Resignation clause not binding without consideration for change in employment terms
An Alberta employer must pay wrongful dismissal damages after it deemed a worker on medical leave to have resigned when he didn’t return to work when the employer expected him to.
“Managing a return to work following an injury like this can be very daunting and it’s critical to obtain sufficient detail about the employee’s restrictions and limitations so an appropriate return to work plan and modified duties can be arranged,” says Stephen Torscher, a labour and employment lawyer at Carbert Waite in Calgary. “Communication and documentation of those conversations is also very important.”
The worker drove commercial trucks for Recycling Worx Inc. (RWI), a waste management company in Calgary. He was hired in 2017 as a full-time Class 1 driver, but he didn’t have a written employment agreement.
In August 2019, RWI distributed a new employee handbook that contained a resignation clause stating: “Employees are considered to have resigned from the company if they are absent for more than three consecutive working days without contacting the office.” The worker signed the handbook, acknowledging that he had reviewed it.
On Oct. 8, the worker fell off a truck while trying to remove a tarp, breaking his collarbone. He took two weeks off to recover while receiving workers’ compensation benefits. He returned to modified duties, which involved riding with another driver and clerical work. In December, the worker and RWI agreed to target a return to his full-time pre-accident duties by the end of January 2020.
In early January 2020, the worker was late for work three times. He was cited for discipline for the three incidents.
On Jan. 9, the worker accepted an offer of modified work to perform clerical work at his pre-accident wage rate for two weeks. However, the worker felt he was given menial tasks and didn’t like the work.
The next day, the worker complained of bullying and harassment from other employees since his accident. RWI conducted an internal investigation that found his allegations to be unsubstantiated.
On Jan. 20, the worker’s psychologist wrote a letter stating that the worker needed a two-week medical leave. The psychologist later extended the medical leave “until further notice.” The worker was again granted workers’ compensation benefits.
In June, RWI forwarded a Facebook post showing the worker offering truck driving services to the workers’ compensation case manager who was handling the worker’s case.
A month later, the worker’s wage replacement benefits were terminated and RWI made a formal offer of modified work doing yard cleanup until Sept. 15 – a physiotherapist assessment report estimated that date as when the worker would be able to perform pre-accident work.
The worker didn’t sign the offer of modified work because he found yard work “tedious and unrealistic.”
Estimated return to regular duties
A doctor assessed the worker in early August and noted that the worker still had physical limitations, but he agreed with the estimated date of Sept. 15 for pre-accident work. On Aug. 14, the worker said he had been cleared for driving duties and asked to have a helper with him until he was cleared for full duties.
RWI replied that the earlier modified work offer was still open, but it couldn’t provide him with a helper because there wasn’t one available. It also said that simply being able to drive wasn’t enough to meet his pre-accident duties, as drivers had to climb and pull tarps.
The worker didn’t accept the modified work offer and remained off work.
The worker didn’t report for work on Sept. 15, nor did he report on either of the next two days.
The worker’s legal counsel sent RWI a letter on Sept. 18 with the August doctor’s assessment and requested that the worker be reinstated to his original driver position by Oct. 1. Also on Sept. 18, RWI sent the worker a letter confirming that it accepted his resignation under the employee handbook’s resignation clause when the worker failed to report to work for three days from Sept. 15 to 17.
Wrongful dismissal action
The worker filed a wrongful dismissal action and applied for summary judgment. RWI maintained that he had resigned from his employment by not attending work for three days without calling the office. The company also argued that it was entitled to terminate the worker’s employment for absenteeism.
The Alberta Court of King’s Bench determined that the matter was appropriate for summary trial, given the evidence available and the fact that neither party objected to it.
The court noted that the onus was on RWI to show that the resignation clause in the handbook was binding. Although the worker had acknowledged the clause and the handbook, it was not binding because it was ambiguous as to what “considered to have resigned” meant. It wasn’t clear if employment immediately ended or it provided an option for RWI to terminate based on the resignation, said the court.
The employee handbook was also not binding because it fundamentally changed the worker’s common law rights with respect to the employment relationship. Such a change requires fresh consideration for the employee, of which there was no evidence, the court said.
“In order to alter the terms of an employment contract, especially when an employer seeks to implement terms that would be onerous to an employee or take away some rights or benefits, the employee must agree to those changes and be provided with fresh consideration for those changes -some benefit must flow to both parties,” says Torscher.
Return date not confirmed
The court added that, even if the resignation clause applied, RWI was unable to prove that the three days the worker missed were working days. There was an expectation earlier in the year that the worker would be ready to return to pre-accident duties on Sept. 15, but this was based on an estimate and there was no further medical evidence clearing the worker to work, the court said, adding that neither RWI nor the worker communicated to confirm if the worker was ready to return.
“[RWI] was unable to satisfy the court that the employee missed three consecutive working days,” says Torscher. “It seems there still was not a clear agreement on the terms of the employee’s return to work - it’s hard to conclude that the employee was absent for work when it wasn’t clear when he was supposed to be at work.”
The court also found that the worker’s reinstatement request proved that the worker didn’t subjectively or objectively intend to resign and instead wanted to return to his regular position. No reasonable employer would have understood the worker to have resigned, the court said.
The court found that the worker’s absences were not misconduct that struck at the heart of the employment relationship, so there was no cause for dismissal. The worker’s lack of communication was “questionable,” but a reasonable employer would have inquired about his recovery before taking action. Nor would a reasonable employer respond to the reinstatement request with the resignation acceptance letter, said the court.
“It seems [RWI] didn’t clearly articulate its expectation that the employee must return to work by a certain date,” says Torscher. “The conversations around the employee’s modified duties appeared to be ongoing or, at the very least, the employer didn’t clearly set out what it expected.”
Just cause difficult to prove
Just-cause terminations based on absenteeism can be difficult to prove, adds Torscher.
“The [worker] didn’t have a history of absenteeism and there was no indication that his being away from work was related to false pretenses,” he says. “There was still some uncertainty about the employee’s ability to work and what restrictions may still remain in place, and there was no clear, direct order for the employee to return by a certain date.”
Since the worker didn’t resign and RWI didn’t provide notice of termination, the court determined that the worker was wrongfully dismissed. Given the worker’s age of 54 at termination and his three years of service, the court determined that 2.5 months’ notice was appropriate.
RWI was ordered to pay the worker $11,250 in damages for wrongful dismissal.
Torscher says that managing disabilities and a return to work is difficult, so it’s important for employers to maintain communication with the employee to understand medical restrictions so appropriate modified duties can be offered.
“[Employers] are not entitled to information related to an employee’s diagnosis, but they are entitled to medical information sufficient to understand the restrictions and limitations of an employee so that appropriate modified duties and a successful return to work can be planned,” he says, adding that employers should be prepared to show their work. “If the employer is going to deny an accommodation that is suggested by the employee, the employer should be able to show why it is not appropriate, bearing in mind the high burden imposed by the law to show that such accommodation could not be provided without undue hardship.”