Government to intervene in wrongful dismissal case of payroll clerk

Case examines pay grid used in job redundancy or disability
By Sarah Dobson
|hrreporter.com|Last Updated: 08/30/2007

The Newfoundland and Labrador Supreme Court is allowing the province to intervene in wrongful dismissal proceedings concerning a Newfoundland payroll clerk.

The case concerns Bess Ann Forsey who worked for the Eastern Regional Health Authority in Burin, Nfld., for 28 years. On Jan. 23, 2004, she was told her job was being terminated because of a plan to restructure the financial services department.

Forsey was offered either a lump sum of $45,464.10 with all employment benefits lost or her regular salary on a bi-weekly basis for 62 weeks ending April 25, 2005, with continuation of her pension and group insurance benefits during the payout period.

She chose the latter and received two additional amounts: $14,665.83 in contractual severance or the equivalent of 20 weeks’ pay and $5,870.89 in accumulated vacation pay.

But she sued the Eastern Health Authority because she was unhappy with the adequacy of the pay. In particular, she felt she was “wrongfully dismissed without adequate notice and… entitled to damages equal to the salary and benefits she would have been entitled to receive for the period of reasonable notice which the defendant was required to give her.”

Forsey’s employer relied on the provincial government’s termination policy to calculate the pay it offered her in lieu of notice of termination. In the early 1990s, the Treasury Board developed a re-employment priority policy for government employees who lost permanent employment because of disability or job redundancy. A grid sets out the number of weeks’ pay in lieu of notice and considers the employee’s length of service and age when terminated. Employees who have at least 22 years of service and are older than 54 are entitled to 62 weeks’ pay in lieu of notice.

But Forsey said the policy and scaled grid provide less pay in lieu of notice than she is entitled to under the common law.

In February 2007, the provincial government applied to intervene as the proceedings “raise questions of law related to enforceability” of its notice policy and the case “places the adequacy of its grid squarely in issue in these proceedings and it is concerned about the potential impact of Ms. Forsey’s challenge on the grid.”

The Supreme Court’s May 3 judgment agreed, stating the government has “sufficient interest in the proceedings” that “sets it apart from other observers of the proceedings” and its involvement will not delay or hamper proceedings.

The outcome of the claim “may have implications for the continued use of the grid in all sectors of the public ser-vice and amongst the sat-ellite boards and agencies of the government which also use it,” said the court

The government also showed it can make “a useful contribution” because it has access to studies and people involved in developing the policy and has acquired expertise using the policy over the last two decades.

“It will be difficult, if not impossible, to avoid some examination of how the policy was developed when considering whether its implementation provides reasonable results in light of the common law principles,” said the court.

Sarah Dobson is editor of Canadian Compensation & Benefits Reporter, a sister publication to Canadian HR Reporter. For more information, visit www.hrreporter.com/ccbr.

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