Canadian Employment Law Today

June 2, 2021

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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Canadian HR Reporter, 2021 Canadian Employment Law Today Canadian Employment Law Today | | 7 More Cases More Cases several proposals, including Conway's offer to acquire an interest. Employee's ultimatum Conway presented his proposal to the consul- tants and the owner's family members, mentioned multiple times that if Griff didn't implement his proposal, he would resign from the company and do it himself. He also said this in one-on-one meetings with the consul - tants and told the manager of retail/contractor sales that he already had 50 investors lined up. In November, Conway, the manager of retail/ contractor sales, and two of the owner's chil - dren made formal presentations to stake- holders, who rated them. They didn't rate Conway's proposal very high, so Conway asked the owner for another chance to present it. She agreed and asked the consultants to work with him to refine it. Conway presented his proposal a second time on Dec. 18. The presentation was framed as a pitch for an investment opportunity in which Griff would invest and take responsi - bility for the long-term debt of a new company that would take over the wholesale/export sales side of Griff. Conway's team of employees would move to the new company and Conway would be the president, board chairman and majority shareholder. The owner thought about it for a couple of days and decided to reject Conway's proposal. They met on Dec. 21 and she informed him of her decision. She discussed their conversations over the past few years and said the strategic planning for the past few months had helped with her decision not to separate the compa - ny's wholesale/export business from its retail/ contractor business. She also asked Conway if he would still be staying with Griff, given his previous statements. Conway replied that he still intended to leave since his proposal had been rejected. He said he would be tendering his resignation, which the owner and the consultants accepted. They all agreed that Conway would provide a formal letter of resignation by Jan. 1, 2019 and that he would continue in his role with Griff until Feb. 28. At all times, the meeting was professional and there were no raised voices or displays of emotion. Told others of resignation However, Conway felt "shocked, dismayed, confused, reeling, and very disappointed." He didn't feel he was prepared to officially resign yet, so he went to his office and reflected on the meeting. About one hour later, some members of his team came by and told him they had heard he was leaving. Conway confirmed that he was. Later that day, the owner sent an email to all staff announcing Conway's decision to resign. Conway saw the email and was contacted by a customer who had heard that he was leaving and wanted to discuss a job opportunity, but Conway wasn't interested. The next day, one of the consultants advised the owner that keeping Conway until Feb. 28 was too long and suggested asking for his resig - nation letter by Dec. 27. The owner didn't do anything over Christmas and on the morning of Dec. 27, she sent Conway an email asking for his resignation letter by 5 p.m. that day. However, Conway replied just before 5 p.m. saying he had consulted legal counsel and had been advised to avoid responding until he could meet with his counsel on Jan. 3, 2019. The owner replied that Griff would no longer need him to work his notice period through to Feb. 28 and asked him to immediately return his laptop and other company property imme - diately. Conway did so the next day. On Jan. 3, Conway incorporated a company with himself as the director and sole share- holder. The company began selling lumber in competition with Griff. Griff soon learned about the new company and terminated Conway's employment for cause on Jan. 25. Conway sued for wrongful dismissal, while Griff contended that he resigned from his employment at the Dec. 21 meeting. The court noted that, when it comes to determining if an employee resigned, their subjective state of mind at the time of the perceived resignation is relevant. In circum - stances where the employer has claimed to have accepted a resignation, the employer must be able to prove that the employee agreed to resign their employment. The court also noted that Conway had made repeated assertions over months that he would resign from Griff if his proposal was not accepted. At the Dec. 21 meeting, he appeared calm and unemotional when he confirmed his intention to resign after the owner asked him if that would still be his response. Conway claimed that, afterwards, he was "shocked, dismayed, confused, reeling, and very disappointed" and the court interpreted this as possibly meaning that he had been bluffing with regards to his intention to resign. However, the owner and the consultants had no way of knowing this as he hadn't let on what he truly felt or thought, the court said. "It was reasonable for them to take what Mr. Conway was saying at face value," said the court. "Griff was not taking advantage of Mr. Conway when it accepted his offer to resign and settled on a period of working notice in a short, unemotional discussion." The court found that, although both sides agreed that Conway would provide a letter of resignation, the resignation didn't depend on it. Griff clearly believed the resignation was effective immediately, as it quickly notified employees the same day about it. Conway saw the email and knew that some customers and his team members were aware of it, but he didn't tell anyone that he had not yet agreed to resign — in fact, Conway confirmed to members of his team that what they had heard about him leaving was correct, the court said. The court determined that the conduct of both Conway and Griff, when viewed both reasonably and objectively, established that they both viewed Conway as having resigned at the Dec. 21 meeting and the letter of resignation to which they had agreed was just a formality. However, the parties had agreed that the employment relationship would come to an end on Feb. 28. Even when the owner told Conway to stop coming into work, she stated that his employment would still last until then. When Conway established his own company and started competing with Griff in early January, he repudiated the employment contract. This allowed Griff to terminate his employment early, said the court in dismissing the wrongful dismissal claim. For more information, see: • Conway v. Griff Building Supplies Ltd., 2020 BCSC 1899 (B.C. S.C.). « from B.C. COMPANY on page 1 Employee said he would pursue other opportunities if rejected The employee confirmed to his team members that what they had heard about him leaving was true. Employment law blog Canadian Employment Law Today invites you to check out its employment law blog, where editor Jeffrey R. Smith discusses recent cases and developments in employment law. The blog features topics such as paid sick leave, drug and alcohol testing, and harassment of remote workers. You can view the blog at www.employmentlawtoday.com.

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