An employee with five years of service to her employer has a bad few days at work.   She then has an argument with her manager.  At the end of the argument, the employee says one of the following things:

“I quit”;

“You can take this job and shove it”; or

“I don’t have to put up with this anymore.  I am out of here”,

and storms out of work.  After missing the next day of work, she returns and walks to her desk.  Her manager, bewildered by her return, tells her to leave, remarking that she had quit and therefore no longer has a job. The employee then sues for wrongful termination. Has she quit or was she fired?

Consider a different scenario. An employee reports a personal emergency and leaves work. She doesn’t return or call for weeks. Has she quit?

In answering the question, “did the employee quit?”, in any of the above scenarios, the court will engage in a two-part analysis.

First, the court must determine whether the employee intended to resign.  This question is answered from the subjective point of view of the employee, assessed at the time of the purported resignation.

Second, the court must determine if the employee’s words and actions (or in-actions) support a finding of resignation. This is assessed objectively from the point of view of a “reasonable employer”.
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A Judge of the British Columbia Superior Court has affirmed (read the decision here) a ruling of the British Columbia Human Rights Tribunal (read the Tribunal’s decision here) in which an equity partner of a large law firm was found to be an “employee” under the Human Rights Code.  It was further determined that the partner/employee’s right not to be discriminated against on the basis of age was violated by requirement contained in the firm’s partnership agreement that he retire at age 65.

John McCormick was one of about 60 equity partners in the Vancouver office of international law firm Fasken Martineau DuMoulin LLP.  He had spent his entire career at the firm, beginning as an articling student in 1970 and becoming an equity partner in 1979.

The Partnership Agreement signed by Mr. McCormick included mandatory retirement at age 65, following which – at the Managing Partner’s discretion – the lawyer may have been permitted to remain on as an employee or as a regular partner.  Remaining beyond age 65 in either of these roles was, however, expected to be the “exception rather than the rule”.

Human Rights Complaint

Before his mandatory retirement date, Mr. McCormick filed a complaint with the British Columbia Human Rights Tribunal.  In his complaint, Mr. McCormick asserted that mandatory retirement at age 65 would constitute discrimination on the basis of age contrary to s.13(1) of the British Columbia Human Rights Code by requiring him to retire at age 65. The respondent law firm, Fasken Martin DuMoulin LLP, argued that the Tribunal did not have jurisdiction to hear the complain because Mr. McCormick was not an employee, but a partner, and therefore not protected by the age discrimination provisions of the Code.

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Employees beware:  the things you post on Facebook can get you fired. 

In its  decision of Lougheed Imports Ltd. (West Coast Mazda) v. United Food and Commercial Workers International Union, the British Columbia Labour Relations Board upheld the summary (just cause) termination of a unionized employee on the basis of critical and offensive posts made on Facebook by the employee about the employer and its managerial employees.   Importantly, other employees of the business were included as Facebook friends of the employee, although it is by no means certain that this was a determinative factor in the case. 

One example of the posts will suffice to show what the labour board was asked to assess:

“Was asked for my opinions at a morning safety meeting…I replied “No comment”… Seems my Boss, whos owned the business 25 yrs & is fixed operations director of 2 dealerships as well … couldnt comprehend my reply?? So its confirmed…HE’S A COMPLETE JACK-ASS… not just Half-a Tard.”

The board concluded:

“I find that the nature of the comments made towards the supervisors were offensive and egregious.  J.T. expressed contempt for and ridiculed the manager and supervisors in such a manner that there was proper cause.  The fact that the Employer allowed this insubordinate conduct to continue for a matter of weeks does not mitigate against a finding of proper cause.  I therefore find the penalty is not out of proportion with the misconduct and there is proper cause for the decision to terminate the employment of J.T.”

I would expect a similar result to follow in Ontario, for either unionized or non-unionized employees.

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A purchaser of a business will frequently choose to complete the transaction as a purchase of assets only (inventory, equipment, intellectual property, client lists, etc.)  so as to avoid assuming the liabilities of the business as operated by the vendor.  It is important for the buyer to understand, however, that not all liabilities can be avoided in this way.

One significant accrued liability of a business is to its employees – in particular for severance and/or pay in lieu of notice upon termination.  If a buyer of the business wishes to keep on all or some of the employees, those employees will bring with them into their new employment their accrued rights to termination pay and severance under the Employment Standards Act, even if they are formally terminated by the vendor company and hired under new contracts of employment with the purchaser.   

This mandatory carry-forward of liability to employees is a result of s.9(1) of the Employment Standards Act, which reads:

If an employer sells a business or a part of a business and the purchaser employs an employee of the seller, the employment of the employee shall be deemed not to have been terminated or severed for the purposes of this Act and his or her employment with the seller shall be deemed to have been employment with the purchaser for the purpose of any subsequent calculation of the employee’s length or period of employment.

The only exception to this rule is, as set out in s.9(2) of the Act, if the employee`s date of hire by the purchaser is more than 13 weeks after the earlier of the date of the sale of the business or the employee`s last day of employment with the seller.

Since the exception provided by s.9(2) of the Act is rarely of any use (most businesses, after all, need employees working consistently and can`t take a 13 week break in operations), it is imperative that buyers receive complete information on accrued employee liabilites and receive advice from experienced counsel on options for negotiating appropriate provisions in the Agreement of Purchase and Sale of the business to offset or mitigate against this assumed liability.

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Whether subject to the Canada Labour Code (employees in federally regulated industries such as airlines and banks) or the Employment Standards Act, workers in Ontario have the benefit of substantial statutory protections on issues such as overtime pay, working hours and rights to notice and/or compensation on termination of employment.  What is not commonly understood by employees and employers alike, is that some of these legislated protections are minimums only and do not state the full extent of an employee’s rights.  Take termination, for example.

The Employment Standards Act provides for a set number of weeks of advance notice – or pay in lieu of such notice – when an employee is terminated.  The length of notice is dependent only on the length of service.  Additionally, the Employment Standards Act provides certain employees with the right to receive severance pay, which is also determined based on the length of service.

The Canada Labour Code similarly mandates notice periods for terminated employees.

Neither the Employment Standards Act nor the Canada Labour Code state that these notice requirements are minimums only.  Simply reading the legislation – or even handbooks or information provided by relevant government Ministries -would lead most people to conclude that the legislation provides a complete answer to the question of what an employee is entitled to receive upon termination of her employment.  Read the rest of this entry »

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