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Notice Not Always Proportionate to Service in Case of Short Service Employee

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A recent case involving the termination of a short service employee, illustrates a principle that is often difficult for employers to accept.  A terminated employee’s entitlement to reasonable notice may not always be proportionate to his or her notice.

The case in point is Gingerich v. Kobe Sportswear Inc. (unreported, January 25, 2008).  Here, Mr. Gingerich, who was 38 years old at the time of his termination and had worked for the employer for five months as a sales and marketing manager, was offered two weeks of severance at the time of his termination.  Mr. Gingerich claimed five months notice, based on, amongst other things, an inducement argument.

At trial, Justice Low rejected the inducement argument, but nevertheless awarded Gingerich two and half months of notice.   This case is consistent with others that provide short term employees with pay in lieu of notice that appears disproportionate to their service.  It is an important reminder that the “one month per year of service” rule of thumb that many employers still use, and has, incidentally been explicitly rejected by the Ontario Court of Appeal, often leads to the wrong result.  It may be in the interests of some organizations to terminate an employee shortly after their employment starts.  However, as this case illustrates, assuming that the notice obligations in these circumstances are negligible, is in error.

Janice Rubin