How Does Age Affect My Severance Pay?

How Does Age Affect My Severance Pay?

By David Ertl, LL.B. – Employment Lawyer

Apart from length of service, your age at the time of termination is the most important factor in determining how much common law severance pay you are entitled to.  Generally, the amount of severance pay is measure in “months” (called a “notice period”).

How does age matter? For the most part, the older you are at the age of termination, the more weight will likely be given to your age as a factor in considering your notice period. The basic rationale is that the older you get, the more difficult time you will have in finding re-employment.

Basically, it comes down to ageism. Employers believe older workers are more expensive, aren’t tech savvy, will have more absences, health issues, and a shorter work-life compared to their counterparts. Sadly, I know that for many of my older clients, termination can mean a forced retirement.

Severance Pay at Age 30 – 40

In the world of employment law, when you reach your late thirties to early forties, courts will certainly acknowledge your age as a consideration in determination your notice period. Indeed, one court took notice that a 37-year-old employee was “young enough to start a career with a new company, but at the same time disadvantaged as compared to a person at the beginning of his working years”: White v. B.C. Timber Ltd. (1983), 3 C.C.E.L. 284 (B.C. S.C.).

In another case, the court recognized that a 40-year-old employee had difficulty competing against younger employees, and therefore his age was a relevant factor: Mulcahy v. Sony of Canada Ltd.(1988), 22 C.C.E.L. 13, 10 A.C.W.S. (3d) 429 (B.C. Co. Ct.).

Severance Pay at Age 45

When you hit age 45, that is thought to be an important threshold.

As the Supreme Court of Canada stated in Law v. Canada (Minister of Employment and Immigration) (1999), 170 D.L.R. (4th) 1, [1999] 1 S.C.R. 497, 43 C.C.E.L. (2d) 49(S.C.C.), at para. 101:

“. . . the increasing difficulty with which one can find and maintain employment as one grows older is a matter of which a court may appropriately take judicial notice. Indeed, this Court has often recognized age as a factor in the context of labour force attachment and detachment. For example, writing for the majority in McKinney, supra, La Forest J. stated as follows, at p. 299: “Barring specific skills, it is generally known that persons over 45 have more difficulty finding work than others. They do not have the flexibility of the young, a disadvantage often accentuated by the fact that the latter are frequently more recently trained in the more modern skills.”

One court described the circumstances of a 48-year-old in the following way (Trudeau-Linley v. Plummer Memorial Public Hospital (1993), 1 C.C.E.L. (2d) 114, 43 A.C.W.S. (3d) 81 (Ont. Ct. (Gen. Div.)), at p. 124:

“At termination, the plaintiff was 46 years of age. She is now 48. While she may have considerable life expectancy in gross terms, her working life must be considered well along. This is especially so in a community where the evidence demonstrates a depressed and shrinking health care industry and where opportunities are demonstrably limited. A 48-year old person seeking new employment in such an environment faces a bleak challenge in spite of attempts to mitigate age discrimination.”

In Maclean v. CAE Newnes Ltd. 2001 BCSC 1515, a 48-year-old Librarian with just 16 months of service was awarded 6 months of notice.

Severance Pay at Age 50 – 60

When you hit 50, notice periods start to rise dramatically, even with employees with short service.

In Barakett v. Levesque Beaubien Geoffrion (2001), 8 C.C.E.L. (3d) 96 (N.S.S.C.), a 50-year-old preferred share specialist with just 4 years of service was awarded 17 months of notice.

In Teitelbaum v. Global Travel Holdings Ltd. (1999), 41 C.C.E.L. (2d) 275 (Ont. Ct. (Gen Div.)) (1992), 42 C.C.E.L. 290 (B.C.S.C.), a 52-year-old computer science employee with 2.5 years of service was awarded 7 months of notice.

In Dhatt v. Kal Tire Ltd., 2015 BCSC 117 (B.C.S.C.), a 53-year-old mechanic with 23 years of service was awarded 21 months of notice.

In Peterko v. Centric Health Corporation, 2019 CarswellOnt 4224, 2019 ONSC 1068, 303 A.C.W.S. (3d) 547, 53 C.C.E.L. (4th) 312, a 53-year-old pharmacist with 16 years’ service was awarded 18 months of notice.

In Goebel v. Jardine Rolfe Ltd. (1992), 42 C.C.E.L. 290 (B.C.S.C.), a 53-year-old employee with just 9 months of service was awarded 5 months of notice.

In Kordish v. Innotech Multimedia Corp. (1998), 26 C.C.E.L. (2d) 318 (Ont. Ct. (Gen. Div)), a 53-year old employee with just 11 months of service was awarded 5 months of notice.

In Mikelsteins v. Morrison, 2018 ONSC 6952, the court awarded a 57-year-old with long service, a 26-month notice period, noting: “Given his age and limited work experience with one company, his ability to secure comparable work will be affected”.

In Drysdale v. Panasonic Canada Inc. 2015 CarswellOnt 18495, 2015 ONSC 6878, [2015] O.J. No. 6324, 261 A.C.W.S. (3d) 616, a 58-year-old, warehouse employee was awarded 22 months of notice.

Severance Pay at Age 60 +

At age 60 and above, the courts acknowledge the likelihood of “extremely stiff competition with younger workers” made worse, perhaps, by prospective employers’ perception that the employee might retire.

In Ozorio v. Canadian Hearing Society (2016), Justice O’Marra stated the following with respect to a 60-year-old plaintiff:

“Further, age is an impediment. In Hussain v. Suzuki Canada Ltd., [2011] O.J. No. 6355 (Ont. S.C.J.), L.B. Roberts J. observed that a plaintiff in his 60s would undoubtedly face “extremely stiff competition with much younger applicants for the same kind of employment”. Such a plaintiff would be significantly disadvantaged because of his age when competing with younger employees. Similarly, in Leeming v. IBM Canada Ltd., [2015] O.J. No. 1020 (Ont. S.C.J.), Perell J. noted that the plaintiff who was 60 years of age did not have particularly bright prospects for reemployment “competing with younger, more recently trained and less likely expensive talent”.

In Ellerbeck v. KVI Reconnect Ventures Inc., 2013 C.L.L.C. 210-045, 2013 BCSC 1253, 2013 CarswellBC 2136, 27 D.E.L.D. 150, 230 A.C.W.S. (3d) 734 (B.C. S.C.), a 60 year employee with only 3.5 years of service was awarded 10 months’ notice given that she did not wish to retire but yet faced greater barriers because of her age.

In Barton v. Rona Ontario Inc. (2012), 1 C.C.E.L. (4th) 32 (Ont. S.C.J.), a 64-year-old assistant manager with 3.67 years of service was awarded 10 months of notice.

In McNeil v. Presstran Industries (1992), 45 C.C.E.L. (2d) 78 (Ont. C.A.), a 64-year old comptroller with 5 years of service was awarded 12 months of notice.

In Systad v. Ray-Mont Logistics Canada Inc. (2011), 94 C.C.E.L. (3d) 175 (B.S.C.S.), a 65-year-old truck driver with 18 years of service was awarded 18 months of notice.

In Merritt v. Tigercat Industries Inc., 2016 ONSC 1214, a 66-year old general labourer was awarded 10 months of notice. The judge said the following:

“Mr. Merritt was 66 years of age at the time of termination. He was employed as a labourer for twelve years and five months. Given his age, employment skills and the economy, it is highly unlikely Mr. Merritt will obtain similar employment. This is of particular importance given his former salary of $50,000, a higher rate of remuneration for a labourer.”

In Patterson v. IBM Canada Ltd., 2017 CarswellOnt 2625, 2017 ONSC 1264, [2017] O.J. No. 888, 277 A.C.W.S. (3d) 104, the court said the following about a 67-year-old employee:

“Mr. Patterson was 67 years of age at the time of the termination of his employment. He therefore began work at IBM at the age of 45. I can take it from his current age that he may find it more difficult than a younger man to find a new position. While Mr. Patterson has evinced no desire to retire at this time, prospective employers may reasonably expect that he is closer to doing so than a younger candidate applying for the same job. All things being equal, Mr. Patterson’s age would tend to argue for a longer rather than a shorter notice period.”

We Can Help You – Get A Better Severance Package

If you’ve been terminated, and you are over age 45, you could have significant entitlements, whether your service is long or short. It is vital that you speak with an employer lawyer who knows the impact of age on your severance pay entitlements. In the vast majority of matters, we are able to negotiate much improved severance package without even filing a legal claim.

In some cases, we’ve had to go to court to get fair severance:

For example, in Drysdale v. Panasonic Canada Inc. 2015 CarswellOnt 18495, 2015 ONSC 6878, [2015] O.J. No. 6324, 261 A.C.W.S. (3d) 616, we got Mr. Drysdale (a 58-year-old, warehouse employee) 22 months of notice.

In Patterson v. IBM Canada Ltd., 2017 CarswellOnt 2625, 2017 ONSC 1264, [2017] O.J. No. 888, 277 A.C.W.S. (3d) 104, we got our client, a 67-year-old, employee 18 months of notice.

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