Fired while pregnant? You may be entitled to more severance

Nahum v. Honeycomb Hospitality Inc.

Ontario Superior Court has decided that pregnancy should be considered a factor in the amount of notice (severance pay) owed upon termination. In this case, the court found that a 28-year old employee with a service of 4.5 months was entitled to a five-month severance package.

Overview of the Case

At the time of the termination the employee had been working as a Director of People and Culture for 4.5 months. Ms. Nahum’s annual salary was $80,000 plus benefits.  She was terminated without cause when she was five months pregnant. Ms. Nahum believed she was entitled to eight months’ pay in severance. Her employer felt that severance should be no more than two months.

The Court’s Decision

When determining the appropriate amount of severance pay, the court considered four main factors. Known as the Bardal factors, these include:

• the type of employment;
• the length of service;
• the employee’s age; and
• the availability of similar employment.

An employer can provide reasonable notice to an employee in three ways: working notice (advance notice of a termination date), pay in lieu of notice (severance pay), or a combination of both.

The court remarked that pregnancy may create difficulties for a person searching for employment. This is because most organizations generally seek to hire someone who would be available to start in the immediate future.

The court concluded that pregnancy was an important factor in assessing the reasonable notice period. Five months of severance pay was awarded.

READ MORE
• Maternity Leave in Ontario: Essential Guide for Employees
• Employment Law Show: What you need to know about Maternity Leave

Lessons for employees

Our courts recognize pregnancy as a relevant factor when determining the length of the notice period. However, pregnancy will not automatically increase a severance package in every case. The court did acknowledge that pregnancy poses additional challenges to job seekers. Therefore, if terminated while pregnant, more severance may be appropriate.

Lessons for employers

Pregnancy can impact severance amount

Employers should take note that courts will consider an employee’s pregnancy at the date of the dismissal. The amount of severance will increase since pregnancy will likely hinder the employee’s ability to find alternative employment.

Don’t fire employee because of pregnancy

If the employer’s decision to terminate the employee was because of her pregnancy, they could be liable for breaches of the Human Rights Code. In such a situation, there may be cause to award additional damages for discrimination.

WATCH: Employment lawyer Lior Samfiru, partner at Samfiru Tumarkin LLP, discusses the rights of parents on maternity or paternity leave on an episode of the Employment Law Show.