Employee worked through several ownership changes over 36 years
A British Columbia company wrongfully dismissed an employee when it laid him off indefinitely, but the employee should have accepted an offer to return to his position after threatening legal action, the B.C. Supreme Court has ruled.
Clarence Hooge, 59, was a production supervisor at a lumber mill in Chilliwack, B.C., operated by Gillwood Remanufacturing. He began working at the mill in 1975 and continued without a break through three ownership changes, though he had no written employment contract. When Gillwood took ownership of the mill in 2011, Hooge continued to work in the same position he had been in under the previous ownership.
In the four years previous to Gillwood taking over, production had fallen significantly. Some supervisory personnel had been let go, but Hooge remained as one of two production supervisors.
In 2010, the mill was sold and the old owner provided Hooge with a record of employment (ROE) indicating a last day of service and that he had worked at the mill since 1975. However, the new owners took all of the existing staff with their pay and benefits, changing only their holiday entitlement and medical provider. These owners sold to Gillwood in July 2011, providing Hooge with an ROE covering June 2010 to July 2011.
Gillwood told staff they would all be kept on and Hooge asked if there would be a written employment offer. Gillwood replied it could provide one but didn’t.
On Aug. 6, 2011, Hooge’s supervisor informed him he was being laid off indefinitely and his last day of work would be Aug. 12. Hooge asked when they planned on calling him back and was told there were no plans. Gillwood provided Hooge with an ROE indicating the reason was “shortage of work” with an unknown date of recall.
Hooge sought legal advice and informed Gillwood he considered the indefinite layoff to be a fundamental breach of the employment contract and hence a constructive dismissal, so he would be filing a claim for damages.
A month later, on Sept. 19, Gillwood called Hooge and told him they had reworked the schedule and needed him to manage the mill. It also sent him a letter stating “there was never an intent to terminate you.” Hooge considered the offer and decided it was an attempt to avoid paying him severance. He rejected the offer and Gillwood sent him an ROE that stated Hooge had quit.
The court found there was nothing to suggest there was a term of the employment contract that provided for layoffs of the mill’s employees and Hooge clearly “did not accept the layoff.” It also found that while B.C.’s Employment Standards Act discusses the allowed length of temporary layoffs, it “appears to be qualifying employment agreements in which the right to lay off already exists.” Since Hooge’s employment contract did not allow layoffs, his employment was terminated — and wrongfully so since no notice or pay in lieu was given.
Since Hooge remained in continuous employment through the mill’s ownership changes and Gillwood didn’t tell its employees that it wouldn’t recognize their prior service, the court considered Hooge to have 36 years of service at the time of his termination. This, along with his position and age, entitled Hooge to 18 months’ notice, said the court.
