Authors – Alan Riddell & Kyle Van Schie
Nahum v. Honeycomb Hospitality Inc., 2021 ONSC 1455
This past February, the Ontario Superior Court of Justice released a very important ruling that employers may now have to provide significantly more pay-in-lieu of notice to employees if those employees are already pregnant at the time that their employment is terminated.
In this particular case, the employer, Honeycomb Hospitality Inc., terminated the employment of Ms. Nahum without cause after she had been employed for only a very short period of time. In terminating her, Honeycomb provided her with a severance of package of two months of pay-in-lieu of notice – an amount that it believed was more than generous given her extremely brief, four and a half month, stint of service with the company.
At the time of her termination, Honeycomb was fully aware that Ms. Nahum was five months pregnant.
In court, the employee’s lawyers claimed that due to her pregnancy, she was entitled to far more than two months’ notice of termination. They argued that this was because many prospective employers would be reluctant to hire her once they realized that she would soon give birth and go off on leave.
The Superior Court accepted that argument and ordered Honeycomb to more than double Ms. Nahum’s notice period to five months. In so doing, the Court ordered Honeycomb to provide her with a notice period that, rather sensationally, was actually longer than the total cumulative period of time in which she had been employed at the company!
The Court’s reasoning was that to secure a new job, a pregnant employee usually needs more time than other terminated employees because prospective employers are often reluctant to hire anyone who appears likely to have to absent herself from her new job for an extended period of pregnancy leave, within only a matter of months of being hired. The Court concluded that since an employee’s pregnancy is therefore likely to significantly hinder her ability to rapidly secure new employment, she logically requires a significantly longer notice period than other similarly situated employees.
This new decision reverses the earlier decision of the Ontario Superior Court in Colburn v. Unity Savings and Credit Union Limited, [2001] O.J. No. 2920, in which the Court ruled that pregnancy was not a factor to be considered in determining the period of reasonable notice owed to a terminated employee.
Going forward into 2021 and 2022, Ontario employers whose employment contracts do not contain an up-to-date, and fully enforceable, termination clause, must ready themselves to pay much longer notice periods to employees who are already pregnant at the time of termination.
That said, employers can take comfort that the Court’s decision does not require them to grant longer notice periods to employees who don’t become pregnant until shortly after they have been terminated from their employment, during the notice period itself. That is because, as a matter of law, all events that occur after an employee’s date of termination are irrelevant to the calculation of her notice period.
