” rule of thumb as a guideline in their day-to-day decision-making given its apparent facility, they do so at their own peril because the rule is not supported by the jurisprudence and is inconsistent with Bardal.

Alberta courts have also rejected the formula. The court in Milsom v Corporate Computers Inc., 2003 ABQB 296, noted

It is clear from the case law that Courts cannot apply rules of thumb to set the length of notice required in an individual case: each contest between an employer and an employee deserves individual assessment in the circumstances of the specific case and in light of then current social policy demands.

So, while legal myths like this will continue to fester, it is important to remember that there is no formula or rule of thumb to determining reasonable notice for all type of employees. Each case must be viewed on an individual basis taking into account all relevant factors, not just length of service.


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