Canadian Employment Law Today

June 17, 2020

Focuses on human resources law from a business perspective, featuring news and cases from the courts, in-depth articles on legal trends and insights from top employment lawyers across Canada.

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©2020 HAB Press Limited, a subsidiary of Key Media KEY MEDIA and the KEY MEDIA logo are trademarks of Key Media IP Limited, and used under license by HAB Press Limited. CANADIAN EMPLOYMENT LAW TODAY is a trademark of HAB Press Limited. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher. The publisher is not engaged in rendering legal, accounting or other professional advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The analysis contained herein represents the opinion of the authors and should in no way be construed as being either official or unofficial policy of any governmental body. GST/HST#: 70318 4911 RT0001 How would you handle this case? Read the facts and see if the judge agrees YOU MAKE THE CALL Published biweekly 22 times a year Subscription rate: $299 per year CUSTOMER SERVICE 20 Duncan St. 3rd Floor, Toronto, ON M5H 3G8 President: Tim Duce Editor: Jeffrey R. Smith Email: Production Editor: Patricia Cancilla Business Development Manager: Fred Crossley Email: Phone: (416) 644-8740 x 236 Marketing Co-ordinator: Keith Fulford Email: Phone: (416) 649-9585 HAB Press Ltd. THIS INSTALMENT of You Make the Call features an Alberta school employee who demanded constructive dismissal damages reflecting her 12 years at the school, two months after a new owner took over. Jacqueline Owens was a pre-school teach- er hired in 2006 by Copperfield Preschool in Calgary. She worked as a teacher for five years until she was promoted to manager of the school in 2011. On Jan. 30, 2018, Copperfield was sold to Xiaman "Savannah" Li as a purchase of business assets. As part of the purchase agreement, Copperfield's original owner was responsible for all employees, including sev- ering their employment, while Savannah Li acquired the school's assets. The school informed Owens of the sale on May 17, providing written notice of termi- nation as of June 1 that stated Savannah Li would be issuing a new employment con- tract on that date "so you won't [lose] any income or hours]." The letter added that it was a formality of the sale process and Sa- vannah had assured the selling owner that she would still be employed and Savannah Li would meet with each employee to "discuss your roles and contracts, so these can be in place before June 1, 2018 transfer." On June 1, Owens signed a written em- ployment agreement that was on the letter- head of Copperhead Preschool and stated the director was Savannah Li. She continued to work at the school until June 21, when it closed for the summer. The next day, the school issued two records of employment (ROE): one from the original owner stat- ing the reason for issuance was "change of ownership" and showing earnings up to May 30, with the second from Savannah Li show- ing earnings from June 1 to 21 and stating the reason for issuance as being "shortage of work/end of contract or season." Savannah Li sent Owens an offer of employ- ment for the following school year on Aug. 4, but there were significant changes with which Owens wasn't satisfied. However, Savannah Li said she couldn't change the offer. Owens responded on Aug. 21, saying she was giving two weeks' notice that she was re- signing her employment as manager of Cop- perfield Preschool. She also stated that she had spoken to Alberta Employment Stan- dards and she believed she had "a good claim against you and Copperfield Preschool for 'constructive dismissal,'" because Savannah Li had assumed all contracts when she pur- chased the school, including "severance pay for the 12 years I worked at the preschool." YOU MAKE THE CALL Was the worker owed termination pay for her time of service with the school? OR Was the worker's service time with the school irrelevant to her entitlement? IF YOU SAID the worker was not owed termi- nation pay reflecting her 12 years of service, you're right. The court found that the sale was a purchase of business assets rather than a transfer of the business. Although Owens had a long-standing employment contract with Cop- perfield Preschool, this was with the original owner and was clearly terminated effective June 1, 2018, with notice provided two weeks earlier. In addition, Owens signed a new employment contract with the new owner, Savannah Li, on June 1. The court noted that the school's previous owner didn't specifically raise the issue of Owens' past service, but it was the one that terminated her employment — the reasonable notice obli- gation was its responsibility and any claim for a lack of reasonable notice of termination should have been pursued with the previous owner. "Nothing could have been clearer that [Ow- ens'] obligation was over, and the [original owner] had no entitlement to pass on any obli- gation to [Savannah Li]," the court said. "[Ow- ens] was afforded the option of entering into a new contract with [Savannah Li] and that is exactly what she did." The court found that the agreement Ow- ens entered into with Savannah Li on June 1, 2018 was for an indefinite term and Owens was constructively dismissed when Li provided sig- nificantly different terms on Aug. 4 and refused to budge from them when Owens objected. However, Owens was only entitled to damages equivalent to two weeks' wages in lieu of notice due to the short term of the contract with the school's new owner. Savannah Li was ordered to pay Owens $1,265 for constructive dismissal. For more information, see: • Owens v. Copperfield, 2020 ABPC 39 (Alta. Prov. Ct.). The worker signed a written employment agreement on the school's letterhead. The previous owner didn't raise the issue of past service, but reasonable notice was its responsibility.

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