If employee agrees to change, it's not constructive dismissal: B.C. Supreme Court

Court says offering retiring employees ability to ease into retirement by working part-time is 'valuable' consideration
|employmentlawtoday.com

A worker in the logging industry who was nearing retirement, and had his hours reduced to part-time, had his claim for constructive dismissal rejected by the British Columbia Supreme Court.

John Balderson worked as a parts person for heavy equipment in the logging industry for about 35 years. In 1994 he began working for a predecessor of Marcels Equipment. His primary duties first related to logging equipment manufactured by Barko Hydraulics but sales of new Barko equipment in B.C. came to end. As a result, sales of parts for Barko equipment began to decline.

But in July 2002, Marcels Equipment took on the line of equipment manufactured by Volvo and its business began to grow.

Employer asks about retirement plans

The president of the company first asked about Balderson’s retirement plans in December 2001 when Balderson was turning 64. At that time, Balderson said he did not want to retire.

They had a similar conversation in December 2002 when he turned 65, and Balderson again said he did not want to retire. However, he told his employer that if the job got too hard to handle, he could reduce his workweek to four days and possibly shorter.

When they spoke in December 2003, when Balderson turned 66, the topic of retirement did not really come up. But the president told Balderson he had done a good job in the preceding year and that he was looking forward to the following year.

New hire contemplated

In June 2004 the Volvo aspect of the business was continuing to grow. There was need for additional help in the parts area, but the economics did not really justify hiring an extra full-time employee.

The president talked to one of the company’s managers about the situation, and asked if Balderson had talked any more about his retirement plans. The manager said he had approached Balderson about his retirement plans, and Balderson said he would leave at any time the company wanted him to leave.

The manager testified he told Balderson that he did not want him to quit, but the company was considering the hiring of a new parts person who could learn the Barko business from Balderson.

Balderson testified that when the manager asked him about retirement, he said he wanted to retire in a couple of years. He said he told the manager he thought it was a good idea to hire a new person.

Company pitches idea of working half days

The company president and the manager had a discussion and came up with the idea that Balderson might be interested in easing into retirement by working half days.

The critical conversation between the manager and Balderson took place on June 29, 2004. Balderson said the manager came to him and said “we have decided that you should work half days in the afternoon five days a week for half the salary.” Balderson said he said “okay.”

The manager said he went to Balderson and said “we have decided that we would like you to work half time, how does that work for you?” The manager said Balderson replied that it would be great.

Balderson began working half days at the beginning of July 2004. During that month, three issues arose in his mind.

The first was the start date of the new employee, because he had not begun in mid-July as anticipated.

The second was how overtime worked by Balderson was going to be treated.

The third, and most important, was that Balderson decided that he preferred to work his half time amount in a two-and-a-half day block rather than working half of each day. (It’s not clear from the court documents, but apparently the company resisted this idea.)

In the end, Balderson concluded the company had no respect for him and, after seeking legal advice, stopped coming to work on July 27, 2004, and his lawyer wrote to Marcels Equipment on the following day.

Was Balderson constructively dismissed?

Balderson argued his employer made a unilateral change to his employment contract and that there was no consideration for such a change.

But the court disagreed. It said the manager posed the idea of going to half days as a question, with no suggestion that Balderson would be terminated or have any other adverse consequences if he declined to work half time.

The court said Balderson himself said he replied “okay” when asked about the possible change.

“If he was not asked a question and he was reserving his decision on the change, there would have been no reason for him to have said ‘okay,’” said Justice David Tysoe of the British Columbia Supreme Court.

Justice Tysoe also rejected a claim by Balderson that he could not afford to work half-time because he did not tell the manager that during the June 29, 2004, meeting.

“I find that Mr. Balderson accepted the change but then became dissatisfied with the new arrangement,” said Justice Tysoe.

Court rules there was consideration

The court said there was consideration for the change to the employment contract.

“In my opinion, it is valuable consideration to allow an employee who has passed the normal retirement age to work part-time,” said Justice Tysoe.

The court dismissed his action for constructive dismissal.

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