B.C. employer didn't give office manager a chance

Employers have a duty to act in good faith when terminating a probationary employee
|employmentlawtoday.com

Firing a worker who is still on probation isn’t as easy as some employers think. A recent case out of British Columbia underscores the fact that employers have a duty to act in good faith.

In B.C., the law concerning probationary employees is set out in the case of

Jadot v. Concert Industries Ltd.

. In that case the B.C. Supreme Court said:

“The employer, during a probationary period, has the implied contractual right to dismiss a probationary employee without notice and without giving reasons provided the employer acts in good faith in the assessment of a probationary employee’s suitability for the permanent position.”

The British Columbia Provincial Court relied on the Supreme Court’s decision in

Jadot

in ruling the First Nations Education Steering Committee Society (FNESCS) breached its duty of good faith when it terminated Sherry Lipp on Sept. 13, 2002.

Lipp was hired as the office manager on June 6, 2002. Her contract of employment stated that she would be a probationary employee during the first six months of her employment.

Background on Lipp

The court said Lipp was well qualified for the position of office manager. She had been employed for three years with the British Columbia Institute of Technology as an operations manager, responsible for financial management, systems operation and personnel management.

She resigned her position with BCIT to enjoy a one year sabbatical before applying for the position with the FNESCS.

Lipp not given tools to do the job

As office manager, Lipp was required to prepare certain financial reports. But the executive director, Christa Williams, denied her access to the accounting software in the FNESCS computer system.

It was a policy of FNESCS that probationary employees would not receive authorization until they had become permanent employees. But the court said it was inappropriate for Williams to apply this policy to senior managers such as Lipp. The effect of the ban was to prevent Lipp from demonstrating her ability to carry out her duties, the court said.

Employee insubordination

The court was also critical of the relationship between Williams and April Smith. Smith was the finance clerk and she was supposed to report to Lipp.

But Smith did not do so. Instead of reporting to Lipp, Smith went to Williams for direction.

During Smith’s testimony at trial she was, in the court’s words, “arrogant and insulting” to Lipp. She repeated on several occasions that Lipp had no authority because she was a probationary employee. The court said she simply refused to work with Lipp.

“In any other organization, Ms. Smith would have been dismissed for her insubordination to Ms. Lipp,” said Justice Rodgers. “However, Ms. Smith and Ms. Williams had a friendship which extended outside of the office.”

The court said Smith sold Mary Kay products and Williams would often host sales presentations at her home where Smith pitched the product.

“This inappropriate relationship between the executive director and the finance clerk made it impossible for Ms. Lipp to carry out the duties of her employment by exercising authority over the office staff who were to report to her,” said the court.

Employee management

The court was also critical of the way Williams reacted to how Lipp dealt with troublesome employees.

Lipp was given responsibility for employee management at the office. Lipp met with Williams and discussed whether two troublesome workers, who were sisters, should continue as employees.

Lipp began to meet with the sisters to discuss the conflict and determine if a resolution was possible. Those meetings were part of her duties as office manager, the court said. But Williams did not approve of the closed door meetings, nor did other employees who were supportive of the sisters.

At trial, Williams was critical of the way Lipp handled the problem with the sisters.

“This criticism was unfounded,” said Justice Rodgers. “Ms. Williams did not permit Ms. Lipp to address an employee problem which fell within her area of responsibility as office manager.”

Who made the decision to fire Lipp?

At trial, it was suggested that the decision to terminate Lipp was made by the FNESCS personnel committee.

But testimony showed the committee was no more than a “rubber stamp” for decisions made by Williams.

“The decision-making authority of the personnel committee was a sham,” said Justice Rodgers. “The decision to dismiss Ms. Lipp was made by Ms. Williams.”

The previous office manager

The court also heard testimony from Monty Palmantier who was employed as office manager at FNESCS from July 2001 to December 2001.

He was a reluctant witness because he represents Lake Babine on the FNESCS board, the court said.

But he agreed that his relationship as office manager with Williams was very difficult.

“He encountered many of the same problems that were met by Ms. Lipp,” said Justice Rodgers. “He posed a very interesting question. He asked, ‘Does Ms. Williams want an office manager?’”

The court said it had no doubt Williams wished to continue as the office manager and had no intention of allowing Lipp to demonstrate her suitability for the position of office manager.

Damages

Lipp was hired on at an annual salary of $59,534 per year plus her benefits package.

At trial, no value was placed on the employee benefits package. For the purposes of determining damages, the court said it assumed she was paid a monthly salary with a total value slightly in excess of $5,000.

Lipp was given one month’s pay in lieu of notice. The court said this was not adequate and it would have given her three months’ pay.

Therefore, the court awarded her an additional two months’ pay. But since the amount of damages exceeded the jurisdictional limit of the Provincial Court, the court awarded her the sum of $10,000.

For more information see:

Lipp v. First Nations Education Steering Committee Society

, 2005 CarswellBC 2023, 2005 BCPC 370 (B.C. Prov. Ct.)

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