Forced resignation equals dismissal (Legal view) <!-- sponsoredarticle -->

Canadian Tire worker awarded 11 months’ pay

A Saskatchewan worker’s resignation was coerced and he was actually fired, the Saskatchewan Court of Queen’s Bench has found.

Stewart Schwindt worked at a Canadian Tire store in Regina for more than 20 years. After a three-year hiatus in the 1990s, he was asked by the new store president, Neil Sulkers, to return to be the service manager of the automotive department.

Schwindt’s employment proceeded uneventfully for the next seven years, until Sulkers became concerned with his performance and began monitoring him. Sulkers asked him for a business plan with suggestions to control wage costs and profit margins, but Schwindt failed to come up with one.

However, Sulkers actually had another plan in mind. During the time he was monitoring Schwindt’s performance, he had found another store employee to replace Schwindt. Shortly after, Sulkers called Schwindt into his office on Oct. 31, 2003.

Schwindt was handed a piece of paper that stated he was resigning and was told it would be best to sign his name. The paper read:

“To whom it may concern, effectively (sic) immediately I would like to submit my resignation, Oct. 31, 2003, from Canadian Tire #275. Sincerely, Stew Schwindt.”

Visibly upset, Schwindt scribbled his signature and was immediately escorted off the store’s premises by another employee. However, Schwindt had not agreed to resign and believed his employer had acted improperly. He filed a wrongful dismissal suit.

At trial, Sulkers argued Schwindt had resigned by signing the letter or, alternatively, Schwindt’s failure to produce a business plan when asked to do so permitted Sulkers to terminate Schwindt without pay.

However, even though Schwindt had signed the letter, it could hardly be said he had voluntarily resigned. He had been pressured to sign his name and, in such circumstances, the purported resignation was really a termination, the court found.

Further, the judge bluntly rejected the argument that failure to develop a business plan was a valid reason to fire him without pay. Considering Schwindt was a long-term employee who had done his job without any problems until near the end, the court found this was just a ruse to give Sulkers an excuse to replace Schwindt.

Taking into consideration Schwindt’s seven years of service, the court awarded him nine months’ salary in lieu of notice. It also felt Sulkers’ treatment of Schwindt in terminating him was in bad faith and worth damages of an extra two months’ salary. The award of 11 months, after subtracting Schwindt’s income from a new job during the nine-month period after he was fired, equalled $37,126.

“As a valued employee, (Schwindt) should not have been placed in the unworkable situation of having to sign a letter of resignation or be terminated,” the court said. “In addition to the actual dismissal, it was obviously very humiliating and frustrating for Schwindt to have been escorted from the store without the opportunity to retrieve his personal items from his office.”

The Schwindt decision shows how Canadian courts are loath to uphold a resignation proffered under circumstances of pressure or an ultimatum and instead will usually find the employee was fired.

However, employers can take a number of other important lessons from the decision:

Assert cause for dismissal intelligently and only where serious misconduct can be proven. The judge swiftly dismissed the allegation that Schwindt’s conduct precipitated his dismissal.

Don’t rely on poor performance to terminate employees or provide them with insufficient severance if it can’t be proven. Schwindt’s employment record showed no dissatisfaction with his performance, which was inconsistent with the employer’s arguments at trial.

Handle terminations with caution. As in this case, Canadian courts will chastise employers’ bad-faith behaviour by awarding damages in excess of the normal value of the claim.

For more information see:

Schwindt v. Jann & Neil Sulkers Ltd., 2007 Carswell Sask 259 (Sask. Q.B.).

Daniel A. Lublin is a Toronto employment lawyer practicing in the law of wrongful dismissal. He can be reached at [email protected] or visit www.toronto-employmentlawyer.com.

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