Charging employees for damage? Just don't (Legal View)

Worker was constructively dismissed by being put on the hook for equipment damage: Court
By Jeffrey Smith
|Canadian HR Reporter|Last Updated: 06/15/2015

A British Columbia worker was constructively dismissed when his employer notified him, following a few incidents of equipment damage, it would be charging him for the cost of any additional damage, the B.C. Supreme Court has ruled.


Ralph Rothberger was a heavy equipment operator for Concord Excavating and Contracting in Surrey, B.C., hired in 2001. He primarily worked as an excavator operator and worked seasonally, from early spring to late fall. 


During the busy season, he often worked more than eight hours per day and 40 hours per week but received no overtime pay. 

During the off-season, Rothberger didn’t work and relied on employment insurance payments as income.


Rothberger was considered a good employee, receiving several pay raises and being called back every spring when work became available. He had no discipline on his file.


In the spring and summer of 2012, Rothberger was involved in three incidents while working — two causing damage and equipment breakdown and one causing a power arc leading to a power failure at a worksite. In one of the incidents, the excavator’s bucket came off and a piece of equipment was lost in a ditch. 


The incidents also resulted in downtime from temporary shutdowns.


On Aug. 31, 2012, Rothberger received a note with his pay slip — written by Concord’s bookkeeper, who was also the wife of the company principal — that stated: “As Concord has replaced two (2) wedges (due) to operator fault, the charge of any further will be made to you.”


Rothberger didn’t acknowledge the equipment breakdowns and loss were due to his misconduct or failure, so he tried to talk to Concord’s principal about the note. He approached him at an event about a month later, but the principal waved him off, telling him to forget about it. 


The principal later testified he hadn’t intended to pursue payment from Rothberger, despite the note. 


However, Rothberger wasn’t told the company didn’t intend to obtain payment and he felt his concerns over paying for future equipment loss were being dismissed.


The principal testified Rothberger approached him again the following week at a safety meeting, but he told Rothberger it wasn’t the time or place to discuss it. Rothberger claimed he had no memory of having that conversation.


Rothberger investigated and discovered the B.C. Employment Standards Act prohibited employers from demanding payment from employees without consent. As a result, he left copies of the relevant sections of the act in his employer’s mailbox on Oct. 1. 


The bookkeeper responded with an angry email outlining the incidents and stating, “Your lack of safety checks and lack of safety requirements are noted and filed should I need them for any future legal action you may want to pursue.”


Last straw for employee

After receiving the email, Rothberger decided he could no longer work for Concord and, on Oct. 2, he told the supervisor at his worksite he was quitting and walked off the job. The supervisor relayed the information to Concord’s principal.


Rothberger sued for constructive dismissal, claiming the note on his payslip amounted to a change to his terms of employment and the Oct. 1 email was an implied threat. Together, these constituted constructive dismissal, said Rothberger.


Rothberger also filed a claim for unpaid overtime and was awarded back pay for the six months prior to the day he stopped working for Concord. Six months was the maximum period of time for which unpaid overtime could be awarded under the Employment Standards Act.


Email ‘wholly unresponsive,’ says court

After Rothberger received the note, he made attempts to discuss the matter but was brushed off, found the court. The note clearly stated Concord was going to deduct future costs from Rothberger’s paycheque, which was contrary to the act, and when Rothberger pointed out the illegality of it, he was answered with an email that was threatening and provocative, not to mention “wholly unresponsive to (Rothberger’s) legitimate effort to have (Concord) resile from its stated intention to charge him with respect to future incidents,” said the court.


The note with his paycheque warning of the deduction of an unspecified amount “was a material change to the employment contract, which entitled (Rothberger) to receive an hourly wage for hours worked,” said the court. 


In addition, it was contrary to the employment standards act and an infringement of Rothberger’s rights, since the vagueness of the note gave no indication as to how much the threatened deductions would be.


Since Concord’s actions constituted a change to Rothberger’s compensation package — which was at the heart of the employment contract — and amounted to constructive dismissal, the court found Rothberger didn’t have to continue working and wait for the deduction policy to take effect.


Concord’s conduct in how it communicated with Rothberger also breached the “fundamental term of any employment relationship that the employer will treat the employee with civility, decency, respect and dignity,” said the court.


If Rothberger had not been constructively dismissed, he would have worked full-time until the end of the busy season in mid-November 2012 and started again in early January, as in most other years, it found.


Rothberger found new employment in early March 2013, so the court found he was entitled to compensation for 12 weeks of lost employment. With vacation pay added, the total damage entitlement was $15,264.


For more information see:

•Rothberger v. Concord Excavating & Contracting Ltd., 2015 CarswellBC 1191 (B.C. S.C.).


Jeffrey R. Smith is the editor of Canadian Employment Law Today. For more information, visit www.employmentlawtoday.com.

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