Employer’s commitment to job security is not a guarantee of indefinite employment to its employees
In January 1995 Atamah Singh lost his job as a result of a company-wide reorganization and restructuring operation by British Columbia Hydro and Power Authority (BC Hydro). At the time of his dismissal Mr. Singh had worked at BC Hydro for 18 years. He started as a janitor, but by the time of his departure he was the mailroom supervisor.
Following his dismissal Mr. Singh brought an action against BC Hydro for wrongful dismissal arguing that his termination was a breach of contract which provided employment until retirement. He further alleged that his termination was discriminatory on the basis that he was a visible minority and because he was under medical supervision.
BC Hydro conceded that Mr. Singh had been terminated without cause under a reorganization plan but that it had fulfilled its obligations to Mr. Singh by providing a compensation package of 20.5 months of remuneration in lieu of reasonable notice. At trial the Court found in favour of BC Hydro and dismissed Mr. Singh’s action. Mr. Singh appealed the findings of the trial judge.
Between 1988 and 1990 numerous documents were published by BC Hydro for its employees. These documents indicated BC Hydro’s commitment to employment security for its employees. These documents were the basis for Mr. Singh’s claim that he had a contract with BC Hydro providing for employment until retirement.
Although BC Hydro was committed to employment security, it terminated 555 of its employees in late 1994 and early 1995. Within the division in which Mr. Singh worked, 13 managers in total lost their jobs. From October 1994 to January 1995, Mr. Singh was absent from work while being treated for depression.
He received his notice of termination on Jan. 17, 1995. He was provided with 2.5 months’ notice of termination and offered 18 months’ salary. He was given the opportunity to seek legal advice.
At trial Mr. Singh argued that the various documents produced by BC Hydro formed a contractual term between himself and his employer. After considering the law the trial judge held that policy manuals and memoranda from the employer, particularly those distributed years after employment has commenced, can only be given contractual effect in very specific and stringent conditions. These conditions were not present in this case.
The language in the memoranda were qualified in that they were meant to express the company’s intention to use its best effort to provide job security within the duration of the five-year manpower plans prepared by BC Hydro.
The Court of Appeal agreed with the position of the trial judge that the memoranda did not form a contractual term between Mr. Singh and BC Hydro. The memoranda merely expressed a belief that BC Hydro expected to fulfill its promise of job security to the employees. It did not form part of an employment contract between BC Hydro and its employees.
In addition to considering the language of the memoranda, the Court also looked at the context in which they were published. The memoranda were issued regularly and the depth of commitment changed throughout the years. The memoranda were sent to all employees. If the memoranda were intended to be contractual there would have been provisions for the employees to acknowledge their acceptance of the change in their contracts of employment. For these reasons the Court agreed with the conclusion of the trial judge that the memoranda did not reveal an intention by the employer for the terms of the memoranda form part of the employees’ contracts.
The Court of Appeal did find that the trial judge erred in holding that the notice period of 20.5 months was reasonable. The Court held that the trial judge did not take into account the promises of job security and the termination of Mr. Singh on his return to work after a two-month absence for medical reasons. Finding that these factors were significant the Court increased the notice period from 20.5 to 27 months.
For more information:
• Singh v. British Columbia Hydro & Power Authority, 2001 BCCA 695.
Following his dismissal Mr. Singh brought an action against BC Hydro for wrongful dismissal arguing that his termination was a breach of contract which provided employment until retirement. He further alleged that his termination was discriminatory on the basis that he was a visible minority and because he was under medical supervision.
BC Hydro conceded that Mr. Singh had been terminated without cause under a reorganization plan but that it had fulfilled its obligations to Mr. Singh by providing a compensation package of 20.5 months of remuneration in lieu of reasonable notice. At trial the Court found in favour of BC Hydro and dismissed Mr. Singh’s action. Mr. Singh appealed the findings of the trial judge.
Between 1988 and 1990 numerous documents were published by BC Hydro for its employees. These documents indicated BC Hydro’s commitment to employment security for its employees. These documents were the basis for Mr. Singh’s claim that he had a contract with BC Hydro providing for employment until retirement.
Although BC Hydro was committed to employment security, it terminated 555 of its employees in late 1994 and early 1995. Within the division in which Mr. Singh worked, 13 managers in total lost their jobs. From October 1994 to January 1995, Mr. Singh was absent from work while being treated for depression.
He received his notice of termination on Jan. 17, 1995. He was provided with 2.5 months’ notice of termination and offered 18 months’ salary. He was given the opportunity to seek legal advice.
At trial Mr. Singh argued that the various documents produced by BC Hydro formed a contractual term between himself and his employer. After considering the law the trial judge held that policy manuals and memoranda from the employer, particularly those distributed years after employment has commenced, can only be given contractual effect in very specific and stringent conditions. These conditions were not present in this case.
The language in the memoranda were qualified in that they were meant to express the company’s intention to use its best effort to provide job security within the duration of the five-year manpower plans prepared by BC Hydro.
The Court of Appeal agreed with the position of the trial judge that the memoranda did not form a contractual term between Mr. Singh and BC Hydro. The memoranda merely expressed a belief that BC Hydro expected to fulfill its promise of job security to the employees. It did not form part of an employment contract between BC Hydro and its employees.
In addition to considering the language of the memoranda, the Court also looked at the context in which they were published. The memoranda were issued regularly and the depth of commitment changed throughout the years. The memoranda were sent to all employees. If the memoranda were intended to be contractual there would have been provisions for the employees to acknowledge their acceptance of the change in their contracts of employment. For these reasons the Court agreed with the conclusion of the trial judge that the memoranda did not reveal an intention by the employer for the terms of the memoranda form part of the employees’ contracts.
The Court of Appeal did find that the trial judge erred in holding that the notice period of 20.5 months was reasonable. The Court held that the trial judge did not take into account the promises of job security and the termination of Mr. Singh on his return to work after a two-month absence for medical reasons. Finding that these factors were significant the Court increased the notice period from 20.5 to 27 months.
For more information:
• Singh v. British Columbia Hydro & Power Authority, 2001 BCCA 695.
