Change in ownership did not reset service time for calculating notice

Patterson v. Boudreau Sheet Metal (1999) Inc., 2004 CarswellNB 98, 2004 NBQB 99 (N.B. Q.B.)

Francesca Patterson worked for 21 years as a bookkeeper for a company that, two years after being transferred to a successor corporation owned by the previous owner’s son, terminated her employment.

The new company had, from its outset, experienced financial and managerial problems. The new owner told Patterson it was a very difficult decision, but that his bank had insisted he hire a certified accountant to replace her. He admitted in court this was a fabricated excuse and he simply didn’t have the “backbone” to fire her.

He further conceded he had no complaints with Patterson’s work and she performed the duties of more than one employee. Patterson was paid two weeks’ wages in lieu of notice.

In ruling on Patterson’s claim for damages, the Court of Queen’s Bench of New Brunswick was emphatic that Patterson had not been dismissed for cause. She had always been a good and valued employee; she “wore many hats” and performed multiple assignments; she had consistently been rewarded with bonuses; and she had never been reprimanded or advised that her work performance needed to improve. Indeed, a controller and a secretary had subsequently replaced her.

The onus of proving cause for dismissal rests with the employer, and Boudreau Sheet Metal had clearly not met that onus, ruled the court.

The only other issue before the court, then, was what damages Patterson should be awarded and how long her length of employment was with the restructured firm. Boudreau claimed the sale of the business from father to son in 1999 created a new date for calculating the length of employment.

The court ruled there had clearly been no break in Patterson’s employment — she remained at the same office and used the same equipment and software; her salary and benefits remained unchanged; and unlike the unionized employees, she was not given the option of terminating her employment with the former employee and accepting a position with the new one.

In addition records of employment required by Human Resources Development Canada (now Human Resources and Skills Development Canada) were filled out for the unionized employees, but none were completed for Patterson.

“The only noticeable change was a trivial amendment to the company logo, new letterhead and invoice headers,” noted the court. “It is therefore appropriate to calculate the years of service… in accordance with her entire employment history.”

The court took a number of factors into effect in determining the notice period. Patterson had not completed her high school studies when she had moved to Moncton in 1977 with her husband. She had started her career as a general secretary, taking on payroll duties and later other bookkeeping duties.

When the company underwent downsizing, she remained one of the few full-time employees and her work assignments and responsibilities had increased accordingly. In the two years before being terminated she averaged $33,876 in employment income. She was 47 when she was dismissed and was devastated as a result. She became depressed and suffered from anxiety and sleeplessness.

The court determined that Patterson was to be awarded appropriate notice of 18 months’ salary, or $48,860, plus interest and court costs of $4,875.

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