Kara Sears
Common law notice and statutory notice are two distinct types of notice that employers are required to provide to employees upon termination. Statutory notice is the minimum amount of notice mandated by employment standards legislation and is typically based on an employee's length of service. On the other hand, common law notice, also known as reasonable notice, is judge-made law that considers factors such as the employee's length of service, availability of equivalent employment, age, and personal circumstances. While statutory notice sets a baseline, common law notice often provides for a longer notice period and greater entitlements for employees.
| Characteristics | Values |
|---|---|
| Statutory notice | Minimum notice period |
| Common law notice | Notice period based on factors like length of service, age, position, and labour market conditions |
| Statutory notice application | Fixed-term contracts |
| Common law notice application | Non-fixed term contracts |
| Statutory notice calculation | Based on length of service |
| Common law notice calculation | Based on factors to estimate time needed to find comparable employment |
| Statutory notice entitlements | Minimum entitlements |
| Common law notice entitlements | Includes statutory entitlements but provides more notice or severance |
| Statutory notice payment | Required in all circumstances except when a lay-off does not result in termination |
| Common law notice payment | Required when an employee is terminated without cause |
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What You'll Learn
- Common law notice is based on length of service, age, position, labour market conditions, etc
- Statutory notice is the minimum amount of notice that must be given to employees
- Common law notice is also called reasonable notice, severance, and termination pay
- Employees with fixed-term contracts are not entitled to statutory notice
- Common law notice is determined by analyzing previous judges' decisions
Common law notice is based on length of service, age, position, labour market conditions, etc
Statutory notice and common law notice are two different things. The former is based on employment standards legislation, while the latter is based on established legal principles developed through court decisions and precedents. Common law notice, also called "reasonable notice", is the amount of time an employer owes an employee in warning them about their termination. This is based on several factors, including length of service, age, position, and labour market conditions.
The history of common law dates back to the 1800s in Britain when agricultural employers wanted to ensure they had enough labour to complete the harvest. A one-year contract helped employers ensure they had employees and helped employees ensure they had a steady income. Over time, this practice of one-year contracts was replaced with employees being hired on indefinite employment contracts, or contracts with no set end date. Most employees in Canada today are on indefinite employment contracts.
In Ontario, the Ontario High Court of Justice set out the criteria for determining the appropriate calculation for common law notice in the case of Bardal v. The Globe & Mail Ltd. in 1960. The case established that each case needed to be addressed individually, with factors such as length of employment, the employee's age, character of employment, and availability of similar employment in regard to the training and qualification of the employee.
Common law notice is assessed by considering the employee's length of service, availability of equivalent employment, relevant education, training, experience, age, and any other personal characteristics or circumstances a trier of fact may deem relevant. Generally, the longer an employee has been with a company, the longer the reasonable notice period they are entitled to. Older employees, especially those with longer service, may require more time to find new employment due to potential age-related discrimination in the job market. Position and seniority are also considered—higher-level employees with greater responsibilities and influence within the organisation may be entitled to a longer notice period.
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Statutory notice is the minimum amount of notice that must be given to employees
In a non-unionised workplace, an employer can end a contract with an employee for any reason, as long as it is not in breach of contract or law. In these cases, employers must provide reasonable notice of termination. This can be working notice, pay in lieu of notice, or a combination of the two.
The minimum statutory notice is outlined in the Employment Standards Act, 2000 (ESA). However, common law reasonable notice includes the minimum entitlements under the ESA but often provides for more notice or severance. This is because the amount of statutory notice is based purely on an employee's length of service, whereas common law notice takes into account a wider range of factors, including age, position, and labour market conditions, to estimate how long it will take for an employee to find their next job.
Employees in fixed-term contracts are not entitled to statutory notice. However, if they do not have a termination clause in their contract, or the clause is ambiguous, they will be entitled to common law notice.
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Common law notice is also called reasonable notice, severance, and termination pay
Common law notice, also called reasonable notice, severance, and termination pay, is the notice or pay in lieu of notice that an employee is entitled to when they are let go from work. This is a judge-made rule that developed over 150 years ago in British courts. It is the opposite of "at-will" employment, which is the law in the United States, where employees are not entitled to any notice even if they are terminated without cause.
Common law notice is assessed based on factors such as the employee's length of service, availability of equivalent employment, relevant education, training, experience, age, and any other relevant circumstances. It is meant to give employees the time they need to find a new job. The amount of common law notice can range from a minimum of three months to a maximum of 24 months, depending on these factors, with an average award of one month per year of service.
Employees who are terminated without cause and do not receive sufficient notice or pay in lieu of notice may have a civil claim for wrongful dismissal. In such cases, they may need to sue their employer for their severance entitlements. It is important for employees to understand their legal rights and obligations regarding termination, and an employment lawyer can assist in this regard.
To summarise, common law notice, also referred to as reasonable notice, severance, and termination pay, provides employees with the time or compensation necessary to secure alternative employment following a termination without cause. It is a judge-made law that aims to protect employees by providing them with adequate notice or compensation during periods of job transition.
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Employees with fixed-term contracts are not entitled to statutory notice
Common law notice and statutory notice are two different types of notices that employers can give to employees. Common law notice is assessed by considering the employee's length of service, availability of equivalent employment, relevant education, training, experience, age, and any other personal characteristics or circumstances. On the other hand, statutory notice is the minimum notice that employees are entitled to by law.
Fixed-term contracts are a type of employment contract that has a set end date. Unlike employees hired on indefinite-term contracts, employees with fixed-term contracts are generally not entitled to statutory or common law reasonable notice of termination following the end of their employment term. This is because the fixed-term contract is considered to be a dismissal, and the employer does not have to give any notice. However, there are certain situations in which employees with fixed-term contracts may be entitled to statutory notice or pay in lieu of notice of termination. For example, in Ontario, if a fixed-term contract exceeds 12 months, ends before the end of the term, or is extended more than 90 days beyond the original term, the employee is entitled to statutory notice.
It is important to note that the courts in Canada require that the terms and conditions of fixed-term contracts are clear and unequivocal. Employers must ensure that employees understand that they are being hired for a fixed term and that they will not be entitled to statutory or common law notice of termination at the end of that term. Proper notice should be given if the employer wishes to dismiss the employee before the end of the fixed term.
In summary, employees with fixed-term contracts are generally not entitled to statutory or common law reasonable notice of termination following the end of their employment term. However, they may be entitled to statutory notice in certain situations, such as if their contract exceeds a certain length or is ended early. Employers must be careful to draft fixed-term contracts clearly and ensure that employees understand their terms.
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Common law notice is determined by analyzing previous judges' decisions
Common law notice, also known as "reasonable notice", "severance", and "termination pay", is the rule that an employee gets notice or pay in lieu of notice if they are dismissed from work without cause. This is a judge-made law, developed over a hundred and fifty years ago in the British courts. Common law notice is, therefore, the opposite of "at-will" employment, which is the law of the land in the United States, where an employee is not entitled to any notice even if they are terminated without cause.
The amount of notice could form the basis for a wrongful dismissal claim if it does not satisfy the definition of reasonable notice. An employee can bring a lawsuit for wrongful dismissal if an employer fails to provide reasonable notice of termination. This is based on the implied obligation in the employment contract to give reasonable notice of termination in the absence of just cause.
It is important to note that statutory notice is just a minimum, similar to minimum wage. It only applies if there is an agreement with the employer that the employee will only receive statutory notice upon termination. If there is no such agreement, then the employee is entitled to common law notice. Common law notice usually supplements an employee's statutory notice entitlement.
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Frequently asked questions
Common law notice, also known as "reasonable notice", “severance”, and "termination pay", is the rule that an employee gets notice or pay in lieu of notice if they are let go from work. This is based on a number of factors, including an employee's length of service, age, position, and labour market conditions.
Statutory notice is the minimum amount of notice that must be given to employees upon termination, as set out in the Employment Standards Act, 2000 (ESA). It is based solely on an employee's length of service.
If you did not sign an employment contract, your contract does not have a termination provision, or the provision is ambiguous, you are likely entitled to common law notice. Additionally, if your employment agreement does not limit you to your statutory minimums on termination or explicitly indicate what constitutes "reasonable notice", you may be entitled to common law notice.
Common law notice is determined by judges and precedent, whereas statutory notice is legislated by the government. Common law notice is often greater than an employee's statutory minimum entitlements and is based on a variety of factors, while statutory notice is a simple minimum based only on length of service.
