Housing supervisor is shown the door

Supervisor claimed he was set up; non-profit employer claimed budget cuts

This instalment of You Make the Call looks at a dispute over the severance entitlement of an employee.

William Fox, 55, worked for 13 years for Silver Sage, a non-profit housing corporation in Regina. Over the course of his employment, he moved up from the position of manager of the maintenance department to housing supervisor, which included managing both the maintenance and client services departments. He signed an agreement that he would follow Silver Sage’s Personnel Regulations, which stipulated notice of termination, or pay in lieu, was to be made in accordance with applicable labour standards.

In 2002, Fox became the acting general manager until a new one was found. He signed another acknowledgement of the Personnel Regulations, similar to that which he had signed when he was initially hired.

After the new permanent general manager was hired, Fox began having problems with him. Fox felt the new manager was undermining his authority as housing supervisor. In September 2004, Silver Sage restructured its management positions. Fox was still the housing supervisor, but his responsibility was only to the client services department. Fox became worried because the budget for client services was much small than the maintenance department, from which he had been paid before the restructuring.

In December 2004, Silver Sage advised staff that a position in the client services department would be eliminated due to budget cuts. Fox, feeling the administrative changes were instituted as a way to get rid of him, met with the chair of the board of directors to request a severance package. The chair told him no decision on who to cut had been made yet and Fox responded by saying he had “secrets that could bring the corporation down.”

One week later, on Dec. 10, 2004, the chair recommended to the board that terminating Fox would save Silver Sage the most money and help it meet its budget. The board agreed and terminated Fox on Dec. 14. Fox was informed his termination was the result of budget cuts and he was paid two days for each of his 13 years of service plus a five-day bonus, totalling 31 days of pay, or $6,481.60, as allowed under the minimum labour standards and according to the Personnel Regulations. He was also given two weeks’ pay in lieu of notice.

You Make the Call

Did Fox receive an appropriate amount of severance based on Silver Sage’s policy?
Was Fox entitled to a longer notice period?

If you said Fox was entitled to a longer notice period, you’re correct. The court found the original employment letter Fox signed when he started with Silver Sage could not be considered a binding contract for notice period. An employee just starting with the company, the court said, would see the policy as a guideline and not a binding agreement to limit himself to a particular notice period. In the absence of a specific contract, the court also found the policy couldn’t reasonably be seen as binding an employee of 13 years to the minimum notice. As a result, it ruled Fox should be entitled to a notice period established by the common law.

The court found an employee with Fox’s years of service, age and managerial status should be entitled to 12 months’ notice, including bonuses.

The court also found the restructuring moved Fox to a department where Silver Sage knew his salary couldn’t be covered in its budget. Given the general manager did not get along with Fox and Fox wasn’t given any indication he was not performing the duties of housing supervisor satisfactorily before the restructuring, the court found the position changes were orchestrated to get rid of Fox.

Despite Silver Springs’ bad faith in the restructuring, the court didn’t award bad-faith damages because Fox didn’t provide evidence he suffered damages from the manner of his dismissal, as is now required. See Fox v. Silver Sage Housing Corp., 2008 CarswellSask 511 (Sask. Q.B.).

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