Employee wanted to negotiate severance package
An Alberta company must pay an overseas employee almost $150,000 for accepting a resignation that wasn’t really a resignation.
Matthew Carroll, 45, was hired in 2008 by Purcee Canada, a small Calgary-based company that supplies electrical, communication, and mechanical products and services to the energy, mining, and oil and gas industries. Carroll was appointed operations manager, which involved sales and business development and helping Purcee’s day-to-day business. He didn’t have a written employment contract.
In late 2009, Purcee learned of a business opportunity with a nickel mining project in Madagascar. Carroll travelled to Madagascar to explore the opportunity and went back several times, eventually getting a five-per-cent commission on gross profit from sales in the region, though again a written agreement wasn’t drawn up.
By September 2010, Purcee’s business with the project had increased and it asked Carroll to work full-time in Madagascar. Carroll agreed to move there with his wife and two-year-old daughter, but insisted they live on the island of Mauritius, which was several hours by plane from Madagascar but safer for his family.
Purcee’s business in Madagascar went well initially, and Carroll usually worked in Madagascar for weeks at a time, returning to Mauritius for a few days every few weeks.
In May 2011, a consulting company advised Purcee to incorporate in Mauritius and enter into an employment agreement with Carroll to make things easier for Carroll’s occupancy permit. The consulting company drew up a generic employment contract that Purcee and Carroll signed without discussion and was for two years, stating Carroll’s salary and five-per-cent commission, plus living expenses for his family.
By late 2012 the construction phase of the mining project was wrapping up, so Purcee’s business was declining. Purcee wanted better results, but Carroll felt the owners were ignoring his suggestions.
On Aug. 9, 2012, Carroll submitted his written resignation and asked for a fair severance package. Purcee refused to accept and recommended Carroll and think over a two-week holiday about a proposal to allow him to continue his work in Madagascar. Carroll submitted a business proposal on Sept. 17 outlining a transition to servicing the mining project’s operations.
Purcee didn’t respond until February 2013, when itindicated it didn’t see business efficacy in it. Communication between the parties were strained after that.
On May 31, Carroll responded to a request for a list of project business to be completed during the year by stating his terms of severance. A few days later Carroll told one of the owners that he planned to move his family back to Canada in July and he would be ready to discuss the matter “in a couple of days.”
On June 7, Purcee determined Carroll had resigned and provided him with one month’s salary, commissions, and return airfare for him and his family.
Carroll sued Purcee for wrongful dismissal, but Purcee argued Carroll voluntarily resigned from his employment and refused to continue working in Madagascar.
The court found that both parties knew eventually Carroll would return to Canada, particularly since his daughter was scheduled to start school in the fall of 2013. The position in Madagascar wasn’t intended to be permanent, but no term was discussed. However, there was also no discussion about Carroll returning to work in Calgary, and Carroll didn’t mention this until the end, said the court.
In addition, the court found Purcee didn’t make any “overtures to terminate Mr. Carroll’s employment.” Rather, it was Carroll who initiated discussion over severing the employment relationship.
However, the court also found Carroll’s mention of resignation came from “a place of upset and frustration” over the company’s failure to accept his proposals. When he indicated he would be moving back to Canada, it wasn’t a declaration of resignation as he said he would be ready to discuss things in a couple of days — consistent with someone wanting to continue the relationship.
In addition, the court noted each time Carroll mentioned resignation, it came with an offer to negotiate a severance package – there was no specific date of resignation and Purcee didn’t try to discuss the terms.
“(Carroll’s) resignation was not clear and unequivocal, but rather an invitation to discuss the terms of his exit from (Purcee) and in any event, the employer purported to accept his resignation on completely different terms,” the court said.
The court also found Carroll performed his job duties up until the date Purcee accepted his resignation. As a result, it couldn’t be argued he abandoned his employment.
The court determined Carroll was dismissed without cause. The employment contract had no termination clause, so Carroll was entitled to common law notice. Since he held an important position with a large amount of autonomy and had been away from business connections in Canada, the court found Carroll was entitled to seven months’ reasonable notice. His salary, commissions, and expenses for the notice period were calculated at $147,701.50. See Carroll v. Purcee Industrial Controls Ltd.,2017 CarswellAlta 516 (Alta. Q.B.).
