Beware of the One Month Per Year of Service "Rule"
Tuesday, May 31, 2016 - Filed in: Court Cases
We have written a number of times regarding cases that significantly depart from the so-called one month per year of service rule of thumb. Yet another case has illustrated the risk an employer runs in assuming their liability will be capped at one month per year of service.
In Ellerbeck v KVI Reconnect Ventures, 2013 BCSC 1253, the British Columbia Supreme Court concluded that an employee with 3.5 years of service was entitled to 10 months of notice. Ellerbeck, a certified management accountant, was employed as a corporate controller. She was dismissed the day before her 60th birthday and provided with 10.5 weeks of pay in lieu of notice. She brought an action for wrongful dismissal and took the position that she was entitled to 12 months of notice. The employer argued, among other things, that the Court should apply the rule of thumb of one month notice per year of service.
The Court found that Ellerbeck held a senior level management position and that, due to her age, she faced greater barriers in obtaining a similar position. Based on those factors and a review of the case law, the Court concluded that Ellerbeck was entitled to a notice period of ten months.
This case again affirms that courts are prepared to depart significantly from the purported one month per year of service "rule". The determination of the appropriate notice period is very contextual and there is no mathematical formula that can be applied to with certainty. Employers would be advised to obtain legal advice on the potential notice period that an employee could be awarded in order to assess the risks before dismissing an employee.
Note: This a reprint of an article by Alison Bird of Cox & Palmer.