Worker questions whether silence during transition means accepting employer's terms
The Supreme Court of British Columbia recently dealt with a wrongful dismissal claim involving a controller who received eight months' working notice in October 2022.
The worker was told his employment would end the following June, and that during this notice period, he would carry out his usual duties with no changes to the terms and conditions of his employment.
However, the worker argued that his duties were systematically reduced during the notice period until he was left with virtually nothing to do.
The worker challenged whether the eight-month notice period was reasonable given his age, length of service, and senior position.
He also claimed he was constructively dismissed when his role changed significantly during the notice period.
Background of the wrongful dismissal claim
The worker, a 63-year-old Certified Professional Accountant (CPA), had served as controller since September 2014.
The plumbing contractor had grown from a small residential service to a commercial-focused operation employing 35 to 45 workers.
In his controller role, the worker reported directly to the company's president. His annual salary was $80,000, along with vacation and benefits.
His responsibilities included managing accounting personnel, ensuring compliance with administrative policies, coordinating month-end accounting, preparing financial statements, managing payroll and benefits, administering contracts, and ensuring regulatory compliance with the Canada Revenue Agency and WorkSafeBC.
A factual issue arose at trial about whether the worker was employed full-time or part-time.
The employer suggested the worker was only working three days per week. However, the court found the position of controller was a senior position with a high degree of responsibility.
The worker was not designated as an employee expected to work a specific number of days or hours, but was to be responsible for carrying out the duties within his role. His pay was salaried, not based on hours or days worked.
How the notice period unfolded
On 26 October 2022, the company's president delivered a termination letter stating:
"As discussed, until June 30, 2023, you will continue to be employed by [the employer] and you will be expected to carry out your usual workplace duties and responsibilities. The terms and conditions of your employment will remain unchanged until your employment ends on June 30, 2023."
About two hours later, the worker was introduced to his replacement, who would serve as the new chief financial officer (CFO).
However, the worker's job duties began changing shortly after notice of his termination. His management and supervision of accounting personnel, compliance responsibilities, internal controls work, and contract administration duties were removed on 26 October 2022.
By December 2022, his month-end accounting coordination, fiscal year-end procedures, and administration of the profit-sharing plan were removed.
By December 2022 to January 2023, his responsibility for preparing monthly accounting reports and financial statements was removed. In February 2023, his management of corporate credit card expenditures was removed.
The employer argued it was natural during the working notice to see duties gradually transferred to the incoming CFO.
However, the court noted: "[The employer] did not lead evidence to show that the inference or assumption drawn by [the worker] was incorrect, and did not lead evidence contradicting the evidence that [the worker] was no longer responsible for the tasks he felt had been removed."
The office move and constructive dismissal
In April 2023, the worker was moved to what he described as an isolated office in a storage area. He described the conditions as inferior, without air conditioning and lacking fresh air or windows.
The court concluded the new office provided an inferior environment, one of a more transitory nature, and was not generally intended for senior-level staff as a full-time workspace.
On 3 April 2023, the worker wrote: "Further to our meeting of this morning, this is to confirm in writing my decision to leave [the employer] prior to the stipulated termination date of June 30, 2023... I feel I have been 'squeezed out', and that you have made circumstances such that I had no other rational alternative, other than to quit."
The court found: "There was an express representation made to [the worker] in his termination: he was to serve working notice, but his job would not fundamentally change... The way [the worker's] duties were changed—whether expressly or sometimes impliedly—was inconsistent with that expectation. Instead of maintaining consistency, it rapidly degraded [the worker's] role until he was left feeling he had nothing to do."
Whether adequate notice was provided
The worker argued that several factors warranted a notice period longer than eight months.
He relied on case law suggesting that controllers receive between 1.66 and four months of pay per year for each year of service.
The employer argued that eight months' notice was reasonable.
The court found both sides' case law provided helpful benchmarks and accepted the worker's submission that 15 months' notice was reasonable in all the circumstances.
The court considered that the worker was 63 years old at the time of termination, had worked in a senior position for eight and a half years, and would likely face difficulty finding comparable replacement work.
Could the worker challenge the notice later?
The employer argued that by continuing to work from October 2022 until April 2023 without objecting, the worker had accepted the notice period.
The court noted that neither party provided authority involving this specific factual situation.
It ruled: "In the circumstances, I find [the worker's] course of conduct was not unreasonable. He attempted to work out the notice period. That period, in my view, is a fair time in which an employee may have the opportunity to consider whether the notice offered is in fact adequate."
The court stated: "Our courts have not, to this point, required an employee to object to the insufficient provision of notice prior to the exhaustion of that period."
Final judgment and court's decision
The worker took steps to seek alternative employment starting in May 2023.
He applied for positions including accounting clerk, accounts payable manager, senior accountant and assistant controller.
The worker was not successful in obtaining any work. He felt his age affected his ability to get work, and some employers were not interested in hybrid work arrangements.
Eventually, he decided to retire in early 2024. The employer argued the worker failed to mitigate his damages. The court found:
"Based on his evidence regarding his job search, including applying to positions he was both qualified and overqualified for, it appears [the worker] did take reasonable steps to mitigate his damages."
The court concluded the notice provided to the worker was not reasonable, and that he was entitled to 15 months' notice. The court found the worker was constructively dismissed during his working notice period, stating:
"I conclude that [the employer's] actions represent a series of acts that cumulatively would lead a reasonable person to conclude the employer no longer intended to be bound by the employment contract, and constituted constructive dismissal."
The court did not award aggravated damages and dismissed the employer's counterclaim for alleged overpayments. The worker was awarded costs.
