Canadian Employment Law Today
Sep 26, 2018

Worker fired after 6 months gets 6 months’ pay in lieu of notice

Employer’s promises weren’t part of employment agreement, but they helped induce worker to leave secure employment
By Jeffrey R. Smith

A British Columbia worker who was persuaded to leave his old job for a new position but was fired six months later has been awarded six months’ pay in lieu of notice by the B.C. Supreme Court.

James Greenlees, 44, was an outside sales representative for a landscaping construction company in Langley, B.C., when he was contacted in January 2017 by the sales manager for Starline Windows, a designer and builder of windows for residential properties in Surrey, B.C. Though Greenlees wasn’t looking to leave his current position and didn’t have experience selling windows, he met with Starline’s sales manager at Starline’s office.

The sales manager told Greenlees his “vision for growth for the company and opportunities for the future” and offered him a job as a front-line salesperson in the lower mainland of B.C., saying the position would be working primarily with new construction projects with occasional work in renovation construction projects — with the new construction projects having the potential of earning Greenlees at least $100,000 per year after a period of six to nine months to “actually get your feet going.” The job offer included a salary of $3,500 per month with three per cent commission on single family projects and one-and-one-half per cent commission on multifamily and large projects, with a cap of $500,000 on the latter. The Starline sales manager said after three months, the commission on single family projects would be increased to six per cent, while the job offer stated compensation would be “up for review on or before the three-month probation date.”

The stated salary represented only a small increase from Greenlees’ salary with his current job, but the greater earnings potential from commissions and increased freedom that he perceived tempted him to take the position with Starline. He signed the offer of employment on Feb. 18, 2017, and resigned from his existing employment.

Assignment not what worker expected

Greenlees started working for Starline on March 3. Within a couple of weeks, the sales manager told him he would be working on renovation projects rather than new construction projects. Renovation projects had less earning potential, but the sales manager said the move would be temporary and Greenlees would be put back on new construction projects at the end of his probationary period.

Greenlees completed his probationary period in June 2017, but he remained on renovation projects and his commission stayed at three per cent. The sales manager told him to be patient, but the manager was fired in August. Greenlees inquired about the sales manager position, but was told another person had already been hired for new residential construction and Greenlees would remain handling renovation projects.

On Sept. 14, 2017, Starline terminated Greenlees’ employment. The company didn’t officially indicate any cause for dismissal, so the termination was without cause. It gave him one week’s wages and one week’s commission based on his six months of service with the company. It also opted not to provide him with a reference letter.

Greenlees began to look for work immediately, but he wasn’t able to find work for seven months, when he found a sales position with a building products company in April 2018. He sued Starline for wrongful dismissal, claiming damages for reasonable notice and inducement from secure employment with bad-faith promises regarding his compensation and position with new construction projects.

The court noted that previous cases had established that a short-term employee of less than one year of service who is dismissed without cause, without extraneous circumstances such as bad-faith employer conduct or a difficult employment market, usually deserves a reasonable notice period of two-to-three months, pending adjustment for age, length of service, and job responsibility. However, there were other factors to consider — Greenlees’ claim of inducement and bad-faith conduct by Starline when it didn’t put him in the new construction sales position and limited his earnings potential that had been promised and had influenced his decision to join Starline.

Forecasts weren’t guarantees

The court found that Greenlees’ discussions of the position at Starline with the sales manager at the time produced reasonable expectations for Greenlees regarding income and responsibilities and should carry some weight. However, they were based on forecasts and were not guarantees, said the court, pointing out that the job offer and employment agreement set out Greenlees’ compensation to start and indicated it would be “up for review” after the probationary period elapsed, but there was no set increase guaranteed. While the sales manager’s representations were “bait” that induced Greenlees, once inducement was determined it didn’t matter that Starline didn’t follow through with them in the context of reasonable notice. If those representations weren’t in the employment contract, Starline’s failure to meet them wasn’t a breach of the employment contract, the court said.

The court also found that the amount of time it took Greenlees to find new employment demonstrated the limited availability of alternate similar employment. This, along with Greenlees’ age and the inducement were factors to consider in determining the reasonable notice entitlement.

The court determined that Greenlees was entitled to six months’ notice of termination. After subtracting the one week’s salary and commission that Starline had already paid to Greenlees, Starline was on the hook for $28,400.88 pay in lieu of notice, plus $8,000 in costs.

For more information see:

Greenlees v. Starline Windows Ltd., 2018 BCSC 1457 (B.C. S.C.).

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