Tourism exec was on maternity leave when employer closed down; trial court’s ruling that her lawsuit to get severance pay was just cause overturned by appeal court
The executive director of a British Columbia tourism organization was constructively dismissed when the organization closed up shop and terminated her position while she was on maternity leave, the B.C. Court of Appeal has ruled.
Jennifer Lewis started working for the Tourism Terrace Society of Terrace, B.C., in May 2004. In late 2006, she went on maternity leave with the expectation she would return to work in January 2008. The society hired an interim executive director to replace her.
However, two weeks after Lewis went on her leave, the society’s funding was cut by the city and it began having significant financial difficulties. It commenced a plan to reduce costs, laying off the interim executive director and removing the position’s signing authority on its bank accounts.
In February 2007, the society voted to close the office and website and stop its operations. As a consequence, the executive direction position was terminated.
The society recognized it owed severance to Lewis and began negotiations with her, but it didn’t offer anything right away. In March 2007, Lewis sued for wrongful dismissal in Small Claims Court and the society then terminated her employment for just cause because of her lawsuit. Lewis responded with a larger wrongful dismissal/constructive dismissal lawsuit against the society.
The B.C. Supreme Court found Lewis had not been constructively dismissed when she was let go as part of the society’s wind-up operations and the original suit constituted just cause for dismissal, since the society intended to give her a severance offer but Lewis didn’t give it a chance with her “pre-emptive strike” in the courts.
The B.C. Court of Appeal disagreed, finding Lewis was entitled to reasonable notice of dismissal regardless of the fact she was on maternity leave. The court pointed out the B.C. Employment Standards Act protects an employee from being dismissed with notice while on leave. However, the society didn’t give Lewis any notice of termination and didn’t offer any severance pay.
The Court of Appeal also found Lewis didn’t repudiate her employment contract by filing the lawsuit, but instead it was the society who repudiated it by not offering her severance right away. Lewis was allowed to assert her legal rights and if an employee couldn’t assert her legal rights without a risk of a that action itself causing a repudiation of the employment contract, it would create a trap for employees in which it would be difficult to pursue legal action.
“The society effectively dismissed (Lewis) and repudiated her employment contract when it took steps to cease business and terminate the position of executive director without providing notice,” said the Court of Appeal. “Its intention to offer her severance sometime in the future did not keep the contract alive. (Lewis) was entitled to sue the society for wrongful dismissal.”
For more information see:
•Lewis v. Terrace Tourism Society, 2010 CarswellBC 1783 (B.C. C.A.).
