In its recent decision in Marazzato v Dell Canada Inc. [Marazzato], the Ontario Superior Court of Justice (the “Court”) confirmed that the onus is on an employee to prove that the pandemic negatively impacted their ability to re-employ if they seek a longer notice period as a result of the pandemic. Marazzato is the latest in a series of court decisions to provide guidance on the impact of COVID-19 pandemic on the common law assessment of reasonable notice periods.
Dell Canada Inc. (“Dell”) terminated Dan Marazzato’s employment on a without cause basis on March 4, 2020. Notably, Mr. Marazzato’s employment was terminated approximately two weeks before Ontario declared its first state of emergency in relation to the COVID-19 pandemic.
Mr. Marazzato brought an action for wrongful dismissal. As Mr. Marazzato’s employment agreement did not contain a valid termination clause limiting his termination entitlements, he was entitled to common law reasonable notice of termination, which courts determine based on factors such as the employee’s age, length of service, and character of their employment, as well as the availability of comparable positions within the job market.
At the time of termination, Mr. Marazzato was 59 years old and had been employed at Dell for approximately 14 years. He was most recently employed as a Senior Manager Director Sales, and in his last three years of employment he earned an average of approximately $465,000 per year.
Based on these factors, Mr. Marazzato argued that he was entitled to damages representing 20 months of notice, while Dell argued that 16 months of notice was more appropriate. In particular, Mr. Marazzato submitted that the increased difficulty of obtaining comparable employment during the pandemic favoured the award of a longer notice period.
The Court ultimately awarded Mr. Marazzato damages representing 18 months of notice. In determining Mr. Marazzato’s reasonable notice period, the Court found that his age, the responsibilities and managerial nature of his role, and his high income level favoured a longer notice period.
In considering the availability of comparable positions within the job market and this factor’s impact on the calculation of the reasonable notice period, the Court declined to give weight to the COVID-19 pandemic. The Court noted that the employee had not put forth evidence to support his submission that the pandemic had negatively affected his ability to re-employ, and found that it would “not be appropriate to speculate on that submission without evidence”. Further, the Court observed that while many businesses experienced an economic downturn resulting from the pandemic, the employee’s skill set in the computer industry may have actually grown in demand during the pandemic because of the greater use of computers for access to the internet and remote practices. As a result, the Court concluded that this factor did not favour a longer notice period.
Takeaways for Employers
The Court’s decision in Marazzato continues the trend of employer-friendly decisions regarding the impact of the COVID-19 pandemic on reasonable notice periods and damage awards. Marazzato is consistent with recent decisions from the Court which suggest that the pandemic’s larger economic impacts will not serve to automatically increase an employee’s notice period (for more information on these decisions, please see our previous blogs on Yee v Hudson’s Bay Company here, and Iriotakis v Peninsula Employment Services Limited here).
Importantly, Marazzato makes it clear that the pandemic’s impact on the availability of comparable employment will be assessed on a case-by-case basis, and dismissed employees cannot rely on the pandemic’s larger economic effects to receive an extended notice period. Rather, the onus is on dismissed employees to adduce evidence of how the pandemic has impacted their own job search.
Conversely, employers facing a claim for a pandemic-related “bump” to a former employee’s notice period should be prepared to demonstrate that the employee has maintained strong re-employment prospects. As the Court in Marazzato noted, demand for jobs within certain industries may not have been as adversely impacted or may have grown during the pandemic. Consequently, an employee with a skill set oriented towards or transferable to those industries will likely be unable to rely on the pandemic to argue for an increase to their notice period.
This blog is provided as an information service and summary of workplace legal issues.
This information is not intended as legal advice.