The recent Ontario Superior Court decision in Carroll v. Oracle Canada ULC, 2025 ONSC 4889 demonstrates how courts consider the unique circumstances of an employee in assessing the appropriate period of reasonable notice and reinforces the importance of an employer’s good faith conduct in the manner of termination, particularly when statutory entitlements and contractual obligations are involved.
The plaintiff employee, Mr. Carroll, was a 61-year-old Global Strategic Client Executive who worked at the defendant company, Oracle Canada ULC. After nearly four years of service, Mr. Carroll was terminated without cause due to a company restructuring. Mr. Carroll brought a wrongful dismissal claim against Oracle seeking damages arising from the termination of his employment.
Assessment of Reasonable Notice
Relying on the well-known Bardal factors, which consider the character of employment, length of service, age, and availability of similar jobs, the court determined that Mr. Carroll was entitled to 12 months of reasonable notice.
The Court found that Mr. Carroll’s age, highly specialized role, and variable high earnings justified a longer notice period. In particular, the Court found that his specialized expertise and high compensation placed him in a “rarefied category” where comparable roles are harder to secure, recognizing that short-service employees in senior, well-paid roles are often entitled to proportionately longer notice periods. The Court also noted that Oracle did not provide Mr. Carroll with a letter of reference, which can hinder re-employment and, in turn, increase the reasonable notice period.
Compensation for the Notice Period
The Court treated each component of Mr. Carroll’s compensation package differently. His income came largely from commissions, which exceeded half a million dollars in some years. The Court confirmed that commissions must be included in the notice period calculation and applied a three-year average to account for variability and fairness.
Mr. Carroll’s claim for the loss of Restricted Stock Units was dismissed, as the plan documents clearly excluded them from termination entitlements. His benefits, however, were valued at 10% of his base salary for the period after his coverage ended, consistent with prior case law. Oracle was also required to continue matching Mr. Carroll’s RRSP contributions at 6% of his base salary throughout the notice period, confirming that employees are generally entitled to their entire compensation package during the reasonable notice period.
Punitive Damages for Withholding Commissions
Perhaps the most striking aspect of the case was the Court’s award of punitive damages, which arose from Oracle’s failure to pay more than $57,000 in commissions owed during the statutory notice period. Although these commissions were eventually paid, Oracle delayed payment for eight months without explanation. Additionally, Oracle maintained until shortly before trial that Mr. Carroll’s entitlements were limited to statutory minimums under an employment agreement that had already been struck down as unenforceable.
The Court found this conduct to be a breach of the duty of good faith, describing it as a “legally untenable position” adopted in an apparent effort to pressure a financially vulnerable employee into a settlement. The Court concluded that punitive damages were justified to both denounce and deter similar employer misconduct and, balancing proportionality with the need for deterrence, the Court awarded punitive damages equal to the withheld commissions.
Key Takeaways
This decision offers lessons for both sides of the employment relationship. For employees, it illustrates the importance of understanding their entitlements on termination, as commissions, bonuses, and other forms of compensation may form part of the termination package. For employers, it serves as a reminder to act promptly, transparently, and in good faith at the time of termination, as courts will hold employers accountable where bad faith conduct is apparent.
If you have questions about how your compensation and entitlements should be treated following termination, the team at Kent Employment Law can help you understand your rights and obligations.
