An employer must clearly indicate that failure to change will result in termination
In March 1999 Jeff Bandura, a former professional hockey player, was hired to head up Basic Sports Nutrition, a division of Vidamar Holdings Corp. Basic Sports was in the business of developing, marketing and selling sports nutrition food products and vitamins.
Prior to joining Basic Sports Mr. Bandura had several discussions with the president of Vidamar, Adolf Huckschlag, about the terms of his employment. Mr. Bandura provided a written document outlining his proposed terms. Mr. Huckschlag accepted these terms with little comment.
The agreement provided for a two-year term of employment with a base salary of $65,000 per annum plus three per cent commission on Basic’s total gross sales. He also earned an annual contribution to his RRSP of $5,000, a vehicle allowance as well as gas and cellular phone expense. He was to participate in a medical, dental and extended health care plan.
Mr. Bandura’s job duties included making sales calls, looking after Basic’s sales force, working on label text, monthly specials on products and the publication of a brochure about Basic’s products. Because of his interest in cycling, Mr. Bandura focused his promotion efforts on sponsoring cycling events and athletes. He attended the events, set up a display of Basic’s products and handed out samples.
By the summer of 2000 Basic’s sales had failed to reach the targeted levels outlined at the outset of Mr. Bandura’s employment. As a result on July 6, 2000, Mr. Bandura’s employment was terminated.
Mr. Bandura brought an action for wrongful dismissal, claiming that he was dismissed without cause eight months before the two-year term of his employment agreement was to expire.
Mr. Bandura sought damages for the eight-month period, plus the three per cent commission on total gross sales over the two-year period. He sought the balance of the contribution to his RRSP amounting to $4,400. Finally he claimed $3,771 in dental expenses incurred which were not covered by a dental plan.
There was a dispute with respect to the commission. Mr. Huckschlag took the position that the agreement provided that Mr. Bandura be paid a base salary of $65,000 and that he would be paid three per cent commission on the total gross sales only if three per cent of the gross sales were equal to or exceeded $65,000. Mr. Bandura argued that he was entitled to three per cent of Basic’s gross sales in addition to his $65,000 salary.
Mr. Huckschlag also argued that Mr. Bandura was dismissed for cause because he failed to meet sales targets. In June 2000 Mr. Huckschlag sent Mr. Bandura a letter outlining a number of concerns about his performance. These included the amount of his cellular phone bill and gas expenses, the lack of reports for time spent on the road and on sales calls and the amount of time and money being spent on cycling events with little return.
Mr. Bandura did make efforts to change to reflect the concerns raised in the letter. However the letter did not indicate that the sales figures were so poor that Mr. Bandura would be terminated if they did not improve.
On the issue of the commission on gross sales, the Court found that if Huckschlag’s interpretation were correct then total gross sales would have had to reach $2.16 million for the first twelve-month period of Mr. Bandura’s employment in order for him to have earned the commission. This was unrealistic given the fact that Mr. Huckschlag testified that he would have been happy with sales of $600,000 for the year. Such an interpretation would make the remuneration term meaningless in practice. On the other hand the interpretation put forward by Mr. Bandura was feasible. Given the conflicting interpretations the Court concluded that Mr. Bandura’s interpretation was correct.
On the issue of whether Mr. Bandura was dismissed for cause, the Court held that the dismissal was without cause and without notice. While it was correct that Mr. Bandura was not able to raise Basic’s sales to the level discussed at the time of his hiring it was not a condition of his employment that he achieve a certain level of sales. Further when concerns such as too many cycling events and lack of reports were raised he changed his behaviour accordingly to address the concerns. There was no evidence that he was ever warned that he would be terminated if his performance did not improve or that he was considered incompetent in carrying out his duties.
The Court agreed that damages for wrongful dismissal was the salary and benefits the plaintiff would have been entitled to receive over the period of the balance of the term in the agreement subject to his duty to mitigate. This included the commission on total gross sales. The Court also held that Mr. Bandura was entitled to his dental account in the amount of $3,771. Basic agreed to provide dental coverage but was unable to because Vidamar did not have enough employees to qualify for a medical, dental and extended health care plan. The fact that it was not able to provide such coverage was not sufficient to modify the agreement.
For more information:
• Bandura v. Vidamar Holdings Corp., 2001 BCSC 1463.
Prior to joining Basic Sports Mr. Bandura had several discussions with the president of Vidamar, Adolf Huckschlag, about the terms of his employment. Mr. Bandura provided a written document outlining his proposed terms. Mr. Huckschlag accepted these terms with little comment.
The agreement provided for a two-year term of employment with a base salary of $65,000 per annum plus three per cent commission on Basic’s total gross sales. He also earned an annual contribution to his RRSP of $5,000, a vehicle allowance as well as gas and cellular phone expense. He was to participate in a medical, dental and extended health care plan.
Mr. Bandura’s job duties included making sales calls, looking after Basic’s sales force, working on label text, monthly specials on products and the publication of a brochure about Basic’s products. Because of his interest in cycling, Mr. Bandura focused his promotion efforts on sponsoring cycling events and athletes. He attended the events, set up a display of Basic’s products and handed out samples.
By the summer of 2000 Basic’s sales had failed to reach the targeted levels outlined at the outset of Mr. Bandura’s employment. As a result on July 6, 2000, Mr. Bandura’s employment was terminated.
Mr. Bandura brought an action for wrongful dismissal, claiming that he was dismissed without cause eight months before the two-year term of his employment agreement was to expire.
Mr. Bandura sought damages for the eight-month period, plus the three per cent commission on total gross sales over the two-year period. He sought the balance of the contribution to his RRSP amounting to $4,400. Finally he claimed $3,771 in dental expenses incurred which were not covered by a dental plan.
There was a dispute with respect to the commission. Mr. Huckschlag took the position that the agreement provided that Mr. Bandura be paid a base salary of $65,000 and that he would be paid three per cent commission on the total gross sales only if three per cent of the gross sales were equal to or exceeded $65,000. Mr. Bandura argued that he was entitled to three per cent of Basic’s gross sales in addition to his $65,000 salary.
Mr. Huckschlag also argued that Mr. Bandura was dismissed for cause because he failed to meet sales targets. In June 2000 Mr. Huckschlag sent Mr. Bandura a letter outlining a number of concerns about his performance. These included the amount of his cellular phone bill and gas expenses, the lack of reports for time spent on the road and on sales calls and the amount of time and money being spent on cycling events with little return.
Mr. Bandura did make efforts to change to reflect the concerns raised in the letter. However the letter did not indicate that the sales figures were so poor that Mr. Bandura would be terminated if they did not improve.
On the issue of the commission on gross sales, the Court found that if Huckschlag’s interpretation were correct then total gross sales would have had to reach $2.16 million for the first twelve-month period of Mr. Bandura’s employment in order for him to have earned the commission. This was unrealistic given the fact that Mr. Huckschlag testified that he would have been happy with sales of $600,000 for the year. Such an interpretation would make the remuneration term meaningless in practice. On the other hand the interpretation put forward by Mr. Bandura was feasible. Given the conflicting interpretations the Court concluded that Mr. Bandura’s interpretation was correct.
On the issue of whether Mr. Bandura was dismissed for cause, the Court held that the dismissal was without cause and without notice. While it was correct that Mr. Bandura was not able to raise Basic’s sales to the level discussed at the time of his hiring it was not a condition of his employment that he achieve a certain level of sales. Further when concerns such as too many cycling events and lack of reports were raised he changed his behaviour accordingly to address the concerns. There was no evidence that he was ever warned that he would be terminated if his performance did not improve or that he was considered incompetent in carrying out his duties.
The Court agreed that damages for wrongful dismissal was the salary and benefits the plaintiff would have been entitled to receive over the period of the balance of the term in the agreement subject to his duty to mitigate. This included the commission on total gross sales. The Court also held that Mr. Bandura was entitled to his dental account in the amount of $3,771. Basic agreed to provide dental coverage but was unable to because Vidamar did not have enough employees to qualify for a medical, dental and extended health care plan. The fact that it was not able to provide such coverage was not sufficient to modify the agreement.
For more information:
• Bandura v. Vidamar Holdings Corp., 2001 BCSC 1463.
