Employers can't contract out of employment standards legislation

New Brunswick employer's attempt to punish employee for resigning without notice understandable but not legal, says labour and employment board

An employment contract that required a worker to give 14 days’ notice of resignation or forfeit any remaining pay was ruled void by the New Brunswick Labour and Employment Board.

Although the case involved a very small damage award, it underscores the fact that employers can’t contract out of employment standards legislation.

Deborah LeBlanc began working as a salesperson for Gifts for All Occassions in Fredericton’s Regent Mall on Jan. 12, 2005. She was given a navy polo shirt, which she was to wear to work and for which the employer deducted $15 from her wages.

The resignation

LeBlanc continued to work until Jan. 20, 2005. On that day she reported for work but was sent home because of a snowstorm. She never returned to work. On Jan. 21 a letter bearing his signature was delivered to the employer. It read:

“Regretfully, I am submitting by notice of immediate termination of employment with your store. Although meeting you and working with you was a pleasure I will be unable to continue my employment with Gifts for All Occasions as I am not comfortable selling adult gifts, I find that it is not economically to my advantage to find funds for transportation to and from the mall and I have recently been diagnosed with severe (medical) problems that will mean that I need time off for doctor’s visits.

“I thank you for the opportunity to know you and to work in your store for a short period of time. Enclosed please find the set of store keys and the store shirt that you entrusted to me. I wish you success in the future.”

Subsequently, LeBlanc requested payment of the wages owing for her last three days of employment and related vacation pay totaling $149.10.

Employer refuses to pay

The employer refused to pay the wages, relying on an employment contract LeBlanc signed on Jan. 4. The relevant part of the contract reads:

“The employer covenants and agrees that he or she will faithfully, honestly and diligently serve the employer as employee/salesperson…

“This employment contract shall end on the 31st day of December, 2005.

“Provided that such services may be terminated by either party hereto giving to the other party fourteen (14) days notice in writing.

“In the event the employee does not provide to the employer the said fourteen (14) days notice, the employee hereby forfeits any wages owing to the employee including vacation pay.”

The board’s decision: Employer’s clause reasonable, but not legal

The board considered two basic issues:

•Did the employment contract permit the employer to withhold wages where the employee failed to give 14 days’ notice?

•Is the employer obliged to return the $15 deducted from the employee’s wages for the returned polo shirt?

The board said s. 30 of New Brunswick’s Employment Standards Act prohibits the employer from terminating an employee without giving that employee two weeks’ notice where the employee has been employed for less than six months.

It said the employer’s attempt to force the employee to give 14 days’ notice was a case of “what is sauce for the goose, is sauce for the gander.”

“Certainly such a provision seems reasonable on its face and one can readily understand why the employer would want to penalize an employee who suddenly leaves the employer short staffed,” the board said. “However, s. 37 of the act requires payment of a former employee’s wages, once the employment relationship ends, by the end of the next pay period.”

The board said the section is clear and does not allow exceptions. Section 4 of the act further prohibits employers and employees from making an agreement violating the terms of the statute.

“Unfair as it may seem, the legislation is an attempt to balance the economic power of the employer and non-bargaining employee,” the board said.

Deduction for the T-shirt

LeBlanc was provided with a T-shirt which she wore for three days when she worked. She washed it and returned it to her employer when she stopped working for Gifts For All Occasions.

There was no written authorization for the $15 deduction from her wages for the cost of the shirt.

“It is worth noting that if there is a written authorization, it must be clear and explicit,” the board said. “The only evidence came from LeBlanc, who indicated that the deduction of $15 was presented to her when she received her first paycheque as a fait accompli. There was no evidence to suggest any discussion of the deduction.

Nonetheless, deductions from employee wages are permitted where the employee has enjoyed a clear economic benefit and the employee has orally agreed to the deductions, the board said.

But in this case there was no economic benefit to LeBlanc by wearing the employer’s T-shirt for three days.

The board’s ruling

The board ordered the employer to pay LeBlanc wages of $141.75, vacation pay of $7.35 and $15 for the unauthorized deduction for the T-shirt for a total of $164.10.

The employment contract

Below is the majority of the text of LeBlanc’s employment contract as reproduced in the New Brunswick Labour and Employment Board’s decision:

This agreement made the 4th day of January, 2005.

The Employee covenants and agrees that he or she will faithfully, honestly and diligently serve the Employer as a employee/salesperson in the Employer's business of retail sales, and that he or she will devote his or her whole time and attention to such employment during working hours, and for the duration of this contact.

The hours of employment shall be set by the Employer from week to week.

In consideration of such service, the Employer covenants and agrees to pay the Employee the sum of $6.50 dollars per hour worked, on a weekly basis during each week that the Employee shall remain in the Employer's service, which shall begin on the 12th day of January, 2005.

This employment contract shall end on the 31st day of December, 2005.

Provided that such service may be terminated by either party hereto giving to the other party fourteen (14) days notice in writing.

In the event the Employee does not provide to the Employer the said fourteen (14) days notice, the Employee hereby forfeits any wages owing to the Employee including vacation pay.

The Employee will be solely responsible for any cash float assigned to him or her. Shortages will be calculated on a weekly basis, and any shortage of $5.00 or more will be deducted from the Employee's wages. It is the responsibility of the Employee to take every precaution to prevent a cash shortage. The foregoing shall not prevent the Employer from taking such corrective and/or disciplinary action as it deems appropriate in cases of unreasonable shortages either in amount or frequency. Disciplinary action will result from the Employee's possession of any cash float that is not assigned to that Employee.

The Employee hereby agrees to return any keys in his or her possession within twenty-four (24) hours of the last day of employment. In the event the Employee does not return his or her key as required by this agreement, then the Employee shall be responsible for all costs associated with re-keying the locks at any premises for which he or she has a key. The Employee agrees that any such costs shall be set off and deducted by the Employer from any amounts owing to the Employee.

For more information see:

LeBlanc v. Spito Inc., 2005 CarswellNB 351 (N.B. Labour & Employment Bd.)

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