By: Junki Hong

‍

While the length of service is often associated with notice entitlement of a dismissed employee, with greater emphasis than other relevant factors, Canadian courts have recognized that short-service employees are often entitled to a proportionately longer period of notice. Carroll v. Oracle Canada ULC, 2025 ONSC 4889 (“Carroll”) is a recent example from Ontario.

‍

Court Decision

The Court in Carroll awarded 12 months’ notice to Mr. Carroll, who served for three years and seven months in the position of Global Strategic Client Executive for the employer, Oracle Canada ULC (“Oracle”). He was 61 years old at the time of termination. Mr. Carroll earned from Oracle $761,069.79 in 2022, $786,186.33 in 2021, and in 2023, between January 1, 2023 and his termination on June 30, 2023, earned $725,674.08.

‍

In coming to this determination, the Court considered the earnings of the employees of authorities cited by the parties, and how the salary level would affect the availability of a comparable position.

‍

The Court also noted that failing to provide a positive letter of reference was a factor that increases the length of an employee’s reasonable notice period. The letter that Oracle did provide was seen as a “letter that an employer would write for a mediocre or problematic employee in respect of whom an employer did not want to say anything proactively negative”.  Although Oracle maintained that it was company policy not to write letters of recommendation, the letter it did write does not indicate that company policy was not to write letters of recommendation.

‍

Mr. Carroll found alternative employment on February 28, 2024, eight months after his termination.  Nevertheless, the Court held that the appropriate notice period was 12 months.

‍

In ascertaining the monetary value of the 12 months notice, the Court used a three-year average for the commissions portion. The Court also awarded for benefits, a sum equal to 10% of the base salary.

‍

The Court also awarded $57,740.55, equal to the amount of the improperly withheld commissions, in punitive damages for the employer's bad faith conduct, including delays in paying statutory entitlements without any explanation for that failure, and for relying on a termination provision, when a similarly worded employment agreement involving another Oracle employee had been struck down as unenforceable.

‍

Takeaways

For your consideration:

‍

• Reference letter practices can backfire. While reference letters can mitigate legal risks, refusal to provide a reference is seen as impeding an employee's ability to mitigate their losses.
  ‍
• In assessing the notice, courts will weigh multiple factors—including the availability of a reference.
  ‍
• Statutory requirements, including commissions earned during the notice period, are not optional, and further, not leverage. They must be paid promptly.
  ‍
• The Court will note the history of the enforceability of termination clause. Oracle tried a similar contractual language in the past and did not succeed and was punished for trying to do so again knowing that it would fail.
  ‍
• When an employee occupies a senior, specialized, or high-earning role where the market for comparable positions is narrow, courts will look carefully at all the relevant factors.

‍

Note to Readers: This is not legal advice. If you are looking for legal advice in relation to a particular matter please contact one of our group members. We communicate all these updates to our clients and readers on our Employer Resources Portal and through monthly Newsletters.

‍