There has been some controversy in Canadian law on the issue of whether the financial circumstances of the employer should play a role in deciding what constitutes reasonable notice of termination or pay in lieu of notice. Since multiple factors go into deciding what’s reasonable in many circumstances, why not this one?
This controversy was recently resolved by the Ontario Court of Appeal in Michela v. St. Thomas of Villanova Catholic School. The court overturned a lower court ruling that had reduced the normal, reasonable notice period because of the poor financial position of the employer that had to terminate the employees. The appeal court found that this was not a relevant factor.