When an employee is terminated while pregnant, courts face a distinct legal question: how does pregnancy impact the calculation of common law reasonable notice? In Nahum v. Honeycomb Hospitality Inc., 2021 CanLII 151476 (ON CA), the Ontario Court of Appeal addressed this substantive employment law issue alongside the strict procedural rules governing when an employer can delay paying a court judgment.

Factual and Procedural Overview

  • Ms. Nahum brought a wrongful dismissal action after her employment with Honeycomb Hospitality Inc. ended while she was pregnant.
  • Justice Akbarali granted summary judgment in Nahum’s favour, awarding $34,194.87 in damages and $22,000 in costs, and found that Nahum’s pregnancy was a relevant consideration in assessing the notice period.
  • Honeycomb appealed to the Divisional Court, which dismissed the appeal and upheld the judgment (and Akbarali J.’s finding on pregnancy) on November 15, 2021.
  • Honeycomb then sought leave to appeal to the Court of Appeal, arguing among other things, that it was improper for the lower courts to recognize pregnancy as an applicable Bardal factor (particularly as Honeycomb denies being aware of Ms. Nahum’s pregnancy at the time of dismissal), when assessing reasonable notice.
  • As seeking leave does not automatically pause a monetary judgment, Honeycomb brought a motion under Rule 63.03 of the Rules of Civil Procedure for a stay of execution, pending that leave application.
  • Justice Sossin, sitting as a single motion judge, dismissed the stay motion and ordered Honeycomb to pay the damages and costs into its solicitors’ trust account within 30 days, plus $5,000 in costs of the motion.

The Three-Part RJR-MacDonald Test for a Stay

A party seeking to stay a judgment pending appeal at the Ontario Court of Appeal, must satisfy the three-part test for injunctive relief from RJR-MacDonald Inc. v. Canada (Attorney General), as incorporated into stay motions by J.P.B. v. C.B., 2016 ONCA 996:

  • (1) a serious issue to be tried;
  • (2) irreparable harm to the moving party if the stay is refused; and
  • (3) the balance of convenience between the parties.

In reviewing these factors, the Court held the following:

  1. A low bar on “serious issue” is not a low bar overall. Justice Sossin readily accepted that whether pregnancy can factor an assessment of reasonable notice, particularly where the employer disputes knowledge of the pregnancy, met the threshold for a serious issue. That threshold is easy to clear; it is not, on its own, enough to obtain a stay.
  2. General financial hardship is not irreparable harm. Honeycomb argued it would face financial hardship in paying before the leave and appeal process concluded. Justice Sossin found Honeycomb had not put forward evidence establishing irreparable harm on this record — a reminder that bare assertions of hardship, without supporting evidence, will not meet the test.
  3. Paying into trust undercuts a stay application. The order required Honeycomb to pay the award into its solicitors’ trust account pending appeal, rather than directly to Nahum. Where that option is available, it becomes harder for a moving party to argue the harm from paying is unrecoverable — funds held in trust remain protected if the appeal ultimately succeeds. Employers considering a stay motion should be prepared to explain why a trust arrangement would not adequately protect their position.

Strategic Implications for Employees & Executives

Key Takeaway: A judgment does not have to sit unenforced simply because the other side is still fighting in the courts. Pregnancy can properly factor into how much notice is owed.

  1. Pregnancy can affect the notice calculation. Prior to this stay motion being argued, the lower courts recognized that pregnancy was a relevant consideration in assessing reasonable notice. This assessment survived both the Divisional Court appeal and the stay motion untouched. Employees terminated while pregnant should consider raising this as a contextual factor when reasonable notice is being assessed.
  2. Enforcement doesn’t have to wait for every appeal to run its course. Where an employer cannot show irreparable harm, a successful plaintiff is generally entitled to receive — or have secured in trust — the amount awarded, even while a leave application is outstanding.
  3. Costs consequences apply to unsuccessful stay motions too. Honeycomb was ordered to pay an additional $5,000 in costs for bringing an unsuccessful stay motion, on top of the underlying judgment; a real cost to weigh before contesting enforcement.

For additional information on assessing severance entitlements, feel free to review our complimentary Severance Calculator.

Frequently Asked Questions

What is the RJR-MacDonald test for a stay pending appeal? A three-part test: (1) whether there is a serious issue to be tried, (2) whether the moving party will suffer irreparable harm without a stay, and (3) which party would suffer greater harm depending on whether the stay is granted or refused.

Does applying for leave to appeal automatically pause a judgment in Ontario? No. Under Rule 63.03, a party must bring a motion and satisfy the three-part test above; leave to appeal or an appeal itself does not automatically stay a monetary order.

Did the Court of Appeal rule on whether pregnancy affects reasonable notice in Nahum? This endorsement addressed only the stay motion. Justice Akbarali’s finding that pregnancy was a relevant consideration in the notice-period assessment was made at summary judgment and was left undisturbed by the Divisional Court and by this endorsement.

What counts as “irreparable harm” on a stay motion? The moving party must put forward evidence of harm that cannot later be remedied if it wins the appeal. General assertions of financial strain, without supporting evidence, will generally not be sufficient — particularly where a trust arrangement is available to protect the funds pending appeal.

Simon Pelsmakher served as co-counsel for the Responding Party, Ms. Nahum, in this matter before the Ontario Court of Appeal.

How Pelsmakher Law Can Help

Whether the issue is calculating reasonable notice after a pregnancy-related termination or responding to a stay motion during an appeal, employment litigation strategy at every stage matters. Contact Pelsmakher Law to schedule a confidential consultation, or browse more legal analysis on the Insights blog.