You Raise The Issue - Compensation And Terminating Executives

Question: Our company is considering terminating a longterm, senior executive. What is our maximum financial exposure?

Answer: Twenty four months has generally been considered to be the upper limit for reasonable notice of termination without just cause. However, in a recent Ontario case the Court awarded a relatively short-term employee damages in an amount equivalent to 30 months salary and benefits.

The Plaintiff in this case was Mr. Kilpatrick who had previously been employed as the President at the Moncton Hospital. He had worked for that organization for about 29 years and was secure in his position. The Peterborough Civic Hospital actively recruited Mr. Kilpatrick and eventually persuaded him to relocate and accept the position as Chief Executive Officer with their organization.