Illness or Disability During the Notice Period
It is settled law that an employee who is wrongfully terminated is entitled to “reasonable notice” which can be working notice or compensation in lieu of notice. Determining the notice period depends on a variety of factors including age, length of service, and certain characteristics of the job. Further, the wrongfully terminated employee faces a “duty to mitigate” (or duty to minimize) her damages by actively seeking alternate employment.
Interestingly, the events following termination of employment do not affect an employee’s entitlement to notice. This includes the situation where an employee is terminated and shortly thereafter becomes ill or disabled.
Our courts have dealt with this situation by suggesting a longer notice period may be warranted because the employee may find it more difficult to find alternate employment.
With respect to the duty to mitigate, an ill or disabled employee is generally entitled to wait until they have recovered before starting a job search. In one case, an employee who became seriously ill during the notice period stopped looking for work to focus on her health. The Court held that she had met her duty to mitigate and that there was no duty to continue trying to mitigate once she became ill.
In the end employers may face a greater obligation for notice or severance pay for an employee who becomes unable to work or look for work after her termination. One way of reducing exposure to this risk is by the use of an employment agreement or by negotiating a settlement with the employee before or upon termination of employment.