'It's important that communications be drafted in a way that's abundantly reasonable'
A BC worker resigned from his employment and was not dismissed after a series of communications that began with confusion over his status but then clarified that the worker was not fired, the BC Supreme Court has ruled.
The circumstances involved some quintessential back-and-forth communication that can happen when things start to go sideways in an employment relationship, says Richard B. Johnson, co-founder and partner at Ascent Employment Law in Vancouver.
“Things escalate over time and the communications naturally become more acrimonious,” says Johnson. ““What was found here is [the worker] voluntarily left - he could have done a better job in terms of not ratcheting up the acrimonious communication.”
Lumberwest Building Supplies is a company that operated a building supply and lumber yard in Surrey, BC. Lumberwest was just getting started in early 2020 when it recruited the worker from his existing job at another building supply company to be a lumber and supplies salesperson.
The worker had an employment contract that was effective June 23, 2020, with an expected start date of Sept. 1. However, the worker didn’t join Lumberwest until December after he left his other job.
Termination clause
The agreement included a termination clause that allowed Lumberwest to terminate for cause by written notice for “failure to perform or observe any of the provisions of this agreement where such failure is not cured within 30 days of written notification…” It could also terminate “not for cause” by giving the worker written notice of termination and “annual salary in monthly installments. Divided by the remainder of the contract value.”
The agreement was for a fixed term of three years expiring Aug. 31, 2023.
A few months later, the owner became more involved in Lumberwest’s daily management due to others going on leave. Around the same time, the worker felt that his working conditions were deteriorating and the company had insufficient inventory, making it difficult to do his job.
According to the worker, the owner told him in April that he was looking at winding down the company. The owner’s version was that he mentioned having to restructure the company due to the staff departures and suggested that the worker become a partner, but the worker declined.
The worker disenchantment grew, as he felt he was losing customers and turning away new ones. In June, the worker sent multiple emails to the owner stating his concerns over Lumberwest’s operations and his stress over the uncertainty. Not getting a satisfactory response, he finally sent an email on July 7 saying that he felt the owner was deliberately trying to sabotage his reputation with his customers.
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Performance issues
According to the owner, there were problems with the worker’s performance. Many of his customers were exceeding their credit limits and not paying on time, customers were complaining about him not returning their calls, he wasn’t completing administrative tasks on time, and he was showing an unwillingness to take direction and address his performance issues.
The owner sent emails to the worker outlining his work schedule, a requirement to provide a weekly summary report, and other rules.
On Aug. 4, the owner sent an email to the worker stating that it was “the third warning… regarding your duties, work time schedule and daily sign in/out” and his failure to provide a weekly summary report. He added that if the worker didn’t follow directions, Lumberwest would have the right to terminate his employment agreement for cause.
One week later, on Aug. 11, an email from the owner stated that Lumberwest had provided “enough warning,” but the worker had not followed the terms of the agreement. It said to “consider this as our 30 days written notice to terminate our employment services agreement.”
The next day, the owner sent another email saying that he continued to refuse instructions and a report he sent the previous week didn’t meet the criteria set out in the instructions. It referred to the Aug. 4 email and the need to improve.
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Worker believed he was dismissed
The worker believed that Lumberwest terminated his employment with 30 days’ notice, so he didn’t take the Aug. 12 email seriously. He didn’t try to clear up the confusion over the Aug. 12 email but rather had his lawyer send a letter on Aug. 19 that indicated his understanding that his employment was terminated.
Lumberwest replied with two emails and a letter from the owner stating that Lumberwest did not intend to terminate the worker’s employment, but rather to provide 30 days for the worker to address the performance concerns. The owner suggested he return on Oct. 1, but was willing to discuss other dates, reiterating that “we want you to remain part of the team.” The company was willing to compensate him for any lost salary.
“What [Lumberwest] did right was to reiterate that the employment could continue, the door was open for continued discussion if there were concerns, and that they expected the employee to do his work,” says Johnson. “It's really important that communications be drafted in a way that's being abundantly reasonable - you don't want to be providing the employee with any cause to think that there's a hostile work environment or that they're being treated unfairly.”
The worker didn’t respond, taking the position that he had been given notice of termination. He continued to work through what the 30-day notice period until Sept. 10.
On Sept. 20, the worker returned to his previous job at another lumber company.
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Wrongful dismissal action
The worker brought a wrongful dismissal action claiming damages for termination without cause equal to his pay for the balance of the employment contract. Lumberwest countered that the worker was not terminated and instead resigned from or abandoned his employment.
The court noted that it was well-established that both a dismissal by an employer and a voluntary resignation by an employee require “a clear and unequivocal act” that objectively ends the employment relationship.
The court found that the Aug. 11 letter stated that it was providing 30 days’ notice of termination, but it could not be considered in isolation. Along with the other two emails in August 2021, there was confusion, said the court.
However, the court also found that any confusion was eliminated the following month after the worker’s lawyer wrote to Lumberwest. The company sent three pieces of communication to the lawyer that consistently stated that Lumberwest was not terminating the worker’s employment, clarified the August emails, and proposed a return date with compensation for lostpay. At that point, it wasn’t reasonable for the worker to take the position that he was dismissed without cause, the court said.
In addition, the court found that the worker clearly resigned by abandoning his employment. He did not report for work after Sept. 10, 2021, and did not respond to Lumberwest’s communications. He also immediately started working for his old employer, said the court in dismissing the worker’s action.
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Path to continue employment
The central issue was whether or not there was any clear, workable path for the employee to continue his employment without just walking off the job, says Johnson.
“The Supreme Court of Canada changed the landscape for constructive dismissal with Evans v. Teamsters Local Union No. 31, [2008 SCC 20], a case stands for the principle that you can't just walk off the job without really clear reasons, because you have a duty to mitigate your damages,” he says. “So you can't just walk off the job unless it's unsafe in certain instances where you relate your concerns - [the worker] here probably felt like he was bringing his concerns, but enough was enough.”
“But [an employee] needs to be very careful that they don't leave without it being an absolute clear indication from the employer that they're not going to change, that they're acting unreasonably, or that they're creating a hostile or acrimonious workplace,” adds Johnson.
Johnson notes that had Lumberwest not come out on top in this decision, it could have faced significant liability because of the fixed-term contract.
“If constructive or wrongful dismissal was proven, there was a huge amount of time left in the term,” says Johnson. “Whereas you could have just had a severance clause that says in the event of a without-cause termination, you will get employment standards minimums or some other formula - it's a cautionary tale for employers, just to be mindful of their fixed-term contracts.”
