You make the call
This instalment of You Make the Call features an Alberta school employee who demanded constructive dismissal damages reflecting her 12 years at the school, two months after a new owner took over.
Jacqueline Owens was a pre-school teacher hired in 2006 by Copperfield Preschool in Calgary. She worked as a teacher for five years until she was promoted to manager of the school in 2011.
On Jan. 30, 2018, Copperfield was sold to Xiaman “Savannah” Li as a purchase of business assets. As part of the purchase agreement, Copperfield’s original owner was responsible for all employees, including severing their employment, while Savannah Li acquired the school’s assets.
The school informed Owens of the sale on May 17, providing written notice of termination as of June 1 that stated Savannah Li would be issuing a new employment contract on that date “so you won’t [lose] any income or hours].” The letter added that it was a formality of the sale process and Savannah had assured the selling owner that she would still be employed and Savannah Li would meet with each employee to “discuss your roles and contracts, so these can be in place before June 1, 2018 transfer.”
On June 1, Owens signed a written employment agreement that was on the letterhead of Copperhead Preschool and stated the director was Savannah Li. She continued to work at the school until June 21, when it closed for the summer. The next day, the school issued two records of employment (ROE): one from the original owner stating the reason for issuance was “change of ownership” and showing earnings up to May 30, with the second from Savannah Li showing earnings from June 1 to 21 and stating the reason for issuance as being “shortage of work/end of contract or season.”
Savannah Li sent Owens an offer of employment for the following school year on Aug. 4, but there were significant changes with which Owens wasn’t satisfied. However, Savannah Li said she couldn’t change the offer.
Owens responded on Aug. 21, saying she was giving two weeks’ notice that she was resigning her employment as manager of Copperfield Preschool. She also stated that she had spoken to Alberta Employment Standards and she believed she had “a good claim against you and Copperfield Preschool for ‘constructive dismissal,’” because Savannah Li had assumed all contracts when she purchased the school, including “severance pay for the 12 years I worked at the preschool.”
Was the worker owed termination pay for her time of service with the school?
OR
Was the workers’ service time with the school irrelevant to her entitlement?
If you said the worker was not owed termination pay reflecting her 12 years of service, you’re right. The court found that the sale was a purchase of business assets rather than a transfer of the business. Although Owens had a long-standing employment contract with Copperfield Preschool, this was with the original owner and was clearly terminated effective June 1, 2018, with notice provided two weeks earlier. In addition, Owens signed a new employment contract with the new owner, Savannah Li, on June 1.
The court noted that the school’s previous owner didn’t specifically raise the issue of Owens’ past service, it was the one that terminated her employment — the reasonable notice obligation was its responsibility.
“Nothing could have been clearer that [Owens’] obligation was over, and the [original owner] had no entitlement to pass on any obligation to [Savannah Li],” the court said. “[Owens] was afforded the option of entering into a new contract with [Savannah Li] and that is exactly what she did.”
The court found that the agreement Owens entered into with Savannah Li on June 1, 2018 was for an indefinite term and Owens was constructively dismissed when Li provided significantly different terms on Aug. 4 and refused to budge from them when Owens objected. However, Owens was only entitled to damages equivalent to two weeks’ wages in lieu of notice due to the short term of the contract with the school’s new owner.
Savannah Li was ordered to pay Owens $1,265 for constructive dismissal.
For more information, see:
- Owens v. Copperfield, 2020 ABPC 39 (Alta. Prov. Ct.).
