Canadian Employment Law Today

August 29, 2018

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 Employment Law Today | 7 Canadian HR Reporter, a Thomson Reuters business 2018 More Cases severance, whatsoever, either at civil-law, common-law or under statute, shall be pay- able by CA to you." e termination provision also stated that it would be in effect for the duration of Rapo- so's employment with CA, regardless of any changes to his position with the company or compensation. CA also sent Raposo a document called "corporate new hire paperwork" that includ- ed a second employment agreement, which it asked Raposo to complete and bring with him on his first day of work. e termination provision in this agreement was the same as that in the offer letter, except that it omitted the phrase "including the requirements with respect to the continuation to benefit plans." Raposo signed the first employment agree- ment and brought the paperwork when he started on Aug. 5. Raposo's job duties included encourag- ing customers to purchase additional CA software by advising them of the technical merits of that software — a role considered as "pre-sales" but was part of the sales team. His compensation included a salary and commission. CA provided him with a com- pensation schedule that outlined his target incentive compensation amount and quotas for the upcoming year. e compensation schedule included a disclaimer that it wasn't a contract or guarantee of employment, though it also included the following state- ment: "All CA employees are employed at will, meaning that either CA or the employee may terminate the employment relationship at any time for any reason." At-will employ- ment is a characteristic of employment in many parts of the U.S., and the document originated with CA's parent company. Raposo worked at CA for three years until March 31, 2017, when the company termi- nated his employment as part of a restruc- turing. CA sent him a letter offering a sev- erance package that included pay in lieu of notice in accordance with local employment standards requirements, benefits for an ad- ditional two weeks, payment for earned and unused vacation days, and a severance pay- ment of $11,538.46 if he signed a full and fi- nal release. Raposo opted not to sign the release, so CA didn't give him the severance payment, paying him $4,668.55 pay in lieu of notice and $4,151.95 in vacation pay. It also paid him more than $37,000 in commission that was owed to him. CA later realized it had un- derpaid him by more than $8,000 in vacation pay and offered to make up the difference. Raposo filed a wrongful dismissal com- plaint, arguing that the termination provi- sion in his contract was invalid due to a lack of clarity between the offer letter, the second employment agreement, the at-will employ- ment clause that was part of the compen- sation schedule, and that the omission of continuation of his benefits in the second employment made it unenforceable. e court found that there was no ambi- guity between the two employment agree- ments. e first one that accompanied the employment offer Raposo received in July 2014 specifically stated that it contained the terms and conditions of employment and Raposo accepted them shortly after receiv- ing them. He also signed the original em- ployment agreement on his first day of work, which stated it would be in effect for the du- ration of his employment with CA. e court also found that the second em- ployment agreement that was attached to the corporate new hire paperwork could not have created any ambiguity because the termination provision was the same as in the original — minus the statement on continu- ation of benefits. In addition, neither party signed the second agreement, nor did any- one refer to it afterwards. No one would have thought they were bound to the terms of the second agreement, said the court. As for the compensation schedule, it wasn't an employment agreement and stated as much. e reference to "at-will" employ- ment was intended to apply to U.S. employ- ees and didn't alter the terms of the original agreement, particularly since nothing was signed with regards to it, said the court, not- ing that Raposo acknowledged that he un- derstood the compensation structure and he didn't recall any confusion related to the "at-will" statement — nor did he make any inquiries about it because he had already ac- cepted the terms of the original agreement. As for the omission of any mention of benefits in the termination provision of the second employment agreement, the court found this wasn't contrary to employment standards legislation or the offer letter be- cause it didn't specifically exclude benefits. In addition, CA had told Raposo that both the employment agreement and the offer letter would apply to his employment, and the company did include two weeks of ben- efits after his termination. It was obvious that the true intention of the parties was to include benefits in the termination package, said the court. "In the face of an interpretation that would e consistent with the terms of the offer let- ter, and one that would contradict the offer letter, the reasonable interpretation is the one that would avoid the contradiction," the court said in dismissing Raposo's complaint. For more information see: • Raposo v. CA Canada Company, 2018 Car- swellOnt 12044 (Ont. S.C.J.). Only original employment agreement was signed « from NO AMBIGUITY on page 1 performance." Similarly, in Manchulenko v. Hunterline Trucking Ltd., the court stated: "Constructive criticism and advice given an adequately performing employee on an on- going basis cannot be later re-categorized as some form of employment warning regard- ing incompetence or insubordination." In Duffett v. Squibb Canada Inc., the court found that while the employer had notified the employee that she was not meeting her sales budget, this did not constitute a suffi- cient warning that her employment was in jeopardy if her poor performance continued. By contrast, in Murphy v. Amram's Dis- tributing Ltd., the employer gave the em- ployee a letter that stated: "We must see a significant improvement in your personal sales figures in order to justify your position with Amram's. is improvement must be- gin to show immediately in terms of number of sales, new accounts, core business and weekly bookings… e next three months are crucial to your career. … you must un- derstand that the ball is now in your hands." e court found that while this warning did not specifically state that the employee's em- ployment would be terminated if she failed to meet specific goals, the employer told her when it delivered the letter that her job was on the line. e dismissal was upheld. e same principles apply under employ- ment standards legislation. In Cariboo Chev- rolet Oldsmobile Pontiac Buick GMC Ltd., the B.C. Employment Standards Tribunal ruled that an unfavourable annual employee review did not provide just cause because it did not state that the employee's job was in jeopardy for failure to meet the required standards. For more information see: • Coles v. Dentech Products Ltd., 1994 Car- swellBC 1156 (B.C. S.C.). • Manchulenko v. Hunterline Trucking Ltd., 2002 CarswellBC 1527 (B.C. S.C.). • Duffett v. Squibb Canada Inc., 39 CCEL 37 (N.L. S.C.). • Murphy v. Amram's Distributing Ltd., 1999 CarswellNS 29 (N.S. S.C.). • Cariboo Chevrolet Oldsmobile Pontiac Buick GMC Ltd., Re, (Aug. 20, 2002), BC EST #D378/02 (B.C. Emp. Stndrds Trib.). Colin Gibson is a partner with Harris and Company in Vancouver. He can be reached at (604) 891-2212 or cgibson@ Warning needed « from ASK AN EXPERT on page 2

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