Exceptional Circumstances (Above 24 Months)

General Principles

The Ontario Court of Appeal has held that a base notice period exceeding 24 months will generally only be awarded where “exceptional circumstances” exist.¹

The following passage from one Alberta decision provides a helpful illustration of the circumstances that will typically constitute exceptional circumstances:

“Exceptional circumstances” usually arise where an individual begins working for a company as a young adult and is terminated near potential retirement age, after becoming a key or highly specialized employee. The employee, upon termination, is in a situation where their prospects of obtaining similar and comparable employment are significantly limited based on factors specific to their singular employment, such that they have effectively been “forced into retirement.”²

The traditional 24-month cap applies only to the amount of base notice awarded. A notice award may exceed 24 months without exceptional circumstances where the additional notice is attributable to another legally recognized basis for increasing the award. Prior to the Supreme Court of Canada’s decision in Honda Canada Inc v Keays³, courts occasionally awarded more than 24 months’ notice by combining a base notice award with Wallace damages. ⁴ More recently, in Chalmers v Airways Transit Service Ltd⁵, the Ontario Superior Court of Justice awarded 25 months’ notice without relying on exceptional circumstances, instead adding a one-month “covid bump” to a 24-month base notice period to reflect the effects of the COVID-19 pandemic.

1. Lowndes v Summit Ford Sales Ltd, 2006 CanLII 14 (ON CA), at para. 11. See also Lischuk v K-Jay Electric Ltd, 2025 ABKB 460. ↩
2. Lischuk v K-Jay Electric Ltd, 2025 ABKB 460, at para. 20. ↩
3. 2008 SCC 39. ↩
4. See, for example, Baranowski v Binks Manufacturing Co, 2000 CanLII 22614 (ON SC), at para. 282. ↩
5. 2023 ONSC 5725. ↩

Framework (Exceptional Circumstances)

Whether exceptional circumstances exist depends on the employee’s overall circumstances.

Decisions where exceptional circumstances were found to exist have consistently involved the convergence of three factors⁶:

• advanced age (49+ years old);
• very long service (30-40 years’ service); and
• actual or effective lifetime employment with a single employer.

Courts have also considered the following additional factors:

• significant managerial or executive responsibility;
• status as a key employee;
• specialized skills and/or knowledge;
• whether the termination effectively forced the employee into retirement;
• whether the employee’s compensation was substantially above prevailing market rates;
• whether the employee’s management style reduced their marketability to new employers; and
• whether obtaining comparable employment would likely require relocation.

1) Advanced Age

An employee’s advanced age will support a finding of exceptional circumstances.

The reported decisions where exceptional circumstances were found to exist have consistently involved employees between 57 and 65 years of age:

2) Very Long Service

An employee’s very long service may support a finding of exceptional circumstances.

The reported decisions where exceptional circumstances were found to exist have consisted involved employees with approximately 30 to 40 years of service.

3) Lifetime Employment with a Single Employer

Lifetime employment with a single employer will support a finding of exceptional circumstances. This reflects the long-recognized principle that employees who devote most of their working lives to one employer often face greater difficulty obtaining comparable employment after termination.²⁷

Examples include where:

• the employee left high school to commence employment with the employer and her “entire working life [had] been dedicated to working at [the employer’s plant]” such that “[s]he [had] known nothing else”;²⁸
• the employees were terminated at the ages of 63 and 57 years old and the company was their “only employer since their respective graduations from university and college”;²⁹ and
• the employer was a family-owned and operated business to which the plaintiff dedicated his entire working life.³⁰

A finding of lifetime employment does not require strict exclusivity of employment throughout the employee’s career where any other employment was sufficiently minor or incidental such that the employee’s career was effectively devoted to the employer. In Lischuk v K-Jay Electric Ltd, the Court found that 34 years of service beginning at age 23 supported a finding that the company was “effectively the only employer [the employee] ever had” as the employee’s only other work experience was a brief period as a labourer in his early 20s.³¹

Lifetime employment may be established where an employee’s continuous service with the same employer spans multiple countries. In Milwid v IBM Canada Ltd, the employee worked for the company for 38 years, including approximately 16 years in South Africa before immigrating to Canada, where his prior service was recognized and he continued working for the company until his eventual termination. There, the Court found that the employee had spent “most of his working life” with the company and that it was “the only company he had worked for in Canada,” which it held supported a finding of exceptional circumstances.³²

4) Significant Managerial/Executive Responsibility

Significant managerial or executive responsibility may support a finding of exceptional circumstances. This may be the case where the employee occupied a senior leadership role with substantial managerial, operational, or strategic responsibilities, making comparable employment opportunities relatively scarce in the labour market.

Examples include where:

• the employee was considered “second in command” at the company as the General responsible for running the day-to-day business operations of the company;³³
• the dependent contractors “held supervisory, responsible positions in which they oversaw the installation of [the company’s] products and met with [the company’s] customers as its representatives;³⁴
• the employee had significant responsibilities, was just below the executive level, worked with the company’s partners to develop high-level strategies, and was responsible for overseeing a group of managers in his last two years of employment;³⁵ and
• the employee held an “executive and highly autonomous”³⁶ role as “one of the senior-most executive positions of the company.”³⁷

5) Key Performer

An employee’s status as a key performer may support a finding of exceptional circumstances. This may arise where the employee made an exceptional and sustained contribution to the employer’s business, success, or reputation, such that their role extended well beyond the ordinary performance of their duties.

Examples include where:

• the employee started as a low-level employee while the company operated out of a residential garage before becoming the second-in-command as the company “grew to be one of the top companies in [its industry]”;³⁸
• the dependent contractors were the company’s “public face to the outside world” for over a generation;³⁹ and
• the employee developed “one or two patents each year for his employer” and the employer expressly recognized the employee as a “key performer” in one of his last performance reviews.⁴⁰

6) Specialized Skills and Knowledge

Highly specialized or non-transferable skills and knowledge may support a finding of exceptional circumstances. This may arise where the employee’s expertise is closely tied to a particular employer, industry, or operating environment, such that it is not readily transferable to comparable employment.

Examples include where:

• the employee’s particular skills as the General Manager responsible for running the day-to-day business operations of an electrical contracting company were “not readily adaptable to other trade industries that involve different certification and specialized knowledge”;⁴¹
• the employee specialized in designing software to control unique hardware manufactured by the company such that his skills were tailored to and limited by his very specific workplace experience;⁴² and
• the employee had specialized skills in fiber production operation from a very particular manufacturing environment that were not easily transferable.⁴³

7) Forced Retirement

Whether the employee’s termination effectively amounted to a forced retirement may support a finding of exceptional circumstances. A situation of forced retirement usually arises where the employee’s age, limited education or transferable skills, and long-standing attachment to a single employer or industry significantly limit their prospects of re-employment.

In Currie v Nylene Canada Inc, the employee was terminated at age 58 after 40 years of service that began upon her graduation from high school. The Court found that she had spent her career with a single employer, possessed skills largely specific to the employer’s plant and industry, and lacked transferable skills, such as advanced computer knowledge, needed to compete in the labour market. The termination was therefore “equivalent to a forced retirement” given her age, limited education, and limited skill set.⁴⁴

8) Compensation Significantly Above Market

Whether the employee’s compensation substantially exceeded prevailing market compensation may support a finding of exceptional circumstances. This may be the case where the employee’s compensation reflected unique aspects of the employment relationship, such as an equity interest, compensation arrangements developed over a lengthy tenure, or compensation that was substantially higher than what was available for comparable positions in the market.

Examples include where:

• the employee was a shareholder in the company with a 20% equity interest and had a level compensation described as both “extremely high” and “substantially higher” than comparable positions within his industry;⁴⁵
• following the acquisition of their employer, the employees were offered continued employment by the purchaser who had significantly lower pay scales, would only maintain their existing base salaries for 18 months, and required them to keep their compensation confidential to avoid conflict with other employees, all of which “[emphasized] the difficulty the plaintiffs would have in finding similar employment”;⁴⁶ and
• the employee held one of the senior-most executive positions of the company and had “broad compensation which [was] not comparable to the current job market.”⁴⁷

9) Management Style

An employee’s management style, reputation, or established approach to leadership may support a finding of exceptional circumstances where it materially limits their ability to obtain comparable employment. This may arise where the employee has developed a well-known management style within a relatively small industry, such that potential employers are likely to be familiar with the employee’s reputation and may be reluctant to hire them into a comparable role.

In Lischuk v K-Jay Electric Ltd⁴⁸, the Court found that a 58-year-old employee’s “old school mentality” would be “difficult to sell to potential employers” in the company’s relatively small industry where there were only a limited number of comparable employers and the employee’s management style was likely known due to the company’s significant presence in that industry.

10) Need for Relocation

Whether obtaining comparable employment would likely require relocation may support a finding of exceptional circumstances. This may arise where the employee has spent a significant portion of their career in a particular geographic area with limited comparable employment opportunities, such that obtaining similar employment would require the employee to relocate, particularly later in their career.

In Lynch v Avaya⁴⁹, the employee had worked for approximately 40 years at the company’s facility in Belleville, Ontario, where he had lived throughout his employment. The Court found that comparable employment opportunities were scarce in the local labour market and more likely to be available in larger centres such as Ottawa or Toronto, a consideration that supported exceptional circumstances given the employee’s age of 63 and long-standing ties to the community.

6. This pattern is consistent with the observation in McKinney that a longer notice period may be justified for older, long-service employees who are at a competitive disadvantage in securing comparable employment because of their age: McKinney v University of Guelph, [1990] 3 SCR 229 at para. 92. ↩
7. 2015 ONSC 1081. ↩
8. 2016 ONCA 79. ↩
9. 2023 ONCA 696. ↩
10. 2018 ONSC 1168. ↩
11. 2023 ONSC 490. ↩
12. 2025 ABKB 460. ↩
13. 2022 ONCA 209. ↩
14. 2019 ONSC 714. ↩
15. 2018 ONSC 6952. ↩
16. 2026 ONSC 4045. ↩
17. 2022 ONCA 209. ↩
18. 2015 ONSC 1081. ↩
19. 2018 ONSC 1168. ↩
20. 2023 ONCA 696. ↩
21. 2023 ONSC 490. ↩
22. 2026 ONSC 4045. ↩
23. 2025 ABKB 460. ↩
24. 2019 ONSC 714. ↩
25. 2016 ONCA 79. ↩
26. 2018 ONSC 6952. ↩
27. Carey v F Drexel Co, 1974 CanLII 1733 (BC SC), at pp. 494-495. ↩
28. Currie v Nylene Canada Inc, 2022 ONCA 209, at para. 84. ↩
29. Dussault v Imperial Oil Limited, 2018 ONSC 1168, at para. 51. ↩
30. Contardi v Grand Cheese, 2026 ONSC 4045, at para. 14. ↩
31. Lischuk v K-Jay Electric Ltd, 2025 ABKB 460, at para. 21. ↩
32. Milwid v IBM Canada Ltd, 2023 ONSC 490, at para. 45. ↩
33. Lischuk v K-Jay Electric Ltd, 2025 ABKB 460, at para. 22. ↩
34. Keenan v Canac Kitchens Ltd, 2016 ONCA 79, at para. 32. ↩
35. Milwid v IBM Canada Ltd, 2023 ONSC 490. ↩
36. Contardi v Grand Cheese, 2026 ONSC 4045, at para. 14. ↩
37. Contardi v Grand Cheese, 2026 ONSC 4045, at para. 12. ↩
38. Lischuk v K-Jay Electric Ltd, 2025 ABKB 460, at para. 22. ↩
39. Keenan v Canac Kitchens Ltd, 2016 ONCA 79, at para. 32. ↩
40. Lynch v Avaya Canada Corporation, 2023 ONCA 696. ↩
41. Lischuk v K-Jay Electric Ltd, 2025 ABKB 460, at para. 25. ↩
42. Lynch v Avaya Canada Corporation, 2023 ONCA 696, at para. 13. ↩
43. Currie v Nylene Canada Inc, 2022 ONCA 209. ↩
44. Currie v Nylene Canada Inc, 2022 ONCA 209, at para. 84. ↩
45. Lischuk v K-Jay Electric Ltd, 2025 ABKB 460. ↩
46. Dussault v Imperial Oil Limited, 2018 ONSC 1168, at para. 51. ↩
47. Contardi v Grand Cheese, 2026 ONSC 4045, at para. 14. ↩
48. 2025 ABKB 460. ↩
49. 2023 ONCA 696. ↩

Table of Cases – Exceptional Circumstances