Inducement warranted increased period of notice: court
A British Columbia employer must pay a worker with two-and-a-half years of service 12 months’ pay in lieu of notice because it induced the worker to leave a secure position with few comparable jobs, a BC court has ruled.
The worker was a chemical engineer who was hired by Catalyst Paper Corporation to work at a pulp mill in Duncan, BC, in 1992. Over time, he was promoted to higher positions and eventually became an operations specialist for the bleach plant and digester area at the mill. He reported directly to the mill manager.
By 2018, the worker, who was 53, planned to remain at the Catalyst mill until he retired at 61. He felt that he was overworked and underpaid, but he felt secure in his job, despite some worries that the mill might shut down before he retired.
In January 2018, a recruiter for Mercer Celgar Limited Partnership, a company that operated a pulp mill in Castlegar, BC, contacted the worker about a job at its pulp mill. The job was that of fibreline manager and was a step up from the worker’s current position with Catalyst.
Worker recruited
The worker exchanged emails and was invited to tour Celgar’s facility and meet with senior management. They told him that the Celgar mill had a good fibre supply, the benefits were better than at Catalyst, the company hired for the “long term,” and they asked him how long he was prepared to commit to Celgar. The worker replied that he could commit to five years, or more if he enjoyed the job.
The tour was followed by a dinner and several nights at a hotel in Castlegar. Celgar reimbursed the worker for all travel expenses.
The worker then took online aptitude tests at Celgar’s request.
Celgar made a formal offer of employment to the worker on March 13. However, the position offered was not the one that had been discussed, but was instead was that of operations specialist, the same position the worker had at Catalyst. The manager of human resources said that the original job description had been a mistake and the position had always been considered to be operations specialist.
The base salary and vacation time were almost exactly what the worker had at Catalyst, with slightly better pension benefits. It wasn’t enough to convince the worker to leave Catalyst, so he declined.
Employer sweetened job offer
After some discussion among management, Celgar made another offer to the worker with the same terms but with a higher salary. There was no probationary period or a termination clause, as Celgar viewed it as a long-term hire.
The worker accepted the second offer and left Catalyst to begin working for Celgar in April 2018. In the summer of 2018, he purchased a property closer to Castlegar and started building a house. That September, he fell from the roof and fractured several vertebrae in his back and neck. He was off work for several months.
During the worker’s medical leave, Celgar trained a younger employee to fill his role. The worker gradually returned to work in February 2020 and was close to 100 per cent by the summer.
However, on Sept. 22, Celgar terminated the worker’s employment without cause as part of a downsizing. The Castlegar mill had received a corporate directive to reduce staff and the mill by a significant number and 15 people were let go. Celgar initially paid the worker eight weeks’ salary in lieu of notice and later made additional payments that brought his severance up to five months’ salary.
The worker sued for wrongful dismissal, claiming additional damages because Celgar induced him to leave his existing long-term employment with the expectation of long-term employment with it.
Inducement
The BC Supreme Court noted that for inducement warranting an increased period of notice, there must be “some evidence of representation by the employer creating an expectation or reliance interest at the time the contract is made.”
During the discussions the worker had with Celgar, it was not an equal interest, said the court, pointing out that Celgar reached out to the worker and the worker was not actively looking for alternate employment. In addition, Celgar tried to make the job look attractive to the worker during the visit to the facility, including statements that Celgar was better than Catalyst and the company was hiring for the long term and a query on how long the worker was prepared to commit to Celgar, the court said.
“[The worker] reasonably believed that he was being offered an opportunity to potentially end his career with Celgar, in a position which although identical to the one he was leaving, offered greater job satisfaction, and considerably better remuneration and benefits,” said the court.
The court noted that, normally, the five months’ salary that Celgar paid as termination pay would have been appropriate. However, Celgar induced the worker to join its staff, which warranted an increase to the notice period, it said.
Lack of mitigation unproven
The court found that the worker held a senior, non-management position with Catalyst and there were few comparable positions available. He earned the position through years of work in the business, where he gained particular expertise but no management experience. At his age, it was unlikely that he would be considered for a management position that required grooming, the court said, adding that available jobs for similarly qualified engineers in the field would be a step down.
The court determined that the worker was entitled to 12 months. Although Celgar argued that the worker failed to mitigate his losses from the termination – the worker reached out to industry contact by email and applied to his first job five months after termination – the company didn’t provide evidence that he missed out on any equivalent employment that was available when he wasn’t actively looking.
Without evidence or inference from other evidence that the worker’s minimal efforts caused him to miss out on comparable employment, Celgar failed to meet its onus to prove that the worker failed to mitigate, said the court.
Celgar was ordered to pay the worker a total of 12 months’ pay in lieu of notice, with no deductions for a failure to mitigate. See Ferweda v. Mercer Celgar Limited Partnership, 2024 BCSC 844.
