Employer’s threat to recover damage cost from worker doesn’t work

Note threatening to deduct expenses changed employment contract and constructively dismissed worker: Court
By Jeffrey R. Smith
|Canadian Employment Law Today|Last Updated: 06/25/2015

A British Columbia worker was constructively dismissed when his employer told him following a few incidents of equipment damage that it would be charging him for the cost of any additional damage that was his fault, the B.C. Supreme Court has ruled.

Ralph Rothberger was a heavy equipment operator for Concord Excavating and Contracting in Surrey, B.C., hired in 2001. He primarily worked as a seasonal excavator operator, working from early spring to late fall. During the busy season, he often worked more than eight hours a day and 40 hours a week but received no overtime pay. During the off-season, Rothberger didn’t work and relied on Employment Insurance payments for income.

Rothberger was considered a good employee, receiving several pay raises and being called back every spring when work became available. He had no discipline on his file.

In the spring and summer of 2012, Rothberger was involved in three incidents — two causing damage and equipment breakdown and one causing a power arc leading to a power failure at a work site. In one of the incidents causing damage, the excavator’s bucket came off and a piece of equipment was lost in a ditch. The incidents also resulted in downtime from temporary shutdowns.

Worker received note with paycheque

On Aug. 31, 2012, Rothberger received a note with his pay slip written by Concord’s bookkeeper — who was also the wife of the company principal — that stated: “As Concord has replaced two (2) wedges do (sic) to operator fault, the charge of any further will be made to you.”

Rothberger didn’t acknowledge that the equipment breakdowns and loss were due to his misconduct or failure to maintain the equipment, so he tried to talk to Concord’s principal about the note. He approached the principal at an event at a co-worker’s home about a month later, but the principal waved him off, telling him to forget about it. The principal later testified that he hadn’t intended to pursue payment from Rothberger, despite the note. However, Rothberger wasn’t told the company didn’t intend to obtain payment and he felt his concerns were being dismissed.

The principal testified Rothberger approached him again the following week at a safety meeting, but he told Rothberger it wasn’t the time or place to discuss it. Rothberger claimed he had no memory of having that conversation.

Rothberger investigated and discovered the B.C. Employment Standards Act prohibited employers from demanding payment from employees without consent. As a result, he left copies of the relevant sections of the act in his employer’s mailbox on Oct. 1. The principal’s wife — Concord’s bookkeeper — responded with an angry email outlining the incidents and stating “your lack of safety checks and lack of safety requirements are noted and filed should I need them for any future legal action you may want to pursue.”

Employer’s response to inquiries last straw for employee

After receiving the email, Rothberger decided he could no longer work for Concord and, on Oct. 2, he told the supervisor of the work site where he was working that day that he was quitting and walked off the job.

Rothberger sued for constructive dismissal, claiming the note on his pay slip amounted to a change to his terms of employment and the Oct. 1 email was an implied threat. Together, these constituted constructive dismissal, said Rothberger.

Rothberger also filed a claim for unpaid overtime and was awarded back pay for the six months prior to the day he stopped working for Concord. Six months was the maximum period of time for which unpaid overtime could be awarded under the Employment Standards Act.

The court found after Rothberger received the note, he made attempts to discuss the matter but was brushed off. The note clearly stated that Concord was going to deduct future costs from Rothberger’s paycheque, which was contrary to the act, and when Rothberger pointed out the illegality of it he was answered with a threatening and provocative email, not to mention “wholly unresponsive to (Rothberger’s) legitimate effort to have (Concord) resile from its stated intention to charge him with respect to future incidents,” said the court.

The court also found the note with his paycheque warning of the deduction of an unspecified amount “was a material change to the employment contract, which entitled (Rothberger) to receive an hourly wage for hours worked.” In addition, the court agreed it was contrary to the act and an infringement of Rothberger’s rights, since the vagueness of the note gave no indication of how much the threatened deductions would be.

Since Concord’s actions constituted a change in Rothberger’s compensation package — which was at the heart of the employment contract — and amounted to constructive dismissal, the court found Rothberger didn’t have to continue working and wait for the deduction policy to take effect.

The court also found Concord’s conduct in how it communicated with Rothberger breached the “fundamental term of any employment relationship that the employer will treat the employee with civility, decency, respect and dignity.”

The court determined if Rothberger had not been constructively dismissed, he would have worked full-time until the end of the busy season in mid-November 2012 and started again in early January, as in most other years. Rothberger found new employment in early March 2013, so the court found he was entitled to compensation for 12 weeks of lost employment. With vacation pay added, the total damage entitlement was $15, 264.

For more information see:

Rothberger v. Concord Excavating & Contracting Ltd., 2015 CarswellBC 1191 (B.C. S.C.).

Add Comment

  • *
  • *
  • *
  • *