In a recent summary judgment decision, Nahum v Honeycomb Hospitality Inc. [Nahum], the Ontario Superior Court of Justice (the “Court”) awarded damages equal to five months of pay in lieu of notice to a 28-year-old employee with four and a half months of service—an unusually large award in the circumstances—after considering that she had been five months pregnant at the time of her dismissal.
The employee, Sarah Nahum, was dismissed without cause by her former employer, Honeycomb Hospitality Inc. (“Honeycomb”), in October 2019.
Ms. Nahum brought an action for wrongful dismissal. The parties agreed that the termination clause in Ms. Nahum’s employment agreement was not enforceable. As such, it was undisputed that Ms. Nahum was entitled to common law reasonable notice of termination, which courts typically determine based on factors including 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 dismissal, Ms. Nahum was 28 years old and had been employed for approximately four- and one-half months as a Director of People and Culture. Importantly, she was about five months pregnant at the time of her dismissal.
Based on these factors, Ms. Nahum claimed that she was entitled to eight months of reasonable notice. In particular, she argued that her pregnancy ought to be considered in determining the reasonable notice period, as it negatively impacted upon the availability of comparable work to her. Honeycomb responded that two months of notice was “generous”.
The Court ultimately awarded Ms. Nahum five months’ pay in lieu of reasonable notice. The Court balanced Ms. Nahum’s young age and very short length of service, which favoured a shorter notice period, with the competitive nature of the job market from which she sought to re-employ and the managerial nature of the role at Honeycomb, which tend to lengthen the notice period.
Notably, the parties agreed that the COVID-19 pandemic was not a factor in determining the notice period as Ms. Nahum’s dismissal pre-dated the pandemic.
The Court then considered whether Ms. Nahum’s pregnancy at the time of dismissal warranted the award of a longer notice period. The Court accepted, without requiring evidence, that “pregnant people face additional challenges when looking for work” because it deemed the idea to be a generally accepted fact among reasonable persons. The Court found that “objectively, a person’s pregnancy is likely to increase the amount of time it will take them to find new employment in most cases, because most employers want to fill a need in their organization with someone who will be present to fill that need”.
The Court noted that pregnancy should not function to automatically lengthen the notice period in all cases, and must be considered in the context of the specific circumstances. However, absent circumstances where an employee’s pregnancy may not actually impact upon the availability of comparable employment to them, the Court concluded that “there is no principled reason why, when determining the damages of a wrongfully dismissed employee, their pregnancy at the date of dismissal should not factor into the reasonable notice period when their pregnancy is reasonably likely to negatively impact their ability to find alternative employment”.
In Ms. Nahum’s case, the Court described her pregnancy as “an important factor” in its ultimate finding that she was entitled to five months’ notice.
Takeaways for Employers
Nahum provides important advice to employers on how to consider the impact of an employee’s pregnancy at the time of dismissal on the assessment of their reasonable notice period. As the Court in Nahum noted, pregnancy does not serve to automatically extend an employee’s notice period. Accordingly, employers should be on the lookout for circumstances where an employee’s pregnancy would not actually impede their job search. As examples, the employee may possess specialized, in demand skills such that they may reasonably expect to find an employer willing to accommodate their need for pregnancy and/or parental leave, or the employee may be searching for a job to commence in the future when they would no longer be pregnant.
Employers contemplating terminating the employment of a pregnant employee should also ensure that the dismissal does not constitute discrimination under the Ontario Human Rights Code. While it is legal to terminate the employment of a pregnant employee, employers cannot do so because of the pregnancy (even if it is only part of the reason). Even if an employee’s pregnancy has negatively impacted their work, an employer must take sufficient steps to properly accommodate that employee’s pregnancy-related limitations.
For employers, enforceable and comprehensive termination clauses remain the most reliable bulwarks against exposure to costly legal liabilities resulting from all manner of issues related to dismissal. Employers are therefore advised to ensure that their employment agreements, and particularly the termination clauses therein, are enforceable and clearly specify employees’ entitlements upon dismissal.
This blog is provided as an information service and summary of workplace legal issues.
This information is not intended as legal advice.