League and Williams Lawyers

Tag: compensation for length of service

  • Wrongful dismissal? Legal Recourse in BC (Video Blog)

    Wrongful dismissal? Legal Recourse in BC (Video Blog)

    Welcome to this week’s blog on the law.  This week I will explain why, when you have been fired from your job without good reason, in other words you have suffered wrongful dismissal, you might make a complaint with the BC Employment Standards Branch, or why you might be better off pursuing your claim outside that process.

    Notice or Pay in Lieu of Notice Unless there is Just Cause to Terminate

    Let’s start with some basic principles.  First, an employer may fire an employee for almost any reason, provided they give the employee adequate notice of the termination, and either allow them to work through that notice, or provide them with the pay in lieu of the notice period.  In other words, an employer does not have to keep a person employed if they are unhappy with them, but they do have to pay to get rid of them.  The exception to this general rule is that an employer may not terminate someone for a reason that is discriminatory.  Discriminatory termination is a human rights breach under the BC Human Rights Code.  A decision to terminate someone is discriminatory, whether the employer intends it or not, if the decision is based on the race, colour, ancestry, religion, marital status, family status, physical or mental disability, sex, sexual orientation, or gender identity.  When an employer fails to provide adequate notice or pay in lieu of notice, and there is not “Just Cause”, the termination is considered to be wrongful dismissal.

    We will cover human rights breaches in another blog.

    What is “Just Cause” when employment is terminated?

    Second, an employer may fire an employee for cause, and avoid giving any notice or paying any severance, if the employee’s conduct is so egregious that the employment relationship cannot continue.  This is called termination “for cause”. We will cover what justifies cause for termination in other blogs.

    For now, if an employer does not terminate an employee for a reason that amounts to cause, they are responsible to pay the employee the minimum severance required under the BC Employment Standards Act.  The Employment Standards Act is a written law, or statute, enacted by the BC government, and is enforced by a government agency called the Employment Standards Branch.

    The minimum severance under the Employment Standards Act amounts to one week of wages after three months of service, 2 weeks of wages after 12 months of service, and after three years of service an amount equal to three weeks wages plus an additional week for every year of service after three years, up to a maximum of 8 weeks.

    Employment Standards is Not the Only Option for Recourse from Wrongful Dismissal

    Note that I said the Employment Standards Branch cannot award more than 8 weeks of severance as a maximum.  Many employees who face wrongful dismissal jump to making a claim under employment standards thinking it is their only recourse.  This is not correct.  Outside of the employment standards process, the employee can make a demand for severance based on common law.  Common law does not come from a piece of legislation, like the Employment Standards Act, rather, common law comes from the decisions of judges in courtrooms that have developed over time.

    The common law on wrongful dismissal is generally much more generous than the law under the Employment Standards Act.  As a general rule of thumb, an employee may receive about a month of severance for every year of service with an employer, which is three to four times that provided under the Employment Standards Act.

    The amount of severance paid under common law will vary from case to case, and will depends on a variety of factors, such as the age of the employee, their experience and qualifications, their seniority and generally how difficult it will be for the employee to find a similar job.  Many employees can make a demand for common law severance and negotiate that amount with the employer without the help of a lawyer.  If the negotiation is not successful, the employee can file a claim in BC small claims court, and seek up to $25,000 of severance in that court.  Larger claims must be heard in the BC Supreme Court.

    Larger Wrongful Dismissal Claims Often Benefit from Legal Guidance

    In more serious cases, where the length of employment has been longer, such as more than 4 or 5 years, the employee might seek the help of a lawyer to pursue their claim.  Larger severance claims often result in the employer alleging they had cause to fire an employee, even if they didn’t, just so they can avoid paying the money.  An employer will often put in issue the employee’s competence or honesty, and having an objective advocate to combat these allegations is important and will remove much of the stress from the employee.

    I hope you have learned something from this blog.  Please feel free to like us on Facebook, follow us on Twitter and subscribe to our YouTube channel to receive notice of our future weekly video blogs on the law.  If you have employment issues you would like to discuss, League and Williams offers free consultations and may be contacted at either 250-888-0002 or via email at info@leaguelaw.com.

  • When is a Mariner Entitled to Severance Pay? 7 Key Questions to Answer

    When is a Mariner Entitled to Severance Pay? 7 Key Questions to Answer

    “Get Off My Ship, You’re Fired”: When is a Mariner Entitled to Severance Pay?

    When is a mariner entitled to a notice of termination of their employment, or to be paid out for the time instead (called severance pay), is an unfortunately common question. In some cases, a mariner is left with no right to severance, but in many others, the mariner may overlook significant entitlements because they do not understand their rights.  There are, of course, always at least two sides to every story, so in the next Legal Net, I will outline the steps a prudent employer should take to terminate an undesirable employee, but for now, a mariner who faces the dismal view of being fired themselves should ask the following question.

    Question 1: Am I Unionized?

    Unionized employees’ rights to dispute termination or seek severance pay are limited by the terms of the collective bargaining agreements (“CBA”) between their unions and their employers.  These CBAs represent a trade-off where the employee assumes certain protections offered by agreement (such as wage rates, benefits, seniority entitlements, pension, a grievance process, etc.), in exchange for giving up other rights.  A unionized employee must dispute their termination through the grievance process under the CBA and cannot pursue severance pay against the employer in any of the processes discussed below.

    Question 2: Am I an Employee, a Contractor, or a Dependent Contractor?

    If you are not a unionized employee, the second question to ask yourself is: am I a true employee, a contractor, or a mix of these types of workers, someone called a dependent contractor?  This is important because only an employee and a dependent contractor are entitled to severance.  A true contractor has no entitlement to notice of their termination outside of what is stated in their contract, if anything.  An employee or a dependent contractor on the other hand, who are people defined by several different criteria but both of whom rely primarily on a single employer for work and tend to be under a greater degree of employer control than independent contractors, are entitled to reasonable notice of termination, if their contract is silent on this issue.

    Question 3: Was I Fired for Just Cause?

    Regardless of whether you are an employee, a contractor or a dependent contractor, if you are fired for cause you are not entitled to severance pay (unless a written contract says otherwise, which would be very unusual). The law says that a mariner can only be fired for just cause if their conduct fundamentally undermined the employment relationship.  The threshold for just cause is high.  Significant dishonesty, theft, and gross negligence are examples of such behavior.  Mere mistakes, irregular lateness, minor insubordination, and so on can only be just cause for termination if the employer provides written warnings in advance that such behavior will result in termination.  The employer bears the burden of proving they had just cause to fire an employee.

    Question 4: Are my rights limited by an employment contract?

    An employee and a dependent contractor can have their rights to reasonable notice of termination limited by terms of a written employment contract.  Such written agreements are relatively rare in the marine industries.  Unless the court finds the employer has conducted themselves in such an egregious way as to dis-entitle them from relying on the written agreement, terms in the contract that restrict the employee from claiming severance beyond the minimum discussed below are unenforceable and the mariner cannot claim more than what they provide.

    Question 5: If there is no contract, or it is not enforceable, what law governs?

    Where there is no employment contract, or it is not enforceable because of the employer’s action, then the employee may be entitled to severance. Entitlement to severance comes from two possible sources: (1) legislation such as the B.C. Employment Standards Act (ESA) (provincial law), and Canada Labour Code (CLC) (federal law), or (2) judge-made law, called common law.

    The vast majority of marine jobs on the West Coast will be subject to the provisions of the B.C. Employment Standards Act (as opposed to the Canada Labour Code), regardless of the jobs involving navigation and shipping, because the work is related to local voyages as opposed to international or inter-provincial voyages.  This distinction is somewhat academic because the protections offered to employees under both the B.C. Employment Standards Act and the Canada Labour Code are largely similar.  Importantly, however, these laws only provide for a minimum severance entitlement, which is roughly equivalent to 1 week for every year of service up to a maximum of 8 weeks. Common law on the other can award one month per year of service depending on the factors discussed below.

    Question 6: Should I choose Employment Standards/Labour Code or a Judge?

    Awards for severance are typically much higher (often by a factor of 2 to 4 times) for long-term employees who seek a severance award in the courts under common law or judge-made law, as opposed to applying to agencies that administer the Employment Standards Act or Labour Code.  This is because judges are not limited by the maximums set by the ESA and CLC when making their awards, although they are limited to what other judges have awarded to terminated employees in similar circumstances.  The high-water mark for severance awarded by a judge is about 24 to 26 months of pay in lieu of notice.  A judge awards severance based on factors that relate to how difficult it will be for the employee to replace their position and income, such as: age, seniority, education, years of service, and the labour market.

    People are often attracted to pursuing their severance claims under the simplified processes provided for by the ESA or CLC, but they often give up significant rewards by not pursuing their claims in front of a judge.  While some employees are concerned about the costs of hiring legal counsel to pursue their claims in front of a judge, employees should know that many lawyers pursue such claims on a contingency basis (no cure, no fee basis, like a ship’s salvage).

    Question 7: The employer will not or cannot pay my severance, now what?

    Mariners hold a uniquely powerful position in their claims for severance because severance claims give rise to a maritime lien.  A maritime lien is a special legal right that allows the mariners to claim a priority for his severance pay over other debts that the employer owes in respect of the vessel.  In other words, mariners owed severance pay can sue the employer and the vessel, arrest the vessel, require the owner to post bail (money) in the amount of the mariner’s severance claim before the vessel can be released from arrest, and where there are multiple creditors pursuing the employer, the maritime lien entitles the mariner to be paid in priority to other creditors including prior mortgage holders. This is an unusual and powerful right that terminated employees in most other (non-marine) occupations do not have.  It must be used carefully but should not be overlooked.

    This article was originally published May 2015 in Western Mariner magazine.  Darren Williams is principal lawyer with League and Williams in Victoria B.C. and can be reached for question or comment locally 250-888-0002, or at info@leaguelaw.com.

  • Does the Employer have Just Cause to Terminate?

    Does the Employer have Just Cause to Terminate?

    Having just cause allows the employer to terminate the employee immediately without giving the employee working notice or severance pay. It is, when terminating an employee, what most employers look to establish because it is the quickest and presumably the cheapest way to rid themselves of a bad employee. However, employers are often mistaken about whether an event or a series of events (such as insubordination, poor performance, lateness, dishonesty) amount to just cause, and many expensive lawsuits arise because an employee, and ultimately a judge, disagrees that the employer had just cause to terminate.

    There is no universal definition of just cause, but it exists where there is a fundamental breach in the employment relationship, and it entitles the employer to terminate the employee without having to give reasonable working notice or pay in lieu of the working notice. A fundamental breach of an employment relationship is conduct that destroys the root of the employment relationship, frustrating or destroying the purpose of the employment agreement (BC Court of Appeal: Carr v. Fama Holdings Ltd. 1989). Just cause can only be determined on a case by case basis.

    What is important to understand about just cause is that it may or may not arise from one event. Singular events, such as theft of significant employer property, workplace violence, substance abuse or harassment can amount to just cause and allow for immediate dismissal without severance. More commonly, however, an employer will want to establish just cause, but only has a series of less significant events to rely on for their reason to terminate. For example, the employee may be repeatedly late by 10 minutes, regularly disrespectful or lazy at the workplace, or continually making the same mistake despite correction. It is these more common cases where it is important to follow particular steps to record the undesirable behavior, assist the employee in correcting the behavior, warn of specific consequences and carry out the actual termination in a respectful manner in order to avoid being successfully sued for wrongful dismissal damages.

    If you have a question about this topic or another legal issue, contact us for a legal consultation.  Reach us at 250-888-0002, or via email at info@leaguelaw.com.