Statutory pay in lieu of notice different from common law wrongful dismissal damages: Court
Worker’s compensation benefits received by a Saskatchewan employee during her notice period should not be deducted from her statutory notice entitlement, the Saskatchewan Court of Appeal has ruled.
Janine Peesker was a warranty administrator and service writer for Auto Gallery, an automobile dealership and service centre in Regina. On Dec. 3, 2008, after seven years of service, Peesker’s employment was terminated.
Peesker filed a complaint to the Saskatchewan Labour Standards Branch claiming she was dismissed without cause. The complaint was accepted and she was awarded a wage assessment for pay in lieu of notice totalling $9,450.89.
Auto Gallery appealed the decision since Peesker had received $2,887.29 in workers’ compensation benefits from Dec. 3 to Dec. 31, 2008, after she was fired. She was receiving the benefits because the Saskatchewan Workers’ Compensation Board (WCB) had found she was unable to work because of depression. The benefits were equal to 60 per cent of what Peesker’s earnings would have been for the month. Auto Gallery argued the WCB payments should be deducted from the pay in lieu of notice, much as any income from other employment would be, but a labour adjudicator disagreed.
Auto Gallery took the case to the Saskatchewan Court of Queen’s Bench, which found the principles of mitigation applied to common law actions for wrongful dismissal but not statutory entitlements such as minimum notice periods, unless there were any specific provisions for reductions.
Auto Gallery appealed once again, this time to the Saskatchewan Court of Appeal, pointing out previous cases where WCB benefits were deducted from wrongful dismissal awards and it was established that double recovery by the employee should be avoided. The employer argued the principle should be the same for both wrongful dismissal damages and statutory pay in lieu of notice as both presented the prospect of double recovery without deductions.
The Court of Appeal found common law damages and statutory entitlements were different and therefore different principles should apply. The intention of the statutory entitlement was to ensure employees were paid all wages due to them while workers’ compensation legislation was designed to give benefits to workers injured in the course of employment, said the court. These intentions were “legally distinct,” said the court, and should be treated differently. There was no provision in employment standards legislation for the deduction of external compensation earned by the employee during the statutory notice period.
