Canadian Employment Law Today

Canadian Employment Law Today | 7 Canadian HR Reporter, a Thomson Reuters business 2018 More Cases Agreement required reasonable effort by employer « from EMPLOYER PUNISHED on page 1 thought of either retiring or taking a leave of absence. He met with a member of Nex- en's human resources department to dis- cuss his options and get some information about the company's policy on leaves of ab- sence. e HR member told him that with the uncertainty of the corporate takeover, there was no guarantee Jonasson would have a job to return to if he took a leave of absence. e HR member was aware Nexen was considering cutting senior staff, but didn't mention it to Jonasson as it was in the early stages of planning. Only a small group of top-level managers knew about it and they didn't want rumours and misinforma- tion to spread before they had a concrete plan in place. In late May, the vice-president in charge of the technology group held a meeting with employees in which he expressed optimism about the takeover, noting that the new parent corporation placed a high priority on the type of research and de- velopment done by the technology group. However, one month later Nexen's execu- tive team decided that senior management ranks should be reduced by 24 per cent. In the meantime, Jonasson decided he didn't want to retire, so he requested and was approved for a seven-month leave of absence running from Oct. 1, 2013, to April 1, 2014. Jonasson and the vice-president — neither of whom were yet aware of the impending job cuts — signed a leave of ab- sence agreement that stated Nexen would "make reasonable efforts to find me a suit- able role within the organization upon my return to active duty," though the company "is under no obligation to return me to my original position or one of equivalent level." e agreement further stipulated that if a suitable role wasn't found after reasonable efforts were made to find one, or Jonasson declined an offer for a suitable role, Nexen would consider him to have resigned and he would not be eligible for "any severance, termination payment, bonus, or any other provision, including any company spon- sored benefits." In addition to the agreement, Nexen's leave policy stated that it expected employ- ees on leave to avoid other employment un- less approved. Employee's job identified as potential cut before leave began Shortly before Jonasson went on leave, Nexen's senior HR officials began identify- ing senior managers who could potentially be let go. e list was fluid and kept chang- ing, but Jonasson's name made it to the first list and remained on it thereafter because there were higher-rated managers on the chopping block for whom the company was trying to find alternate positions. Jonasson began his leave on Oct. 1 and Nexen divided his job responsibilities among other employees. Jonasson re- mained on the cut list and the company tried to find placements for some of the in- dividuals on the list, but not any special ef- forts for Jonasson. It also became apparent while Jonasson was on leave that the com- pany could function without him, so when the final cut list was determined in January 2014, Jonasson was on it. Nexen decide to officially cut Jonasson's position on April 1, the day he was sched- uled to return from his leave of absence. e vice-president called Jonasson in Ari- zona — where he was spending his leave — on March 3 to tell him his employment would end as of April 1 with no severance payment, as the company treated it as a deemed resignation under the leave of ab- sence agreement. e company wanted to inform him in advance to give him the choice of staying in Arizona rather than coming back to no job. Jonasson was surprised since the leave of absence agreement required Nexen to make a reasonable effort to find him a posi- tion upon his return. He contacted several people at Nexen to find out what happened and if he had been considered for other po- sitions. e court found the leave of absence agreement wasn't binding, as Nexen was aware that deep cuts to management were pending, while Jonasson was not. e com- pany also knew Jonasson's name was on the cut list before he left on his leave of absence and it was likely no efforts to find him a role would be successful, but said nothing — and in fact it took steps to keep the news secret until it was ready to reveal its plans to employees, said the court. e court also found that the leave of ab- sence agreement's allowance for a deemed resignation against Jonasson's wishes re- sulted in him retroactively waiving his en- titlement to notice and severance "under circumstances unknown to the employee." is made the agreement contrary to Al- berta's Employment Standards Code and therefore void, the court said. Considering Jonasson's age, his 22 years of service with Nexen and its predecessor, the importance of his position, and the lim- ited transferability of his recent experience and knowledge — his final three years at Nexen were spent developing a new tech- nology that wasn't ready for field use — the court determined Jonasson was entitled to 23 months' notice of dismissal. In addi- tion to liability for the notice period, Nexen was ordered to pay Jonasson $20,000 in punitive damages — a "little more than nominal" amount for Nexen's conduct that wasn't malicious, but "displayed an outra- geous degree of negligence" toward Jonas- son — "just sufficient to send a message of denunciation and deterrence," the court concluded. For more information see: • Jonasson v. Nexen, 2018 CarswellAlta 1907 (Alta. Q.B.). The employee's name made it to the first list of potential cuts and remained on it thereafter CREDIT: ANTON FOLTIN/SHUTTERSTOCK

• Cover