Milder discipline option not in employment contract acceptable

The B.C. Court of Appeal has overturned a lower court’s ruling in a constructive dismissal case where a salesperson was disciplined in a manner not specified in her employment contract

Sinclaire v. Intrawest Resort Ownership Corp., 2005 CarswellBC 14, 2005 BCCA 10, 37 C.C.E.L. (3d) 226 (B.C. C.A.)

The British Columbia Court of Appeal has overturned a lower court’s ruling in a constructive dismissal case where a salesperson was disciplined in a manner not specified in her employment contract. The lower court ruled it was constructive dismissal, but the Court of Appeal ruled the discipline did not meet the criteria for constructive dismissal.

Laara Sinclaire was a salesperson for Intrawest Resort Ownership Corp. She was required to sell a timeshare to at least 11 per cent of the customers brought in by the company. In April 2000 her performance fell to 8.3 per cent. She received some assistance from her supervisor but in July and August her sales figures were 10.3 and 8.1 per cent respectively.

At a Sept. 2, 2000, meeting Sinclaire was given two options: take a 10 week leave of absence or receive a warning letter giving her three weeks to get to 13 per cent or be fired. She was to be brought back in December, when sales picked up. Three other salespersons below the sales mark were given the same offer.

The warning letter was in line with procedures outlined in the sales handbook which formed a part of Sinclaire’s employment agreement. She had a right to challenge disciplinary actions she thought unfair or inappropriate.

Sinclaire became upset but accepted the leave of absence. On Sept. 15 the four sales staff were asked to sign a letter outlining the details of the absence. Sinclaire again became upset and did not sign. She left the meeting without clarifying her position. The other three signed, took the leave of absence and returned to work on Dec. 15.

Sinclaire filed an action for wrongful dismissal. Intrawest continued to hope she’d return to work in December. It confirmed this by letter and Sinclaire was also told that by the company president with whom she had a chance meeting.

The lower court judge concluded Sinclaire was constructively dismissed on Sept. 2 because the leave of absence was not an option allowed by the employment contract. The alternative, a letter stating she’d have to increase her sales within three weeks or be fired, was excessive for a first-time warning, ruled the court.

On appeal the court reversed this decision. Intrawest’s acts do not amount to a repudiation of the essential obligations of the employment contract. Sinclaire’s poor sales justified some sort of disciplinary action.

The leave of absence was a good-faith attempt to assist long-term salespersons who were struggling. It was intended to be a more favourable alternative than the progressive discipline called for by the contract. It was an option outside the terms of the employment contract which Sinclaire didn’t have to accept as an alternative to the discipline under the contract, the court ruled.

It rejected the trial judge’s ruling that the warning letter was inconsistent and excessive. In any case the warning does not meet a key test for constructive dismissal because at most it was a threat of future dismissal contingent on future unsatisfactory performance.

The court ruled Sinclaire had not been constructively dismissed and that she must be regarded as having voluntarily left her employment.

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