Working notice invalid if you work past the notice period: Courts

Oostlander v. Cervus Equipment Corporation

In the case of Oostlander v. Cervus Equipment Corporation, the Alberta Court of Queen’s Bench confirmed that when a terminated employee continues working past the end of their working notice period, the period of working notice is no longer valid.

Overview of the Case

In this case, 60-year-old Mr. Oostlander worked for his employer, Cervus Equipment Corporation, for 36 years as a heavy-duty mechanic. Oostlander was employed at the company’s Bassano, Alberta location.

In 2018, the employer made the decision to close the servicing arm of their Bassano location and convert it into a retail branch. In May of that year, Cervus gave Oostlander a termination letter stating that his employment would end 16 months later, on September 11, 2019, which was the time the employer anticipated it would be ready to close the servicing division.

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Employee rights when a company closes

Near the end of the 16 month working notice period, Oostlander inquired about the status of his termination notice, as it did not appear that the Bassano location would be closing by the original timeline. The employer confirmed that this was indeed the case, and Oostlander continued working past his original termination date of September 11, 2019, until June 3, 2020.

On June 3, 2020, relying on the previous working notice of 16 months, the employer gave Oostlander 1 month’s notice of termination (instead of severance pay); his employment would then come to an end on July 3. When the employee objected to this, the employer offered a job in Brooks, doing the same work for the same rate of pay. Oostlander refused the offer, and sued for wrongful dismissal, seeking severance in the amount of 24 months of wages and benefits.

The Court’s Decision

The court disagreed with the employer’s argument that the original 16 months of working notice should count towards whatever severance the employee was owed.  Specifically, the court noted that where an employee works past the end of the notice period, the notice period no longer counts. The court also decided that for working notice to be effective, it must be specific, unequivocal, and clearly communicated to the employee. Because Oostlander continued working past the original termination date, his working notice period became uncertain in duration, and was no longer effective “notice.”

In other words, the court found that the function of proper “notice” is to provide certainty to the employee so that they can plan for the termination, and start looking for new work. The employer’s decision to change the original termination date created an unspecified and uncertain notice period on which the employer could not rely. The court sided with Oostlander, awarding him 24 months’ notice, with deductions made for mitigation income and CERB earned during the notice period.

Takeaway for Employees

Notice period doesn’t count if you continue working

If an employer requires an employee to work past the end of the working notice, the employer can’t rely on the period prior to that date as reasonable notice of termination.

CERB can be deducted

CERB payments may be deductible from severance awards.

Takeaway for Employers

Be specific when providing notice

When providing working notice of termination, the duration of the notice period must be specific and unequivocal, and clearly communicated to the employee.

Don’t let someone work beyond their notice period

Allowing an employee to work past the end date of working notice can create significant liability for an employer in the form of significant severance awards.