Change in role, salary decrease, move to seasonal work all significant changes to employment
An appeal body of the Alberta Labour Relations Board has confirmed an order for an employer to pay a worker statutory termination pay after the worker’s position and compensation were substantially changed.
The worker was general manager at a concrete plant in the Edmonton area who was hired in 2017. His compensation included a salary, benefits package, and a company vehicle. Although the plant wasn’t winterized and stopped producing concrete during the winter, the worker’s position was a full-time, year-round role.
The worker’s job duties included paperwork, providing quotes to customers, and directing drivers to pick up loads of concrete for customers. When the plant shut down in the winter, most employees were laid off, but the worker continued to work, directing remaining drivers to pick up concrete for customers from third-party providers.
In July 2019, the concrete plant and its assets were purchased by Certified Redi-Mix Concrete Group (CRM), which continued the worker’s employment with the same position and compensation package.
On Dec. 24, CRM advised the worker that he was being laid off for about one month while the company performed maintenance work on the plant’s trucks. However, the layoff was extended until April 1, 2020.
CRM immediately instructed the worker to train a new employee who had been hired to do office work and to give the employee his cellphone and laptop computer. The worker was told that he would receive a new cellphone, but this didn’t happen.
Employers should be aware of which changes can be made safely to an employee’s contract.
Removed from general manager role
On June 23, CRM advised the worker that he was not going to be the plant’s general manager any longer and it wanted him to work as a driver – which would involve a significant drop in compensation and usually involved seasonal work. The worker took a leave of absence and, while still off work, advised that he was rejecting CRM’s offer to be demoted.
On Aug. 7, the worker filed an employment standards complaint requesting statutory termination pay in lieu of notice and vacation pay.
Three months later, an Alberta employment standards officer issued an order for CRM to pay the worker two weeks’ termination pay in lieu of notice under the Alberta Employment Standards Code (ESC) – more than $4,600 – vacation pay, and an “order of officer” fee, for a total award of more than $8,000.
CRM appealed the order for termination pay, arguing that the worker was a seasonal employee and was not entitled to notice of termination under the ESC. It also suggested that, in the alternative, the worker quit his job before any changes were made, so there was no constructive dismissal.
The appeal body noted that the ESC exempted employees who were employed on a seasonal basis from termination pay when they were terminated at the end of the season. However, the worker had never been a seasonal employee and CRM did not formally advise him that he was a seasonal employee.
A worker acted too soon when he claimed constructive dismissal following temporary changes to his job duties and location, the BC Supreme Court has ruled.
Plant fully operational
The appeal body also found that the notice of the worker’s change in duties and compensation did not occur at the end of seasonal employment – it happened in June when the concrete plant was in full operation. As a result, the worker was not a seasonal employee and any exemption from termination pay under the ESC did not apply, said the appeal body.
Looking at the changes, they involved a dramatic change to the worker’s duties and a substantial change to his compensation, said the appeal body, adding that changing his employment from full-time to seasonal was also significant. These all constituted substantial changes to the essential terms of the worker’s employment contract, resulting in constructive dismissal and the worker’s entitlement to notice of termination or termination pay in lieu of notice, the appeal body said.
The appeal body referred to the Supreme Court of Canada’s definition of constructive dismissal in Farber v. Royal Trust Company, [1997] 1 S.C.R. 846, which stated that a “fundamental or substantial change to an employee’s contract” that violates the contract’s terms breaches the contract to the point of termination. In such circumstances, the employee is entitled to consider themself constructively dismissed.
The appeal body determined that the employee was correct in concluding that the essential terms of his employment contract were being substantially changed, causing him to be constructively dismissed without just cause. It confirmed the employment standards officer’s order for termination pay in lieu of notice and vacation pay.
See Certified Redi-Mix Concrete Group v. L’Hirondelle, 2022 CanLII 79247.
