Nearly 40 years of service ends in court battle over voluntary retirement versus dismissal
The Supreme Court of British Columbia recently dealt with an employment case involving retirement discussions that escalated into a wrongful dismissal claim.
The case centred on whether a long-term employee had voluntarily retired or was wrongfully terminated by his employer.
The worker, who had nearly four decades of service, argued that discussions about retirement were preliminary and flexible, never constituting a firm commitment.
He maintained he was pressured into agreeing to a retirement date and sought significant damages for wrongful dismissal.
The employer argued that the worker had voluntarily announced his retirement date, which was publicly communicated to the management team. They maintained that succession planning had already begun based on this retirement commitment.
The worker had nearly 40 years of service in the agricultural feed industry, holding managerial positions since 1992. He worked at companies with no formalised retirement process.
The worker was also a partner through a 2013 partnership agreement that required written notice at least two years before withdrawal.
In January 2021, when the worker was almost 63, he wrote to the general manager: "we should also probably discuss my retirement date … I don't want to over stay my welcome."
He explained he raised this topic because "65 seemed to him to be the magic number for retirement."
The first substantive discussion occurred during a February 2021 meeting. Though both men later had vague recollections, subsequent communications confirmed retirement had been discussed.
The general manager's March 2021 report stated that the worker "is considering setting a retirement date in the next 12 months."
In September 2021, the general manager emailed about retirement plans, ending with: "if you haven't yet given it much thought since January, that's totally fine too, no pressure whatsoever from me, I'd rather you stay!"
The worker responded positively, welcoming the opportunity to discuss his "exit plan."
The crucial October 4, 2021 meeting lasted about five hours, with thirty minutes discussing retirement. Both parties agreed that January 31, 2023, was identified as a retirement date, but disagreed about what this meant.
The general manager sought permission to announce it at the upcoming management retreat, which the worker granted.
Within days, the general manager announced the worker would be retiring on January 31, 2023, after more than 39 years.
The worker expressed no concerns about the announcement and made no attempt to clarify that he considered the date flexible.
Following the announcement, the employer began succession planning. In February 2022, the general manager wrote:
"In your final year with [the companies], we really want to honour what will be almost 40 years with us... this could be a 'capstone' year for you as well, which would be awesome to see you 'finish strong'!"
The worker replied asking for bonus reconsideration but did not raise concerns about the reference to his "final year."
In August 2022, during their meeting, the general manager testified the worker asked to change his retirement date from January to April 2023.
The general manager suggested March 31, 2023, which the worker "readily accepted." The worker's recollection differed, claiming he felt pressured, though his trial testimony contradicted his earlier discovery evidence.
Throughout 2022, succession planning continued based on the announced retirement date, with the employer identifying and training potential replacements for the worker's responsibilities.
In October 2022, facing financial concerns, the worker emailed: "I have been giving my retirement date serious consideration and along with the guidance of my financial adviser, I have come to the difficult conclusion that I need to delay my date by another year or more."
He added: "I know that I am not the first in the company to extend a retirement date and I did not intend to be one of them."
The general manager responded that since "his retirement was announced at the management retreat, he has been preparing to replace [the worker] at [the companies], and turning back on the clock will end up being quite disruptive to the team moving forward."
A November meeting confirmed both the general manager and chief financial officer wanted the worker to continue with retirement as planned.
The worker's October email proved significant because he referred to "my date" and acknowledged he "did not intend to be one of them" who asked to change retirement dates, suggesting he had previously considered March 31 as a firm commitment.
The court explained that retirement is "a decision made by the employee to terminate or repudiate the contract of employment, usually on some future specified date."
From a legal perspective, "retirement is the same as a resignation, albeit that the reasons for each are different."
The legal test requires both subjective and objective elements - whether the employee intended to resign and whether their words and actions, when viewed objectively, support a finding of resignation.
However, the court emphasised that the employee's state of mind must be assessed objectively from the perspective of a reasonable person.
The burden of proof rested with the worker to prove he was wrongfully dismissed rather than having voluntarily retired. This meant demonstrating that he had not voluntarily agreed to retire.
The court found several aspects of the worker's testimony problematic. Regarding his claim he could not recall the retirement announcement, the judge observed:
"After close to 40 years with the company, the announcement of his retirement to the management group and owners, who were a tight-knit group according to [the worker], would have been a significant and memorable event."
The court rejected the worker's interpretation of "finish strong" in the February 2022 letter: "It is quite obvious that the words 'finish strong' are a reference to this being [the worker's] final year."
The judge found the worker's October 2022 email particularly damaging: "This email is clear evidence that, but for unanticipated economic factors, [the worker] intended to retire on March 31, 2023."
The court concluded: "I am satisfied that viewing the matter objectively, from the perspective of a reasonable person, during the meeting on August 22, 2022, [the worker] communicated a voluntary, clear, and unequivocal offer of an intention to retire on March 31, 2023, and that offer was accepted by [the general manager] on behalf of the [employers]."
The judge dismissed the wrongful dismissal claim with costs awarded to the employer, demonstrating that courts assess retirement agreements objectively based on what a reasonable person would understand from the employee's words and actions.
