Share on LinkedInTweet about this on TwitterShare on FacebookShare on Google+

Wrongful Dismissal

I have a written employment contract. Does it set out all my rights?

Probably not.

Whenever an employment relationship exists between an employer and an employee, BC law provides that the relationship is governed by a contract, even if nothing is written down.

A contract is simply a bargain between two parties. Even if no part of the bargain is set down in writing, our law would find enforceable obligations on the part of both employer and employee. Many such obligations are “implied” merely by reason of the relationship. An example is the obligation on the part of the employer to give reasonable advance notice of termination if no “just cause” exists. This is a term that is implied into every employment relationship unless there is a specific agreement otherwise.  Even then, such an alternative agreement might not be enforceable, which would again lead to an inference that the employee is entitled to reasonable notice.

Even if an employment agreement is written, the implied terms that our law prescribes remain, unless expressly superceded by written terms. Written terms of employment agreements would normally supercede implied terms, however even written terms of employment agreements are sometimes not enforceable. Employment in British Columbia is governed by certain provincial and federal statutes which prescribe minimum rights of employees. The BC Employment Standards Act, the BC Human Rights Code, and other similar statutes provide employees with certain “statutory rights” which protect employees, regardless of the provisions of written employment agreements.  Attempts to provide less than those minimum amounts are legally unenforceable.

I’ve been offered a severance package. Should I accept?

This is a question that cannot be answered without knowing a considerable amount more detail. Your rights depend on the terms of your employment contract, the employer’s motivations in your termination, and other factors. Normally, any severance package should properly include an amount of money in a lump-sum to put you in the same position you would have been if you had been given reasonable working notice, rather than fired without notice. This depends of course of the terms of your specific agreement, and any implied terms which are not superceded by a written contract.

The amount of the severance package should compensate you for all losses, which would include salary, amounts paid to replace benefits that were cancelled, often, an amount to compensate you for any bonus you would have earned during the notice period, an amount to compensate you for the loss of enhanced pension benefits from not being able to continue to work, losses from failure to have additional stock options vest, and a longer period to exercise options, and other similar losses. In addition, your severance package should include amounts due to you for your service up to the date of termination, including bonus for prior periods, commissions earned for sales made while working, an amount to compensate for vacation not taken, and the like.

The best advice is that you should call us in order to be sure you fully understand your rights before accepting a severance package.

My boss is trying to make me quit. Is this a “Constructive Dismissal”? What should I do?

This is one of the most difficult situations to address properly.  We would encourage you to call us right away if this is happening to you.

Unfortunately, some employers, perhaps knowing their financial obligations to employees in the event of termination, attempt to make working conditions unbearable so employees will leave voluntarily. They refrain from firing an employee, to try to reduce notice period damages, because they do not believe they have just cause for dismissal, or are unsure about being able to prove just cause.   If an employee leaves voluntarily, he or she might be deemed to have quit and would not have a claim for wrongful dismissal damages. Employers might give unfair negative performance reviews, or demote an employee to a lesser job, or assign tasks to an employee that are plainly unreasonable. Some employers might try to minimize their financial costs by driving employees to resign.

This creates a real challenge for employees. Employees need to be very careful in these circumstances. Employees should be careful not to refuse “lawful orders” from employers, or risk being found to have been “insubordinate” or to otherwise have given cause for termination. The employer’s conduct could be characterized as a “constructive dismissal” but the employer’s conduct could also be deemed supportable or justifiable if a trial occurs, in which case the employee’s refusal might be seen as a “quit” or “voluntary resignation”.

This is an area where employees really need to understand their legal rights before acting, or risk being found to have “quit”.

I am working on a short term contract, but my contract has been renewed frequently. Does the written short term contract govern?

Short term employment contracts are often given full effect by courts. Normally, at the end of a short term employment contract, the parties need to agree to extend the terms, or the agreement ends. Sometimes, employment continues after the expiry of such an agreement. If so, the employment would likely be regarded as employment for an indefinite period, rather than a fixed one.  In this case, the agreement would have an implied term requiring reasonable notice to lawfully terminate it.

Also, if an employee is hired on a short term employment agreement, and the parties routinely extend the agreement each time it is set to “expire,” a court might find that the contract is superceded by an overriding agreement requiring reasonable notice.

Further, if the employer and employee enter into a series of many new short-term contracts in a row over a long time period, a court might find that the true nature of the relationship was one of indefinite employment requiring reasonable notice of dismissal despite the contrary language of the contracts that were signed.  Assessing these cases requires a detailed examination of all the circumstances.

I want to quit and start up a competing business – can I safely do so? What restrictions am I under for post-employment competitive activity?

Our law strongly favours free competition. Employees can, as a general rule, leave an employer and enter into competition. There are limits, however.

The employee must be extremely careful not to take steps to start up the competing business while he or she remains employed. It is acceptable to plan for and prepare the new competitive business while still employed, but not to take any steps to implement the business. It is also not appropriate for any of the planning or preparation work to take place while the employee is supposed to be working for the employer. Activities should not occur on the employer’s premises, and the employee should not use the employer’s computers or other systems for such purposes.

Additional limits on competition may arise from special circumstances, such as an enforceable clause in the employment agreement prohibiting competition or solicitation for a period of time after the employee leaves the employer. Reasonably worded restrictions of this sort can effectively rule out competition in some cases. If employees are “key employees” or employees with “fiduciary duties” they may be further restricted from competition with their employers. If you are thinking of going into competition with your employer, you should be careful how you do so.

It is noteworthy that some clauses restricting competition, solicitation etc. may be unenforceable at law for being overly restrictive, but it is dangerous to assume this is the case.  A person who has such a contractual clause should seek legal advice from an experienced lawyer regarding its validity.

I took this job based on false promises. Does that matter? Is there a material misrepresentation which gives me some rights or remedies?

It sometimes happens that employees are recruited to join an employer based on false promises. For example, the employer might tell the employee that the job that is open is different than the actual opportunity, or that the pay or benefits are more generous than is actually the case. Then, the false representation is discovered by the employee.

If the promise by the employer becomes a contractual obligation, because it is incorporated into the employment contract, the employee can sue for breach of contract. If successful, the employee would in these circumstances normally be compensated by an award of damages sufficient to put the employee in the same position he or she would have been in if the promise had been kept. This sort of action may not be possible during continued employment.

In some cases, the false promises might not have contractual effect. This might occur, for example, where the employee was required to sign a written contract that did not contain the promise, or contained a termination clause to the employer’s benefit. In these circumstances, the employee might wish to pursue a claim based on “misrepresentation.” The theory of this claim is that the employee relied on the truth of the statement about what the future would hold, to his or her detriment. The employee might not have taken the job at all, but stayed in an existing job, or not moved to take the new job. The employee in these circumstances would normally be awarded damages to place them in the position they would have been if the false statement had not been made. Damages with this approach could quite possibly be more than would be available in a contract claim.

I’ve been off work for quite awhile due to an illness. Will I lose my job? Is my employment contract “frustrated”?

Employers are prohibited from discriminating against workers based on certain prohibited grounds.  Prohibited grounds include physical or mental disability.  Thus, if an employer dismisses an employee because of a real illness, the employer generally commits a prima facie breach of human rights law.

One important exception/defence that is recognized by both the courts and the BC Human Rights Tribunal is “frustration” of contract.  In a nutshell, the legal doctrine of “frustration” says that if your illness causes you to be off work for an extremely long period of time – unexpected by either party – and there is no prognosis for a definite return to work, at some point the employment contract can become frustrated.  The ramifications to the employee are severe – there is no notice/severance owing to an employee whose contract becomes frustrated.  How long it takes for a contract to become frustrated varies from case to case.

As a general premise and precaution, if you are involved in a case involving a work absence of more than a year due to illness, you should seek legal advice on frustration of contract.

 

I’ve been given working notice, do I have to carry on? Can I get a severance package?

Unless you have a contract that sets out the manner in which your employment may be terminated, there is an implied term that requires an employer to provide reasonable advance notice of a potential termination. This is what working notice actually is. You are given notice that your employment will end on a date in the future and you are required to continue to work until that date.

The BC Employment Standards Act also provides for advance notice of termination except that the amount of notice required is typically less than the implied contractual term requiring “reasonable” notice described above. In order to count as advance notice, an employer must provide unequivocal notice that your employment will end on a future date. Warnings like “things are not looking good” typically don’t count as advance notice. You need to know that your job will end and when it will end so you can find alternate employment.

In situations where proper advance notice is given, you must continue to work if required. However, your employer must also keep the terms of your employment roughly the same. Substantial changes to your employment during a notice period could give rise to a constructive dismissal. This topic is covered elsewhere in these FAQs. One important point is that the safest play is usually to continue working without suing for wrongful dismissal even if you believe that the working notice period is too short. By continuing to work during this notice period, you will not be considered to have waived your right to sue for a longer notice period once the employment actually ends.

My employer wants to pay me salary continuation. Is this something I have to accept? Can I get a lump-sum amount?

Unless you have a contract permitting payment by salary continuance, the Courts generally require an employer to pay damages for wrongful dismissal in a lump sum. Sometimes, if the matter gets to Court before the end of a reasonable notice period and there is evidence suggesting the dismissed employee may get another job before the end of the notice period, the lump sum award could be reduced to reflect this contingency.

In a leading case dealing with salary continuance versus lump sum awards (Tull v. Norske Skog, a copy is on our website under “Our Cases”), the trial judge stated that the Courts do not generally sanction a salary continuance arrangement unless the length of the notice period offered is on the high side of the range of reasonable notice.

The method of payment is frequently an issue that the parties can agree on in settling a case. Some severance offers include a term to the effect that salary continuance will continue for a number of months but if the employee gets another job during the salary continuance period, the employer will pay out a percentage of the remaining amount of salary continuance. Again, this is not a term that the Courts will imply into a contract and dismissed employees are not required to accept this method of payment. This arrangement may be a beneficial way to settle a lawsuit if the length of salary continuance and the percentage of payout are acceptable to both parties.

I’ve been dismissed. Am I entitled to my bonus? What about earned commissions?

Typically you are entitled to receive all the remuneration you would have received if you had been provided with reasonable notice of termination. This includes the type of bonus you could reasonably “count on” receiving. Where the bonus is set out in a formula, then so long as the company meets the requirements of a bonus payment according to the formula, you should be entitled to a bonus as a component of a claim for wrongful dismissal.

Purely discretionary bonuses are more difficult to claim, though not impossible. Where a bonus plan specifically provides that no bonus is payable after notice of termination is provided or where a plan requires “active employment” at the time of payout, then the employer may have a defence to the bonus claim. The specific wording of these plans must be reviewed carefully on a case by case basis. See Wilson v. UBS Securities Canada in “Our Cases” on this website for an analysis of a discretionary bonus claim where we successfully recovered a discretionary bonus of $425,000 in a constructive dismissal case.

Similar considerations apply to commissions earned for service up to the time of dismissal and into the notice period which was improperly denied.

They are changing my job a lot? Do I have to go along with it?

Employers have a wide latitude in assigning employees to particular tasks or areas of responsibility. Employees are thus ordinarily required to accept instructions by employers even involving substantial changes to areas of responsibility. There is, however, a limit beyond which an employer cannot go without assuming a risk of breaching the terms of employment.

If the revised job duties involve what a reasonable onlooker would regard as a fundamental change, the employee would ordinarily not be required to accept that change. If the employer insists on the demotion and the employee refuses, a court might well regard the demotion as a constructive dismissal, equivalent to an actual termination, and award compensatory damages. In some cases this can apply where a promotion is offered, but that change is unacceptable to the employee.

The difficulty is knowing where to draw the line. If the employee refuses to accept new responsibilities that were within the employer’s rights, the employee would normally be seen as having quit or voluntarily resigned. The safest course in circumstances such as these is to obtain competent legal advice before deciding what to do.

What is a “constructive dismissal”?

Constructive Dismissal is a legal term used to describe a situation where an employer does not say “you are fired” but makes unwanted changes to your employment which are so substantial that a Court will view the changes as “constructively” terminating your employment.

Because the employment relationship is often a fluid relationship, changing over time, you generally can’t require your employer to keep your job exactly the same. Typically, over time, there will be changes such as increased pay, increased responsibility, minor changes to working hours, etc. In circumstances where an employer attempts to force a substantial change on an employee, the employee can refuse to continue to work in the changed circumstances and claim for damages based on what the employer should have done which was to provide reasonable notice of termination of employment.

The terms the Courts frequently use to describe the type of changes that would result in a finding of constructive dismissal are “fundamental” changes and changes “going to the root of the employment relationship.” Generally, constructive dismissal situations involve reduction in remuneration, position and/or status. Other less common changes (like being asked to relocate) can result in a constructive dismissal too, however, and the above list is not exhaustive.

The magnitude and type of change that will allow a person to walk off the job is very difficult to generalize. Typically, if you believe that your employer is asking you to do something you never agreed to do or to perform the same services for less than you are prepared to accept for your services, you should talk to an experienced employment lawyer. You may not have been fired, but the result may be the same.  Constructive dismissal cases are difficult because the risks are quite high. If you allege constructive dismissal and the Court does not agree that the changes were sufficient to qualify as a constructive dismissal, you will have lost your job and lost your case and be liable for some of your employer’s legal costs.

Do I have to relocate to keep my job? What do I have to do to mitigate my damages?

It depends. If your job is the type of job where relocation is expected or common, or if you have a history of relocating then you will more likely have to accept reasonable relocations. If you have worked for a long time in one location with no indication that you might have to move, then you likely won’t have to relocate. The distance of the proposed relocation is often a significant factor. For an analysis of this topic in one of our recent cases, see Wilson v. UBS Securities Canada on our website. In this case, the employer sought to close its Vancouver office and move the employees to San Francisco. The Court determined that the employee was not required to accept this relocation.

I am being treated differently at work, because of my age, gender, family status, religion or disability. What can I do?

Employees in British Columbia are protected from discrimination based on certain grounds prohibited by human rights laws.  Prohibited grounds of discrimination include age, sex, family status, and disability.  This is not an exclusive list of prohibited grounds.

Discrimination means treatment that is different from other persons.  Discrimination prohibited by human rights law is discrimination which occurs because of the worker’s membership in a protected group.  If unlawful discrimination occurs, the employee would be able to pursue a variety of remedies under the relevant legislation.  These complaints are normally advanced to the BC Human Rights Tribunal or the Canadian Human Rights Commission (as applicable).  Importantly, in some cases, violations of a worker’s fundamental human rights may give rise to a civil cause of action for wrongful dismissal, constructive dismissal, and in certain events aggravated and/or punitive damages.

I’ve been fired and I’m suing my employer for wrongful dismissal damages. What do I have to do in terms of finding a new job?

When you sue your ex-employer for wrongful dismissal damages, the court, in assessing those damages, will usually deduct from your award any amount you did earn or should have earned if you applied yourself to find a new job. This is referred to as the employee’s duty to “mitigate” damages.  This is often not the case where your written employment contract provides for a set severance payment in the event of dismissal not for cause.

What you actually did earn will be fairly easy to assess.  It is more difficult to argue what you should have earned if you had made the required efforts.

In order for there to be any deduction from the total amount you would have been paid during a reasonable notice period on account of money you “should have earned”, there must be evidence before the court which persuades the court that: (1) you did not do everything you ought to have done to try to get other work and (2) that if those additional steps had been taken, earnings would have been generated to reduce your damages. In a wrongful dismissal action, the “onus” is on the employer to bring forward persuasive evidence of both factors, which are difficult to prove.

If fired (ie. terminated without notice, or reasonable notice), the employee should do whatever is reasonable to try to find a roughly equivalent job. Normally, it would be reasonable to look for a similar job without taking a material step down in either level of responsibility or pay and benefits. Courts would not normally require an employee to accept a significant career setback in mitigation. Depending on the circumstances, mitigation might legitimately involve retraining or involve the employee pursuing a new career, or a new business. The question the Court should address is: did the employee take action to do what was the right thing for him or her to try to get back to a similar sort of job or earning level.

In most wrongful dismissal claims, it is important that employees take steps to mitigate, and that they carefully document their efforts (by keeping documents showing searches, interviews, applications etc. and perhaps a journal) in that regard so that they can tender evidence at a trial.

Am I entitled to be paid overtime pay during the notice period?

If your employment contract contains an obligation on the part of your employer to pay overtime pay for overtime work, and you are dismissed without proper notice, your damages would properly include an amount to compensate you for overtime you would have worked. To establish a contractual right to overtime pay, which would be enforceable in a court action, you must show an agreement between yourself and your employer that you would be paid for overtime at overtime rates. This could be an express agreement (either written or simply made by discussion) or it may be established by an actual practice that was followed prior to your dismissal. Also, you will need to prove that if the employer did give you proper notice, your overtime work would have continued.

A recent decision of our Court of Appeal makes clear that statutory overtime cannot be claimed in Court for time worked, though it can be pursued at the Employment Standards Branch.  The same decision leaves at large the issue of overtime that would have been worked during a working notice period which was wrongfully denied.

Is money I recover in a wrongful dismissal claim taxable? What are the tax conseqences of a severance package?

We Canadians all know too well that our income is taxable.

Money recovered in a wrongful dismissal action is mostly intended to approximate would-be income.  Accordingly, with few exceptions, it too is taxable.

Therefore, employers usually withhold a certain proportion of amounts due for wrongful dismissal damages, and remit that amount to the Canada Revenue Agency for the employee’s tax account. The amount is a credit of tax paid by the employee for the relevant year.

There are certain techniques available to employees to minimize the legally required taxes which are payable at the time of termination of employment. Employees may be eligible to take advantage of a non-taxable retiring allowance for service before 1996, under a Canadian tax rule that applied until that time. This rule permits a certain amount of the retiring allowance attributable to years before 1996 to be paid into the employees’ RRSP, free of taxation at source. Some tax relief is also available in that legal expenses incurred to recover wrongful dismissal damages can be deducted from income, or paid directly by the employer, without withholding. Also, in some circumstances, it is possible to direct that some part of monies payable by way of wrongful dismissal damages be paid into the dismissed employee’s RRSP in respect of available “RRSP room” that exists because historically, maximum contributions have not been made.  Finally, certain heads of damage advanced (such as punitive damages) are not subject to taxation at all, and accordingly a portion of the settlement in certain rare cases may be attributed to such heads of damage tax free.

I’m turning 65, do I have to retire or can I work as long as I want to? Is retirement mandatory?

Until 2008, many employers, both in the private and public sectors, had mandatory retirement “policies” requiring employees to retire at age 65. Effective January 1, 2008 the BC legislature eliminated mandatory retirement when it enacted amendments to the Human Rights Code. The Code prohibits discrimination based on age. Before 2008, “age” was defined as younger than 65, so requiring persons older than age 65 to retire was permitted. Now, policies of this sort are contrary to the Code and legally null.

The result is that employees now have no artificial end date for their employment. Typically, if there is no effective, pre-existing contractual term that provides for mandatory cessation of employment at a time certain, the only legal way for the employer to terminate the employment is by providing reasonable working notice of termination. Employers will face real challenges in circumstances where they wish to terminate the employment of aging workers. If an employer gives working notice of termination in circumstances where any part of the motivation is found to be a desire to be rid of an older worker, there would be a risk of a finding of discrimination contrary to the Code. If an employee is dismissed and it is determined in a complaint to the Human Rights Tribunal that the discharge was discrimination based on age, the employer could be ordered to reinstate the employee, with up to full “back pay”, and additional compensation for breach of the employee’s basic human rights.

Employers have a duty to accommodate age related disabilities as well, unless it would be unduly difficult to do so. Employers can legitimately make distinctions based on the age of workers only if they can demonstrate a “bona fide occupational requirement” to do so. A bona fide occupational requirement is a legal standard that makes distinctions on certain grounds, including age, but that is allowed because of the nature of the employment. To demonstrate the existence of a bona fide occupational requirement an employer must establish that it held an honest and good faith belief that it was necessary to the fulfillment of that legitimate work-related purpose, which is a difficult burden to meet.

The bottom line is that in most cases there will be no effective way to force elder workers to retire based on their age.

Employers should be careful to avoid discriminatory conduct based on age.

I’m in a union and my employment is covered by a collective agreement. My employer is mistreating me, what do I do? Can a unionized worker sue for wrongful dismissal damages?

Because your employment is covered by a collective agreement, your only avenue to hold your employer to account is almost certain to be through your union. You should ask for the assistance of your union representative in addressing your concerns. The union should consider your circumstances and take appropriate action – if necessary commencing a grievance on your behalf. If your union does not take sufficient steps on your behalf, you may have a claim against your union for failure to properly represent you.  Our office does not handle such claims, however.

What happens to my stock options if I’m fired? Are stock option losses recoverable in a wrongful dismissal action?

The answer to this question depends on the particular details of your employment agreement, the Stock Option Plan under which your options were issued, and the terms of any Stock Option Grant(s). The overall governing principle is that after a wrongful termination, you have a claim for damages for breach of contract, and the court should grant damages, in a lump sum, to compensate you fully for all losses. Full compensation means the lump sum should be enough to put you in the same position you would have been if you had been given working notice. During a working notice period, you would often continue to have options vest, and you would often have had a longer period of time to exercise any options.

Usually, but not always, Stock Option Plans state that employee stock options cease vesting on the date of actual (even wrongful dismissal) termination of employment, and the fired employee has a short period (usually 30 days) to exercise. The employee loses the ability to have additional options vest and to wait to exercise through a notice period. Damages should compensate for this.

Complicated mitigation issues arise as to whether the employee is obliged, in the 30 day “window”, to purchase the shares in respect of the options which had vested by then.

The general approach to damages discussed above (availability of damages for losses during the notice period) would likely not be appropriate, if the stock option benefit enjoyed by the employee was very clearly stated by the employment agreement, the Stock Option Plan and the Grant to expire if an individual’s employment ends even without notice and even if the termination was a wrongful dismissal. Clear language is required for this, however, and it is common for us to find a way to invalidate such language for a lack of clarity.

I had a leased car or a car allowance, can I recover compensation for this in a wrongful dismissal claim?

In a wrongful dismissal claim, if successful, you will be awarded compensation in the form of lump sum damages. This would normally include amounts you would have received during a reasonable notice period such as base salary or wages. It can also include amounts to compensate for lost benefits.

A car allowance could possibly be a benefit giving rise to damages. Evidence of a loss will be required to make out such a claim at trial.

Can I commence a legal action against my employer for wrongful dismissal while still working? Must I wait to sue for damages?

British Columbia employees owes their employer a duty of good faith and loyalty. This duty exists regardless of the sort of job involved, and is an implied term that the law places into employment agreements. Several decisions have found that if an employee commences a legal action against his or her employer while still employed, the employee has breached the duty of good faith and loyalty, and the employer would then be able to terminate the employment lawfully without notice. The employee would be seen as having given “just cause” for termination by his or her act of commencing legal proceedings.

However, there are limited circumstances where an employee could start a claim and not be seen as having breached a duty of good faith and loyalty. Examples might (depending on the circumstances) be where the employee’s claim is for amounts due to the employee for wages, commissions or bonus. The action might be framed as a claim not for damages but for “directions” where the court is asked to interpret the parties respective legal rights and obligations.  A Human Rights complaint can also often be advanced without giving rise to cause for dismissal.

The last word on this topic – think very carefully about suing your employer while you are still working, and get qualified legal advice before you act.

If I’m dismissed, will I be compensated for pension losses in my wrongful dismissal claim?

If you are dismissed with proper reasonable notice you will work out the notice period and your pension will grow by reason of added contributions and length of service. When your job ends, you may still have a claim for pension damages, or you might not.

If you are terminated without reasonable notice, your wrongful dismissal damages will quite often contain a component for your loss of pension. Because your job ends prematurely, your defined benefit pension on retirement (or the value of your investments in a defined contribution pension plan) will be less than should have been the case. Your wrongful dismissal claim will properly include a lump sum amount to represent your lost pension value. The amount of this damage component, if properly advanced on your behalf, will include the amount required to put you in the same overall net position, as if you had worked through a reasonable notice period.

In a defined contribution plan, this is roughly approximated by the employer’s contributions during a reasonable notice period. In a defined benefit plan (ie. you get so much a month on retirement) the employer’s contributions are not the measure of your loss. Rather, you would need to determine (often with an actuary’s help) the actual amount of the loss. Sometimes, if you are wrongfully dismissed just before a key vesting period or milestone, your loss can be large, perhaps even the largest component of your overall claim.

My job is on shaky ground. I’m sick. What do I do if I’m worried I will lose my job if I take time off?

Technically, employers are prohibited from discriminating against an employee because he or she is sick.  If an employee is treated differently because he or she develops an illness, which might require time off from work, the employer’s actions may constitute unlawful discrimination.

If the employee’s illness is legitimate and supported by medical documentation, an employer should allow such an employee time off (not necessarily paid leave – entitlement to payment depends on the particular circumstances) to recover, and make that employee’s job available on a return or a graduated return to work.

If the illness and absence from work persist for an inordinate and unexpected time period, the issue of “frustration” of contract may arise.

These issues are complex and difficult to assess – experienced legal counsel should be sought in these cases.

If I sue for wrongful dismissal, will my employer have to pay my legal expenses?

A successful employee in a wrongful dismissal action normally recovers “costs” against the former employer. Recoverable “costs”, however, are not the same as the actual legal expense an employee might have had to pay to his or her lawyer. Recoverable costs are normally considerably less than one third (often only 20-25%) of an employee’s actual legal expenses.  Thus, even a successful claimant would in most cases incur legal costs that are not recoverable.

What is “Just Cause” for Dismissal?

Written employment agreements often contain clauses permitting employers to dismiss employees for “cause” or “just cause”.  Where this is not in writing, the employment agreement would normally include an implied, unwritten term permitting dismissal for just cause. Put another way, the law says such an implied term should be inferred as part of the employment relationship.

Just cause is a legal term that means in certain circumstances an employer can terminate an employee without providing reasonable notice and with no obligation to pay damages. There is no clearly established method of predicting what will constitute just cause – our courts consider the relevant circumstances of each individual case.

The leading Canadian case on just cause dismissal is McKinley v. BC Tel.  One of our founders, Murray Tevlin, represented Mr. McKinley at all court levels, including in his successful appearance at the Supreme Court of Canada.  McKinley involved an allegation of just cause because of alleged dishonesty. The court entered into a contextual analysis of the conduct of the plaintiff, and found that any established misconduct was not sufficient to destroy the employment relationship and lead to a finding of just cause.

Courts focus closely on the particular alleged misconduct to decide if it is sufficient to dismiss an employee without reasonable notice.  The primary inquiry is whether the employee’s misconduct caused a breakdown in the employment relationship, by either violating an essential condition of the employment contract, or destroying the employer’s faith in the employee. If the employer can clearly establish these circumstances at trial, just cause will have been established.

The court will consider whether the evidence supports a finding of misconduct, and whether summary dismissal is a proportionate penalty for the nature or degree of this misconduct.

Employee behaviour that prompts a consideration of just cause for dismissal is often considered within various categories, including: (i) poor performance, (ii) dishonesty and misconduct (iii) theft or fraud (iv) insubordination and other sometimes overlapping categories.

In many situations, courts like to ask whether an employer gave a warning before termination. Where there was no clear warning before the dismissal that such misconduct could result in termination, except in the most serious of cases, the employer will most often find it difficult to establish just cause.  Warnings are appropriate in situations where the employer’s alleged just cause is based on poor job performance, breach of company policies, and minor examples of insubordination.  Warnings would not be required in more serious cases of just cause based on (for example) dishonesty, theft, or fraud.

Where an employer attempts to establish just cause, in some cases, serious misconduct on the part of the employee which might have established the existence of just cause cannot be relied upon because the employer knew of the misconduct for a period of time and did nothing to act on it. This is a legal principle called “condonation.”

If your case is one that may involve the difficult issues of “cause”/”just cause”, you should seek legal advice from a lawyer who has experience in this area.

Should I sign anything if my employer asks?

Before employment begins, it is common for employers to ask employees to sign documents which may describe job duties and other terms of employment as well as certain tax documents.  While some of these documents might be described as routine, others could well impact upon eventual termination rights and other important matters.

During employment, an employer may require an employee to sign an acknowledgement of reprimand, promotion, demotion or new policies or benefits that are communicated, to ensure the employer has communicated these to employees properly.  Again, some of these might be normal run-of-the-mill documents, but others could have a serious impact on the employment status of an employee.

When employment has ended, or is about to end, the employer might ask an employee to sign a Release or other document that describes a settlement.  In our view, these should not be signed without the employee first having obtained legal advice.

If you have any doubt about a document you have been asked to sign by your employer, one of our lawyers can provide you with the advice you need.

What does it cost to hire a lawyer?

In British Columbia, employment lawyers normally provide legal services on the basis of a certain hourly rate multiplied by the number of hours spent on the case, plus applicable taxes and out-of-pocket expenses (called disbursements) associated with the case. A lawyer’s hourly rate usually depends on his or her years of experience.  However, rates may vary significantly from firm to firm (even for lawyers with the same years of experience) because of other factors like higher office expenses and overhead costs at certain firms.  Accounts for hourly billing are normally rendered on a periodic (often monthly) basis.

Sometimes, particularly with recently dismissed employees, clients find it difficult, or simply prefer not to fund legal costs on an hourly rate basis.  In the right situation, the lawyer and client are able to negotiate a retainer agreement where the lawyer would only be paid a fee for his or her services in the event the negotiation and/or claim is successful and money is actually recovered for a client.  These “contingency fees” are based on a percentage of the amount recovered. The percentages to be applied are determined by agreement, in writing, between the lawyer and client, and should reflect a reasoned estimate of the amount of work that will be involved and the expectations of the amount that might reasonably be recovered.

How do I get started with a legal claim for wrongful dismissal damages?

A legal claim is started when a formal document is filed with a court having jurisdiction to hear employment claims.  For claims under $25,000, this is normally a local Provincial Court (Small Claims Court), but larger cases are usually filed in the British Columbia Supreme Court.  It is possible for employees to commence a legal claim without legal advice or assistance, especially in Small Claims Court, but claims are typically commenced in the British Columbia Supreme Court by lawyers on behalf of clients.

Terminated employees would be well served to obtain legal advice before starting a legal action, or agreeing to a proposed settlement.

How long will it take to resolve my employment law and or wrongful dismissal claim?

This depends on the circumstances of your claim.  In the most common circumstance, where an employee is dismissed (a.k.a. fired, terminated, laid off, etc.) without any allegation that the employer had “just cause” to dismiss the employee, the time between dismissal and resolution can be fairly short.

Depending on the circumstances, a negotiated settlement might be worked out fairly quickly and without a need to commence litigation.

Even where litigation is required, for some cases the time between dismissal and a court decision can be as little as 6 months in our experience.  In cases where cause is alleged, or where there are complicated factual or legal issues requiring motions and preliminary applications, the time may be considerably longer.

If I sue my employer will it make it harder to find a new job?

When you apply for another job you may be asked how your last job ended.  You will have to deal with the circumstances of your most recent dismissal in some reasonable way.  It is unlikely that your job prospects will be worsened because you have commenced a legal action for fair compensation.  In our experience, employers understand the need for wrongful dismissal litigation in today’s world.

Western Star Class Action

Am I a member of the class action?

In the Certification Order the class is defined as follows:

All persons employed by the Defendant Freightliner Ltd. in British Columbia under an oral or written contract of employment of indefinite duration who received notice of termination of their employment at any time on or after December 3, 2001 until September 30, 2002.

This class does not include employees:

  1. who executed a full and final release in favour of the Defendant;
  2. who were dismissed for just cause;
  3. who were unionized employees in a bargaining until; and
  4. who resigned prior to September 30, 2002.

BC Residents: If you are a resident of British Columbia, you will automatically be a member of the class by falling within the definition outlined above. You do not have to do anything to be part of the class. If you do not want to be part of the class, you will have the opportunity to “opt out” at a later date, after certification of the claim as a class action.

Non-BC Residents: If you fall into the above definition, but are not a resident of British Columbia, you will have had the opportunity to “opt in” to one or both of the classes, in a manner that will be specified later in the proceedings.

What is the Class Action all about – what claims are being made?

In the class action, the plaintiff seeks to recover judgement for all of the claims described in the Statement of Claim. Some of the claims made are:
a claim for a declaration that the notice that Freightliner gave to its non-unionized employees in December, 2001 was not effective working notice of termination of employment, and ought not to be taken into account to diminish its severance obligation to employees on cessation of worka claim for a declaration that Freightliner breached its employment contract with its non-unionized employees when it unilaterally stopped paying overtime

  • a claim for a declaration that Freightliner breached its employment contract with its non-unionized employees when it unilaterally instituted a 5% salary rollback
  • a claim for a declaration that Freightliner breached its employment contract with its non-unionized employees when it unilaterally stopped paying bonuses
  • a claim that Freightliner has not paid or offered adequate severance because the amounts paid or offered do not reflect the full value of all salary and benefits the workers would have received during an appropriate notice period (for example, failure to pay any severance amount to reflect lost pension contributions during the notice period)

My employment with Freightliner has been terminated, or is being terminated soon, and I have received a settlement offer (a severance package) – should I accept it, what happens if I do?

This is a decision that you must make yourself. Only you can decide what is right for you, in your particular circumstances.

You should, however, be aware that if you do accept the severance package, you might not be able to participate in the class action. This depends on whether, by accepting the package offered by Freightliner, you will be seen as having settled all of your possible claims. If you sign a Release, depending on the language of the document, you may release all of your claims against Freightliner. Even if you sign a release, depending on the circumstances, you might still be able to participate in the Class Action.

Your should consider whether the severance offer made to you:

  • is based on an appropriate notice period, given the length of your service, your age, the availability to suitable alternative employment, and other relevant circumstances
  • includes compensation for for unpaid overtime, bonuses, and the 5% salary rollback amounts
  • is based on all money and benefits you would have received during the notice period
  • requires you to sign a Release that would preclude you from participaring in any award to the pension class

At the very least, we recommend that you do not sign any Release or any document which might amount to an agreement that your claims in the Class Action are barred, without obtaining legal advice.

What if Freightliner insists that I sign a release before providing me with my severance package?

If you refuse to sign a release, it has now been confimed that Freightliner will pay you all severance amounts they have said they will pay in notices of termination, regardless of whether you refuse to sign a Release.

By law, the company is not allowed to withhold the minimum amounts set out in the Employment Standards Act. These amounts vary with your length of service with the company, and can range anywhere from one week to eight weeks wages.

What is the effect of my signing a Release?

If you sign a Release you will be precluded from advancing the claims that are specified in the release against Freightliner. Thus, the effect of the Release depends on the specific language.

Does it cost me anything to take part in the class action?

No, not at this point. If we are successful in the action, with the court’s approval, a portion of the award that we obtain for each of the members will go towards our legal fees and disbursements. If we are unsuccessful in the action, there will be no costs.

If I accept a transfer to Freightliner’s operations in Portland, can I take part in the class action?

It all depends under what circumstances you accept the transfer. If you sign a release, you may be precluded from taking part in some or all of the class action. If you do not sign a release, it is likely that you will be able to take part in the class action. If you are working in a position that is comparable to the one you enjoyed with Freightliner before you moved, it is unlikely that you will recover any compensation for severance of working notice through the class action. You could possibly still recover monies for your pension loss, overtime payments, bonus claim and 5% salary rollback, depending on your individual circumstances.

If I move to another province or out of the country, can I still take part in the class action?

Yes, you can still take part in the class action if you move away from British Columbia.

What information and documents should I send to TevlinGleadle?

We will provide a form of questionnaire to be completed by the class members in due course. This questionnaire will describe the documents we will need. In the meantime you should organize and preserve documents relevant to your work history and your pension.

What if I want to “Opt Out” of the Class Action?

You will have an opportunity to opt out of the class action once the court has certified the proceedings and approved the classes. After certification, we will send all class members a form to be completed by anyone wishing to opt out.

How long will it take for the Class Action to be resolved?

The answer to this question depends on circumstances which cannot be determined with certainty at this stage. Depending on the nature and extent of discussions between TevlinGleadle, class counsel, and counsel for the defendants, early resolution of some or all of the issues might be achieved, even in the next few months. Early steps are being taken in the action, to exchange formal positions (Statement of Claim, Statements of Defence), and to seek an order certifying the proceeding as a Class Action. The certification application is required by the Class Proceedings Act to occur within 90 days of the time when the defendants are supposed to have filed their Statements of Defence.

Worst Case Scenario: If all issues are fully disputed, and no agreements can be concluded with the defendants, and if all appeals are taken, final resolution of all claims might not occur for up to several years. However, we are committing all our resources now, seeking a fair resolution to all issues at the earliest possible date.

Catalyst Class Action

Am I a member of the class action?

In the Certification Order three separate classes are defined.  If you fall within one of the three classes and are a resident of the province of British Columbia at the time of the Certification Order or during the period during which Optin In or Opting Out is allowed, you are automatically a member unless you opt out.  If you are a BC Resident at that time, you can Opt Out of the class action.

What is the Class Action all about – what claims are being made?

In the class action, the plaintiff seeks to recover judgement for all of the claims described in the Notice of Civil Claim.

You can review the Notice of Civil Claim on our page for the Catalyst Class Action.

What is the effect of the Court certifying certain particular issues as Common Issues? Will all the Individual Issues relevant to my claim be resolved in the class action?

Class proceedings involve separate stages.  The classes consists of a number of individuals whose claims share some issues but which have many individual issues. Common issues are those which affect all class members in the same way, individual issues (eg how much has the person lost for a particular benefit) are relevant to individuals only.  The class action splits issues into common issues and individual issues.  Normally, the common issues are resolved first, as the resolution of these issues benefit all class members.  Once the common issues are resolved, if no settlement is achieved, class counsel will advance claims on behalf of each individual class member, as part of the class action, but fees will still be covered by the contingency fee so that claimants pay no fees unless recovery occurs.

My employment with Catalyst has been terminated, or is being terminated soon, and I have received a settlement offer (a severance package) – should I accept it, what happens if I do?

This is a decision that you must make yourself. Only you can decide what is right for you, in your particular circumstances.

You should, however, be aware that if you do accept a severance package, and if you sign a General Release of All Claims, you might not be able to participate in the class action. This depends on whether, by accepting the package offered by Catalyst, you will be seen as having settled all of your possible claims. If you sign a Release, depending on the language of the document, you may release all of your claims against Catalyst.

Your should consider whether any severance offer made to you:

  • is based on an appropriate notice period, given the length of your service, your age, the availability to suitable alternative employment, and other relevant circumstances
  • includes compensation for for unpaid, STIP bonuses, any pension claim you might have, and any claim for benefits or the rolled back benefits
  • is based on all money and benefits you would have received during the notice period
  • requires you to sign a Release that would preclude you from participaring in the class action

At the very least, we recommend that you do not sign any Release or any document which might amount to an agreement that your claims in the Class Action are barred, without obtaining legal advice.

Does it cost me anything to take part in the class action?

If we are successful in the action, with the court’s approval, a portion of the award that we obtain for each of the members will go towards our legal fees and disbursements. If we are unsuccessful in the action, there will be no costs.  You will not have to pay anything unless it is from money recovered on your behalf.

If I move to another province or out of the country, can I still take part in the class action?

Yes, you can still take part in the class action if you move away from British Columbia, as long as you are a member of the class and do not opt out.

What information and documents should I send to TevlinGleadle?

We will provide a form of questionnaire to be completed by the class members in due course. This questionnaire will describe the documents we will need. In the meantime you should organize and preserve documents relevant to your work history and your pension.

How long will it take for the Class Action to be resolved?

The answer to this question depends on circumstances which cannot be determined with certainty at this stage. Depending on the nature and extent of discussions between Tevlin, Gleadle, Curtis, class counsel, and counsel for the defendants, early resolution of some or all of the issues might be achieved, even in the next few months.

Worst Case Scenario: If all issues are fully disputed, and no agreements can be concluded with the defendants, and if all appeals are taken, final resolution of all claims might not occur for up to several years. However, we will endeavour to resolve matters as promptly as possible.