Declining reinstatement offer reduces unjust dismissal damages

B.C. employer's re-employment offer after wrongful dismissal was reasonable way to eliminate damages

Declining reinstatement offer reduces unjust dismissal damages
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A British Columbia worker was unjustly dismissed, but she was awarded only six weeks’ pay as damages since she declined what an adjudicator found was a reasonable offer of reinstatement from the employer.

Lin Bai began working with the Tsay Keh Dene Nation on Sept. 8, 2015 as a finance officer at the First Nation’s business office in Prince George, B.C. The following year, she was promoted to the position of senior finance officer and trained two new finance officers who were subsequently hired in 2017. Bai effectively served as a supervisor to the new finance officers following their training.

Bai applied for the position of finance manager when it became available, but she was unsuccessful because she failed a test as part of her bid for the job. The Tsay Keh finance department remained without a finance manager until April 2018, when the executive director appointed another senior finance officer to the role. At the same time, Bai’s job description was updated and she received a pay raise equal to that of the new finance manager.

Bai had a good working relationship with the new finance manager, but eventually things became more acrimonious between them. Bai believed the new finance manager was taking away some of her job duties and behaving rudely toward her. The finance manager felt Bai was being insubordinate and sometimes refused to do the tasks she was asked to do.

Worker not happy with small changes

On June 11, 2018, the finance manager sent an email to the finance department saying she would be the one to release cheques — essentially initialling cheques for release once they had been signed. It was a task that Bai normally did, though it was minor and took only about 15 minutes per day. The finance manager indicated that she was taking this task over because she wanted to be kept “in the loop.”

At a meeting between them four days later, Bai criticized the manager’s angry facial expressions and said she was “acting like a manager.” Later, the manager asked Bai to take over some work with a retail company owned by Tsay Keh as part of a cross-training initiative the First Nation was doing with its employees, but Bai felt it was beneath her position and suggested she could help one of the regular finance officers do it. Bai then completely refused when the manager couldn’t provide her with an end date for the assignment.

On another occasion, Bai agreed to change an employee’s payroll deduction by consolidating two accounts receivables into one. The manager told Bai she didn’t have the authority to make such a change — even the finance manager didn’t.

On July 19, Bai told the manager she disagreed with a change in the location of the file room to the executive director, who felt Bai acted disrespectfully and informed the finance manager. Two days later, the manager issued a verbal warning to Bai stating that Bai’s recent behaviour was “unacceptable” and her contrary and unprofessional behaviour was causing tension in the finance department. The manager then began documenting and observing Bai.

Bai didn’t think she deserved a verbal warning and filed a complaint against the manager. The Tsay Keh human resources department investigated the complaint and determined that it was retaliation for the verbal warning.

Acrimonious relationship continued

The following month, the manager informed the finance department that she would receive and distribute all mail for the department. It was another task that Bai had previously performed, but management was expecting a large cheque and wanted to know immediately when it arrived. The same day, Bai and the manager had an altercation over a recently implemented policy on issuing cheques, during which each thought the other had acted rudely.

Bai reported the incident to the executive director, who determined that Bai had been given an opportunity to change her behaviour after the warning but had failed to do so. He decided that Bai was destroying the work relationship and terminated her employment effective Aug. 17. At the same time, the finance manager — who was unaware of the termination decision — was feeling stressed about how things were going and considered quitting her job.

Bai was paid two weeks’ pay in lieu of notice and two weeks’ severance pay. Tsay Keh offered her another two weeks’ pay if she signed a “full and final release,” but Bai declined to sign and made a complaint to the Canada Industrial Relations Board under the Canada Labour Code, alleging constructive dismissal from changes made to her position — including the request to work for the retail company owned by Tsay Keh, changes in responsibilities for releasing cheques and distributing the finance department’s mail — and bullying and harassment by the finance manager that created a toxic work environment.

Tsay Keh denied it had contravened the code and informed the board that it was willing to reinstate Bai to her position at the same rate of pay. However, Bai declined the offer of reinstatement and accepted another job on Sept. 29, just more than one month after her dismissal. She instead sought compensation for lost wages for up to two years, noting that her new job was temporary.

The adjudicator found that the changes to Bai’s position were relatively minor. The duties related to the retail company were part of an initiative on cross-training employees that many were involved with, and Bai’s refusal to perform those duties was apparently not based on her concern that it fundamentally changed her position but rather the fact that the finance manager couldn’t confirm the duration of the assignment.

As for the cheque releasing and mail distribution, this task was a small part of Bai’s job duties that took up only a small part of her workday. In addition, the finance manager had a legitimate reason for taking it over as she wanted to keep informed on cheque releases and incoming mail, said the adjudicator.

The adjudicator also found that while there was dysfunction in the working relationship between Bai and the finance manager, it was not serious enough to reach the point where there was “serious wrongful behaviour” that created a toxic work atmosphere contributing to constructive dismissal.

In addition, the adjudicator noted that there was no indication the decision to terminate Bai’s employment was related to the complaint she made against the manager. However, although Bai had received a verbal warning, it was too much of a jump to dismissal for her behaviour toward management. As a result, there was no cause for dismissal, said the adjudicator.

Federally regulated employees cannot be dismissed without cause under the Canada Labour Code. Since Tsay Keh had no cause for dismissal, the adjudicator determined that her dismissal was unjust.

The arbitrator found that the offer of reinstatement was reasonable and “would have effectively resulted in no employment related disadvantage for Ms. Bai” had she accepted. As a result, Tsay Keh was ordered to pay Bai compensation for lost wages from her dismissal on Aug. 17, 2018 to the date she officially declined the offer of reinstatement on Sept. 30 — a total of six weeks. As Tsay Keh had already paid Bai four weeks’ pay for dismissal, it was ordered to pay her an additional two weeks’ pay and benefits.

For more information see:

Bai and Tsay Keh Dene Nation, Re (June 30, 2019), Doc. YM2707-11450 (Can. Lab. Code Adj.).

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