'You can't just leave an employee hanging without any work - that's a recipe for a constructive dismissal'
A worker without a written employment contract who was removed from the worksite after four months at the request of a contractor has been awarded constructive dismissal damages equal to two months’ pay by a British Columbia court.
“Written employment contracts can add a lot of value and help avoid a wrongful or constructive dismissal litigation like this one, and it would have been a bit more clear on what the entitlement was for a worker who was dismissed,” says Nicole Toye, an employment lawyer and commercial litigator at Harris and Company in Vancouver.
The worker had a long career in the logging, mining, and oil and gas industries. He was friends with the owner of CAS Ventures, a construction contractor based in Smithers, BC.
In 2019, CAS was hired by a company called Kyah Resources, which was a sub-contractor on the Coastal GasLink pipeline, a natural gas pipeline in northern BC. CAS was tasked with supplying a crew for clearing work along the pipeline’s right-of-way.
The owner of CAS asked the worker in January 2019 to work as a faller on the pipeline. The worker agreed and underwent one month of training. He started work on the pipeline on Feb. 14.
However, after one month on the pipeline, the worker decided to quit as he didn’t like working with some of Kyah’s employees and he felt he was getting too old for falling work – he was in his late fifties at the time.
Removal from worksite
The owner suggested that the worker replace CAS’ recently departed site supervisor instead, as it was physically easier to do and had more regular hours. The worker was reluctant but agreed because he was friends with the owner and didn’t want to quit. The worker started his new duties on March 18, supervising 10 CAS labourers who supported Kyah’s heavy machine operators.
Each morning, Kyah provided instructions to the CAS labourers in a safety meeting and the worker oversaw their performance. However, on April 24, a Kyah supervisor emailed CAS’ owner and the worker about corrections to the worker’s field tickets and the worker’s conduct in the Kyah office, asking the worker to “not let your frustrations build up and get upset for the wrong reasons.”
About three weeks later, CAS’ owner forwarded some complaints the worker had about certain Kyah employees, including allowing CAS workers to operate heavy machinery for which they weren’t certified and treating a crew member as if he were the supervisor rather than the worker.
The next day, May 14, Kyah informed CAS that it wanted the worker removed and excluded from the worksite immediately. On May 16, CAS’ owner emailed the main contractor about the difficulties between the worker and Kyah, saying it was a “he said/she said” situation that might require an investigation.
CAS’ owner asked the worker to be patient while he tried to resolve the situation, so the worker was left with no work and no pay. He felt he had been treated unfairly on the pipeline worksite, which put him in an emotional state unfit to apply for other work. He also felt harassed by Kyah employees and his exclusion from the worksite was unjustified and hadn’t been formally explained to him.
Not dismissed but not working
Over the next month, CAS’ owner inquired as to any “legitimate reasons” for the worker’s exclusion from the worksite. According to Kyah management, the worker was combative, unreliable, had leadership shortcomings, and was argumentative and intimidating towards Kyah employees.
CAS was put in a difficult situation because it hired the worker for a specific project from which he was banned by the contractor, and this was aggravated by the absence of an employment agreement, says Toye.
“It sounds like it was an informal [agreement], maybe because the owner of CAS had a relationship with the [worker] and it was done as a ‘handshake,’ informal arrangement,” she says. “There wasn't any contractual provision dealing with termination of employment, or what it would look like if the project ended, or if work wasn't available on that project.”
In November, the worker made an employment standards claim against Kyah for constructive dismissal, claiming termination pay for length of service under s. 63 of the BC Employment Standards Act (ESA) based on 10 months of expected employment.
Record of employment
After some back-and-forth communication between the worker, Kyah, and CAS, the worker requested a record of employment (ROE) from CAS in November when it became evident that he wouldn’t be getting his job back. The ROE stated that the reason for issuance was “shortage of work/end of contract or season,” which the owner felt was the least prejudicial reason possible.
The worker found new employment on April 1. According to him, he wasn’t in the right state of mind to find another job before then because of his perceived mistreatment on the pipeline.
The worker’s employment standards claim for termination pay was dismissed, with the employment standards delegate noting that s. 63 of the ESA didn’t apply to the worker because he hadn’t been laid off or terminated, but he was unable to perform work due to a decision that was beyond CAS’ control.
The worker sued CAS for constructive dismissal and sought six months’ salary plus aggravated damages for alleged bad faith in his termination.
CAS applied to have the suit dismissed because the employment standards decision dealt with the same issues, but the court disagreed, finding that the scope of the delegate’s decision was limited to ESA entitlements and didn’t cover common law reasonable notice entitlement stemming from constructive dismissal.
The court found that the worker was constructively dismissed when he was excluded from the worksite and, despite the efforts of CAS’ owner to reinstate him, the exclusion led to the termination of his employment without formal notice. Even if the worker’s exclusion was justified, CAS asked him to wait while it tried to get him back to work – the company didn’t terminate his employment but it didn’t pay him, the court said in finding that the worker was entitled to two months’ salary as reasonable notice.
Constructive dismissal
“Once the contractor said that it didn’t want the worker onsite, [CAS] didn't have any other work available, so he was held out of service without any work or compensation for an extended period of time,” says Toye. “Ultimately, that amounted to a repudiation of the employment contract, and the court found that the worker was constructively dismissed as of the day that they held him out of service.”
The court didn’t find evidence of bad faith on the part of CAS, noting that the decision to exclude the worker was made by Kyah and CAS made reasonable efforts to advocate on the worker’s behalf. There was no evidence that CAS acted in a high-handed or unfair manner, said the court in dismissing the claim for aggravated damages.
“If [CAS] had had other work available for the worker, there might have been a solution, but the challenge here was that they brought him on to work on this specific project,” says Toye. “Despite the employer's best efforts, they weren't able to address the problems [with the contractor], and you can't just leave an employee hanging without any work or compensation - that's a recipe for a constructive dismissal, and if you haven't gone to the effort of entering into a written employment contract, then the common law principles of reasonable notice apply.”
The court also noted that the worker was unemployed until April 2020 due to his frustration over the circumstances surrounding his exclusion. Although the delay in searching for new employment wasn’t due diligence on the worker’s part, there was no evidence on whether he would have found something had he acted more reasonably that might justify decreasing the notice entitlement, said the court.
CAS was ordered to pay the worker two months’ salary, equal to $24,000, in damages and dismissed the claim for aggravated damages.
This case involved the kind of litigation that can be avoided with some diligence by the employer on the front end of the employment relationship with an employment agreement, according to Toye.
“If an employer is in a situation where it doesn’t have work available for somebody, it’s certainly constructive dismissal if that person is held out of service indefinitely and their compensation stops - and it’s very likely to result in a repudiation of employment,” she says. “It's a good risk mitigation strategy to get ahead of that and deal with somebody on the front end in terms of what they would be entitled to receive upon termination of employment.”
