Employee claimed old contract didn’t apply to new position after promotion, but court found contract was still enforceable
Withstanding scrutiny
Termination provisions in employment contracts can be helpful for an employer when it comes time to end an employment relationship. As long as employment standards minimums are adhered to, it can make the costs of termination a known quantity. But the language has to be clear, as any ambiguity can leave the door open for a challenge by the departing employee.
But as the case below demonstrates, clear, plain language can stand up to such a challenge.
The British Columbia Supreme Court has determined a contract signed by a dismissed employee was valid and its termination provision was not ambiguous, despite the fact the employee had moved to a new position since the contract was signed.
Gerry Miller was employed with Convergys CMG Canada — a provider of customer care and billing services for businesses — since September 2003. He began as a telephone agent in Kamloops, B.C. and was later promoted to a team lead for other agents. In November 2006, Convergys promoted Miller to the position of client services manager.
When he started with Convergys, Miller signed an employment contract. For each of his two promotions, he signed a new contract. His last contract included a termination provision that allowed for seven weeks’ notice for dismissal without cause.
During his time with Convergys, Miller did well and was viewed as a “stellar employee” by the company. The company’s clients and his co-workers also liked him. When he was promoted to client services manager, he worked with one client in Kamloops. When that client closed its Kamloops offices, he was given a role with a large client for whom Convergys provided services at two U.S. locations — Pueblo, Col., and Salt Lake City, Utah. Miller worked from home about half the time and travelled the other half.
Part of the reason for the increased travel was that the Colorado location wasn’t doing well and the client preferred Miller to be onsite whenever possible. Convergys became concerned about the cost of having someone travel from Canada to Colorado on a regular basis. Because the company felt Miller was the right man for the job and it was happy with his work, it encouraged him to relocate to the U.S.
Employee didn’t want to relocate to serve U.S. client
Miller was reluctant to move to the U.S. for personal reasons. In 2010, he was promoted to senior manager client services, but did not sign a new employment contract.
When it became apparent Miller would not relocate, Convergys tried to help him find a position within Canada, as it felt the client services manager working with the Colorado client needed to be either there or at its Utah location. Miller and his manager discussed things, as he knew Convergys would eventually have to terminate his employment in that position. Because the manager liked him and recognized his value as an employee, she delayed the decision as long as possible. However, in June 2011, she told him his position was being posted and he would be terminated without cause according to a “reduction in force” by the company.
On June 30, 2011, Miller interviewed with Convergys’ hiring manager about a senior analyst position in Canada. On July 12, he was notified they wanted a second interview. The next day, Convergys formally terminated his position as senior client manager for the U.S. client. He was given seven weeks’ pay and benefits in lieu of notice.
Miller filed a wrongful dismissal suit, claiming the employment contract was unenforceable because it didn’t apply to his new position — he signed a new contract after each promotion except for the last one in 2010. He also argued the notice provision was ambiguous because a clause in the contract provides for no notice during a three-month probationary period after signing the contract, contrary to employment standards legislation which required one week per year of employment. In addition, the contract was unconscionable because he only had 24 hours to consider it with no legal advice, said Miller.
Old contract didn’t apply to new position: Employee
Miller said the differences in his responsibilities as a senior manager client services were “drastic” from those he had as a client services manager. He said the amount of budgetary responsibility doubled between the two U.S. sites from the Kamloops site, he was able to hire employees, had more people reporting to him, and was on call outside of regular work hours. In addition, his travel increased significantly, he said.
The court found Miller’s role as a senior manager client services was not significantly different from that of a client services manager. Though he had to travel more, that happened when he changed clients before he was promoted. In addition, despite the increase in budget with the new client, Convergys presented evidence that showed the volume of work was about the same. Therefore, Miller’s claim his employment changed drastically when he became a senior manager wasn’t the case and the contract he signed when he became a client services manager was still valid, said the court.
“I find the changes Mr. Miller described to his employment occurred when he moved from managing (the Kamloops client) to managing (the U.S. client) in the fall of 2009,” said the court. “The promotion he received to senior client manager in July 2010 recognized his increasing importance to (the U.S. client) and the growth in (the U.S. client’s) business with Convergys. I find that change in employment responsibilities to be a natural progression within the role of a client services manager.”
The court also noted Miller’s employment contract expressly stated that it would continue to apply if his role changed. Specifically, the termination provision said: “changes in position, responsibilities, salary or benefits will not invalidate any provision in this contract unless changes to any provision in this contract are expressly agreed to by the parties.”
The court also disagreed with Miller’s claim the notice provision was ambiguous. Miller argued the provision stated he would be provided with notice, or pay in lieu of, in accordance with the B.C. Employment Standards Act. However, he said, the clause did not say he was only entitled to the minimum notice. The court found a plain reading of the clause made it clear the employee was entitled to the minimum notice provided in the act.
The court also found the unconscionable argument didn’t fly, since the clause denying notice for dismissal during a probationary period didn’t apply to Miller, who had been employed with Convergys for three years when he signed the last contract. Even if it could be seen as imposing a “without notice” probationary period on Miller in 2006, the court found there was a provision that stated all parts of the contract were “separate and distinct covenants” and allowed for severing individual provisions without affecting the validity of the overall contract. Therefore, the contract didn’t breach the act, said the court.
As for giving him an opportunity to consider the contract, the court found 24 hours was a reasonable time to consider the terms and it specifically stated he could “feel free to seek independent legal advice.” Miller opted not to follow this recommendation. In addition, he had previously signed two very similar contracts with Convergys and should have been familiar with the language and terms, said the court.
The court also noted Miller had a good relationship with his manager and his termination was delayed as much as possible. Miller was also given an opportunity to search for other positions within the company and a second interview for one was requested shortly before his termination.
In a claim for punitive damages, Miller pointed out his medical services plan benefit was cut off after three weeks instead of lasting the full seven weeks, a sign of bad faith by Convergys. However, the court found this was “inadvertent and not an intentional act of malice” on the part of Convergys.
The court dismissed Miller’s claim, finding the termination provision in the employment contract he signed as a client services manager still applied to his dismissal as a senior manager client services.
For more information see:
• Miller v. Convergys CMG Canada Limited Partnership, 2013 CarswellBC 2644 (B.C. S.C.).
