Legal. Beating the Odds. Wrongful dismissal cases examined by Robert Yeager

Transcription

1 Legal Beating the Odds Wrongful dismissal cases examined by Robert Yeager Over time, as an employment lawyer, I have noticed an equation develop. My success ratio with cases, in terms of wins and losses in court, goes up noticeably in direct proportion to the number of terminated employees I represent. Looking at it the other way, my success ratio in terms of wins and losses goes down noticeably in direct proportion to the number of employers I act for. I assure you that I give the same effort to each file, whether acting for an employer or employee. So it's not me. I suspect that virtually every employment lawyer working both sides of the fence, so to speak, would tell you a similar story. Therefore, I have come to the conclusion that the factor that determines my "batting average' in any given situation is the reasonableness of employer conduct in relation to the termination. The Case The Courts appear to be awarding longer periods of notice in a broad array of circumstances, and in doing so, are focussing more and more on employer conduct in relation to termination. Accordingly, what the Courts award in terms of reasonable notice of termination, and how they interpret employer conduct, are generally broadening in ways which impact the terminating employer negatively. A final note of alarm. It should not be assumed that only long-term management type employees will draw significant notice periods from the Courts. There is high legal authority affirming the principle that the job function of the terminated employee is not necessarily a reason to award that person a longer period of notice than a more junior employee. There are cases in increasing numbers which award clerical staff significant notice periods. As an example, in a recent case in which I was counsel for the terminated employee, the Court awarded a seven-month notice period for a nonmanagement employee who was only employed for a total period of seven months. This is more than sufficient cause for alarm for most employers. There is nothing an employment lawyer acting for terminated employees loves more than an employer who makes unreasonable decisions related to the termination of its employees. It's the unreasonableness of employer actions that increases my "batting average'. Courts in Canada have a tendency to favour the

2 terminated employee over the employer when asked to render judgment. And when the employer has been unreasonable and forced the employee to go to trial to get what is reasonable, the Courts tend to take it out on the employer. It ends up in a mess for the employer, who must pay the damages assessed by the Court, plus the legal costs of the terminated employee. Plus, potentially, an increased notice period based on conduct. Exhibit "A" - The Contract In the world of seasonal employment such as the golf industry, there are at least two basic types of employment contract. There is the contract of definite term, where the employee is hired for a defined period of time, such as your summer golf season, and then terminated at the end of the season. As long as the employer is meticulous at maintaining this type of contract, then a dismissal at the end of the season will attract no requirement that reasonable notice of termination be given. Also, no damages will flow from the refusal of the employer to re-hire an employee terminated from a contract of definite hire. The second basic type of contract is the contract of indefinite term, where the employee by right is entitled to what the common law deems to be the reasonable notice of termination. This reasonable notice period is determined based on a number of factors, described below. The problem for golf course operators arises in relation to the termination of an employee who the operator thought was on a contract of definite hire but who in fact, unbeknownst to the operator, is on a contract of indefinite hire. Employment contracts have this nasty habit of evolving beyond initial suppositions. Argument & Law It may come as a surprise to some employers, but each of your employees, hired on contracts of indefinite term with you, has a contract between he/she and you (whether written or verbal, they're both quite enforceable) which requires you to give that employee, upon termination, what the common law deems to be reasonable notice of termination. As described in this article, what is reasonable notice at law may seem very unreasonable to you ex post facto. Another surprise may be just which of your employees is hired on contracts of indefinite term. Most golf courses in Canada operate seasonally, and the employees are Òlaid offó at the end of each season and hired back at the beginning of the next season. This pattern assumes that each such employee is terminated and rehired, and that such a pattern, if maintained, creates a presumption of a contract of definite term (as opposed to a contract of indefinite term). In cases where this procedure of hiring and laying off is done correctly by the employer, the employment contract is considered by the courts to be a series of

3 contracts of definite term, and the termination of such a contract at the expiry of the term, or the failure to rehire at the commencement of the new term, will not support a claim for wrongful dismissal by the employee. To maintain the series of contracts of definite term it is essential that your practices be unvarying and accord strictly with the law on this topic. Most golf courses operate on the presumption that all employees who are employed seasonally are on contracts of definite term. But courts across Canada have held that it is not a presumption of law that such an employee is, by virtue of the fact of seasonal employment, necessarily an employee with a contract of definite term. Seasonal employees have been found to have contracts of indefinite term in certain cases. Most of the facts that determined whether a seasonal employee had a contract of definite or indefinite term hinged upon employer conduct during the employment and during the off season. For instance, in the case of Hildebrandt v. Wakaw Lake Regional Park Authority [1999] S.J. No. 33 (Saskatchewan Court of Queen's Bench), the Court found that because the employer hired back the same people each year, did not advertise for the positions at the commencement of the new season, and completed the Record of Employment for the terminated employee by giving the reason for termination as ÒlayoffÓ and giving the date of recall as ÒunknownÓ instead of the more certain wording Ònot returningó, the employee was considered to be an employee of indefinite term hire, and therefore entitled to reasonable notice of termination. If you thought the notice period for such an employee would just be the length of the new season, though this might seem logical, you would be incorrect. In the case of Van Tent v. Cloverdale Raceways Ltd. (1997), CanRepBC 2476 (B.C.S.C.), the Court held that the notice period should not be determined by the length of the seasons or length of time between seasons. Rather, it should be determined according to the principals of common law, just like any other wrongful dismissal case. Finally, in the case of Saunders v. Fredericton Golf & Curling Club Inc. (1994), 151 N.B.R. (2d) 184 (N.B.C.A.), the Court held that in cases where a definite pattern of recall of employees had been established over time, this would be considered a substantial factor the court would use to impute the existence of a contract of indefinite term. So you can see that if you are making the assumption that your employees can be treated as having contracts of definite term just because their employment is seasonal, then to be correct, your business practices must strictly accord with the law in this area, or you will have employees of indefinite term on your hands.

4 In general, there are innumerable ways to breach a contract of indefinite term. The most common employer breaches resulting in legal actions involve: unilateral actions by the employer which attempt to amend basic terms of the contract (such as pay, title, duties etc.) in the employer's favour, without the consent of the employee; on termination, failing to give the terminated employee what the law considers to be the reasonable notice of such termination as applicable to that employee based on a number of factors. The factors invariably considered by a court in assessing reasonable notice at common law are as follows: 1) the character of the employment; 2) the length of service; 3) the age of the employee; 4) the availability of similar employment, having regard to the experience, training and qualifications of the employee: Bardal v. Globe and Mail Ltd. (1960), 24 D.L.R. (2d) 140 (Ont. H.C.). Added to these basic factors are other factors emerging within the case law, such as, for example, whether the employee was induced to employment from other secure employment, and whether there was a lack of good faith in the course of dismissal, and other emerging factors: Wallace v. United Grain Growers Ltd. (1997), 152 D.L.R. (4th) 1 S.C.C. The first of the two types of breach set out above is known as a constructive dismissal, which amounts to a wrongful dismissal. The second is an outright dismissal which, when less than reasonable notice is given, is a wrongful dismissal. Either of these particular breaches is immediately actionable in damages by the employee against the employer, and will likely cause the terminated employee to find his/her way to legal counsel. You, as the employer, will then soon be in receipt of a letter from the lawyer for the terminated employee, spelling out what the law says is a reasonable period of notice, and demanding payment of the salary and benefits of the terminated employee over the period stipulated. Please note that by the time the lawyer gets hold of this matter, the notice period has become probably quite unreasonable in your view, based on what you thought was appropriate notice at the point of termination. Any employment lawyer knows that reasonable notice is something that is determined on a case by case basis, ultimately by the courts, based on a growing and increasingly complex list of factors and facts as set out above. The important thing to note is that what makes a dismissal wrongful is not that your employee was dismissed, but rather that the dismissal did not include reasonable notice of the termination that the common law requires. Terminated employees make their way to my office not because they know the law, but because in their heart they sense they have not been dealt with fairly. Closing Statement Preventative measures can and should be taken before you

5 wind up going to court. You can be guided by the law in advance of attempting to effect the dismissal of an employee. You may be the victim of inaccurate presumptions about the true legal status of your employees. You may have practices in your office which are inconsistent with treating your employees as truly seasonal and definite term employees, such as the way you make out Records of Employment or advertise for positions, or re-hire. As business people, you should be making calculated decisions and establishing clear policies consistent with the law on such matters, given the expense and embarrassment that often flows to the employer from a bungled termination. The only way to make a calculated decision and form policies that conform legally with your aim, I submit, is to first be made aware of the facts and the law. Therefore, I urge you, seek seasoned legal counsel in the form of a lawyer familiar with the issues related to employment law before you terminate an employee. You will pay for such expertise "on the front 9", but you will finish well "on the back 9".