Who is the true employer?

Penelopia Macovei was hired to be the resident manager of a 48-unit apartment building in New Westminster, British Columbia (the Agnes Street property). The property was owned by 353276 Alberta Ltd., which, in turn, was owned by Domtex Investments Ltd. The property was managed, pursuant to a property management agreement, by Rancho Management Services (B.C.). It was Rancho that hired Ms. Macovei on Jan. 1, 1993, and it was Rancho who terminated Ms. Macovei’s employment on June 23, 1998.

In response to the termination of her employment, Ms. Macovei brought a claim against both Rancho and Elizabeth Atmore for wrongful dismissal and defamation. Ms. Atmore is a director and officer of Domtex and the only one to reside in British Columbia. The claim was brought against Ms. Atmore personally because it was she who directed Rancho to terminate Ms. Macovei’s employment. Ms. Macovei was not represented by counsel in bringing this claim.

Ms. Atmore brought an application seeking dismissal of the claim against her personally. In addition to a general denial of the claims against her, Ms. Atmore argued that she was neither the owner of the Agnes Street property nor was she the employer of Ms. Macovei.

The property management agreement that was in place between Domtex and Rancho stated that Rancho was to provide property management services to the Agnes Street property. The agreement placed all responsibility for hiring and firing decisions with Rancho, in its “absolute discretion.”

In determining Ms. Atmore’s application, the Court stated that Ms. Macovei’s claim as against Ms. Atmore for wrongful dismissal must fail if Ms. Atmore was not her employer. The fact that Ms. Macovei’s employment agreement was between Rancho and Ms. Macovei did not necessarily end the issue. The Court must look to see where effective control over the employee resided to determine who is the true employer.

In this case, Ms. Atmore, in her capacity as a director of Domtex, exercised some measure of direct control in the management of the Agnes Street property and over Ms. Macovei directly. Ms. Atmore had attended Ms. Macovei’s final employment interview. Ms. Atmore was introduced to Ms. Macovei as the owner of the Agnes Street property. Ms. Atmore inspected the property and she dealt with tenants’ complaints.

It was Ms. Atmore who directed Rancho to terminate Ms. Macovei’s employment, which they did. This was indicated in the termination letter which read, “As instructed by Ms. Elizabeth Atmore, ...your duties as resident managers for the above noted property will be terminated...”

Although there was no requirement in the property management agreement that Rancho fire any of its employees at Domtex’s direction, Ms. Atmore did concede that if Rancho had not done so as directed, Domtex would have dissolved its agreement with Rancho. This implies a measure of direct control over Ms. Macovei, as it is the exercise of a controlling authority outside the terms of the contract between Rancho and Domtex.

Based on these facts, the Court dismissed Ms. Atmore’s application to dismiss the claim against her personally and ordered that the matter proceed to trial.

As there was no evidence that Ms. Atmore made defamatory statements about Ms. Macovei, the action in defamation against Ms. Atmore personally was dismissed.

The Court permitted the action for wrongful dismissal against Ms. Atmore to proceed. It observed that Ms. Macovei may have had a claim against Ms. Atmore based on the inducement to Rancho to breach its contractual relationship with Ms. Macovei.

Given that Ms. Macovei was proceeding without legal representation, the Court made an order permitting Ms. Macovei to amend her claim to include a claim against Ms. Atmore for inducement of a breach of contractual relations between Ms. Macovei and Rancho, to include a claim against Domtex for wrongful dismissal and an order joining Domtex as a defendant to the action.

For more information:

Macovei v. Atmore, 2001 BCSC 1017.

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