Worker had 'obligation to approach mitigation with more focus or ambition'
“It’s the luck of the draw when going to court on a wrongful dismissal case – you might get a judge that says 22 months, another might say 18.”
So says Trevor Thomas, co-founder and partner at Ascent Employment Law in Vancouver, after the British Columbia Supreme Court awarded damages equal to 17 months’ pay to a worker who was wrongfully dismissed after 35 years of service.
Dunsmuir Holdings operates the Jolly Miller Pub and Liquor Store in Chilliwack, BC. It hired the worker, now 59, to be a clerk at the liquor store in April 1987. The worker was promoted to manager of the store around 1990, although she had no written employment contract.
Over time, the worker and her spouse became friends with Dunsmuir’s owner and his spouse. From 2013 through 2020, the owner paid for the worker and her husband to fly to Mexico.
A colleague of the worker was a clerk at the store from 1995 to 2001. She returned in 2006 and began handling the weekly Liquor Distribution Board (LDB) order. In early 2020, the worker asked the owner if she could take over the LDB order, to which the owner agreed with the intention that she would share the task with the colleague.
In June 2021, the colleague told the owner that she was considering leaving. To encourage her to stay, the owner gave her full responsibility for the LDB order and promoted her to co-manager.
The worker was upset at this development. The next morning, the colleague showed up and the worker became upset, calling the colleague a “backstabber” and other names.
The worker went home and called the owner, complaining that he had effectively demoted her. A short time later, the owner held a meeting and explained that their duties would be divided and they each reported only to him.
However, things remained tense and the worker had to take one-month medical leave in February 2022. When she returned, she became upset after the owner approached her to discuss the tension in the workplace and she had to take another sick leave after one week. A week later, the owner offered her another week of paid sick leave.
Employers would be well-advised to include enforceable termination clauses in written employment agreements, according to an HR lawyer.
Discussions to end employment
On March 21, the owner offered to lay off the worker so she could collect employment insurance (EI) and he would top up the benefits with payments to her husband’s business. They discussed other options, such as six months’ wages plus two more trips to Mexico if she took early retirement, but the worker declined and wanted to return to work on March 29.
The worker reported to work on March 29, but the owner gave her a termination letter and said he had an HR specialist on the phone as a witness. The termination letter provided for eight weeks’ severance pay and offered an additional 32 weeks, but the worker didn’t accept the offer.
The worker felt betrayed and depressed. She didn’t feel that she was able to look for a new job until late June and she had limited computer skills. She hadn’t applied for a job in 35 years, so she dropped off resumés at 13 liquor stores in the area. She didn’t apply to any online job openings until November and sent short emails with no resumés to job search websites.
The worker applied to 32 jobs and received three interviews with no offers.
The worker sued for wrongful dismissal plus aggravated and punitive damages for the owner misleading her about the colleague’s plan to leave, requiring her to not come into work before she was terminated, suggesting an illegal offer to pay severance to her husband’s company, and conducting the termination in an insensitive manner by allowing a third party on the phone.
Assessing reasonable notice is an art not a science, and there are no formulas to follow, says an employment lawyer.
Longer notice period
The court noted that the worker’s lengthy service, lack of updated skills or training, and age pointed towards a longer notice period.
The court also found that there were similar jobs in private liquor stores in Chilliwack and previous decisions with similar circumstances awarded notice periods of around 18 months. The court determined that the appropriate notice period was 20 months.
Although the worker had 35 years of service, the court didn’t feel that the established maximum notice award of 24 months was appropriate in this case because, although the worker held a managerial position, it wasn’t a high-level one with anyone reporting to her, says Thomas.
“I think the judge actually did a pretty good job of taking all the factors in consideration and made a reasonable assessment,” he says. “In order to make a reasonable assessment, you have to look at historically what the court has [decided] in the past, and so that's how it came up with 20 months rather than 24.”
The court also determined that the worker didn’t make adequate efforts to mitigate her losses. Her job search was “random and haphazard” and she didn’t try to learn how to search and apply for jobs online, said the court. She didn’t follow up with stores where she dropped off her resumé and she didn’t include cover or reference letters on many applications, the court added in reducing the notice period by two months.
Some employers may confuse statutory notice entitlements with common law reasonable notice, says an HR lawyer.
Time to adjust
The worker wasn’t penalized for not starting her job search for three months – courts have recognized that employees who are fired after lengthy employment need time to adjust to the change – but the worker’s efforts after that weren’t reasonable in the circumstances, says Thomas.
“She'd been out of the workforce and hadn't applied for jobs in 30-odd years, and she didn't have up-to-date skills in interviewing or making applications,” he says. “But she had an obligation to approach the mitigation with a bit more focus or ambition.”
“The way that people find jobs [now] is online, so if you don't know how to utilize that technology, you probably need to take steps to understand how to use it right,” adds Thomas. “[The worker] really needed to do more to show the court that she had that desire to find work and she was willing to put in the time and energy needed to find her next job.”
The court also determined that, since the notice period went beyond the trial date, the worker could find another job before it ended. It further reduced the notice entitlement by an additional month as a contingency, leaving it at 17 months.
An Ontario court decision challenged the unofficial 24-month cap on notice periods with a 26-month award.
No bad faith
The court disagreed that the manner of dismissal was in bad faith. The owner did not mislead the worker, he didn’t require the worker to stay home before her termination – the worker accepted his offer of an extra week of paid sick leave – and the proposal to pay a top-up to the husband’s company was one of several options discussed. It was also reasonable to seek the advice of an HR specialist for the termination, said the court. In addition, the court noted that Dunsmuir offered a total of 40 weeks’ severance, not just eight, but the worker refused the offer.
Having an HR specialist on the phone during the termination was a smart move, according to Thomas.
“Sometimes a business can't afford to have legal counsel or an in-house HR person with them, but I think it's always a benefit to have some kind of HR input at the time of termination, just to walk you through the process and make sure that you're doing things correctly,” he says.
Dunsmuir was ordered to pay the worker 17 months’ pay in lieu of notice minus the eight weeks already paid, with no aggravated or punitive damages.
Things might have been a little simpler had there been an employment contract in place, says Thomas.
“The best-case scenario would have been that they had an employment contract in place that capped the amount of severance that the [worker] would be entitled to, and that would avoid the litigation altogether,” he says. “You terminate the employee and then you would have none of this back-and-forth about how much you owe them – all you'd have to do is follow the contract.
“This is why you have contracts in place that have a termination clause so that you don't have to go through these types of situations.”
See Cadrin v. Dunsmuir Holdings (New Westminster) Ltd., 2023 BCSC 130.