Most labour and employment lawyers and human resources practitioners made a point of seeing the film “Up in the Air” starring George Clooney who, in his job at Career Transitions Corporation, traveled about the United States firing people. His position nearly became redundant due to the arrival of Ms. Keener at Career Transitions, who promoted a plan to cut costs by conducting terminations via videoconferencing. If you didn’t see the movie, click here for a teaser.
We know that videoconferencing or Skype can be a useful tool for interviewing potential employees who live or work far enough away for an in-person interview to be impractical. But what about terminating an employee, airing a workplace grievance, or discussing performance over Skype?
Inevitably, emotions run high when talking performance. A recent decision from British Columbia, Oliver v. Sure Grip Controls Inc., 2014 BCSC 321, is an example of a workplace issue being discussed that led to a contest in the courts over whether the employee was fired or whether he quit:
- The plaintiff, Ronald James Oliver, seeks damages for the alleged wrongful dismissal from his employment with the defendant, Sure Grip Controls Inc. (‘Sure Grip’).
- Sure Grip, as represented by its shareholders, president, Brent Kornelson, and the secretary, Cynthia Kornelson, allege that the plaintiff quit his job with Sure Grip.
A written contract of employment was entered into with the employee on January 15, 2002 for employment in Kamloops. By 2005, the employee had received a new job description as “marketing manager” changing his responsibilities and remuneration including participation in company profit sharing. In January 2006, the President and Secretary moved from Kamloops to Victoria, delegating almost full responsibility for the Kamloops operation to the management team, including the marketing manager. After this, two things happened that played a large part in fueling what happened next. The employer implemented a Handbook and a Productivity Plan.
- Profit Sharing
Eligibility: typically based on personal performance and company profitability, at the discretion of the owners.
The Handbook set out two categories of termination: Quit (Resignation) and Dismissed. Under Dismissed, the employer could pay up to one week’s pay for each full year of employment.
Under this 2010 plan, each month that an employee met or exceeded a specific target, he or she would “receive a productivity bonus equal to one percent of their wages during the program”. If the average production rate over the period of employment met or equaled a certain number, final bonuses would be 10% of the employee’s wage. This plan said “All active employees are eligible”.
In October, 2010, the plaintiff went on a medical leave for surgery and remained on that leave until February 2011. When he returned, there were no profit sharing proceeds waiting for him. When he questioned this, he was told he would not be getting one because he “was not an employee at the time the profits were given out”. The employee continued to have questions as to why he was disqualified from the profit sharing proceeds and eventually, there were two Skype facilitated meetings to discuss the issue.
The Skype Meetings
On March 9, 2011, the employee and the employer connected via Skype. The employer stuck to its position that the employee was not entitled to a bonus because he was not an employee at the time the bonuses were paid. The employee argued this was unfair, raising that he had helped build sales of $50,000 to $500,000 per month over the years. The employer suggested they all sleep on it and talk again the next day. At the end of this conversation, the employee told the employer that he wanted to retire when he was 60 (he was 53 at the time).
On March 10, 2011, the parties again Skyped. The employee was told again that he would not get the bonus as he was on medical leave and was not an employee at the time. There was much dispute over what else was said at this meeting. Although the employer claimed that it was during this Skype session that the employee said he was quitting, it admitted in Discovery that the employee did not say he was quitting.
What happened next?
The employee received two Record of Employment forms (one for holiday pay and the other severance), both saying he had been dismissed. What happened next was that the dismissed employee became a plaintiff in a wrongful dismissal suit and the employer became the defendant.
What did the court say?
The court found that the defendant had terminated the plaintiff saying:
- It may be that the plaintiff expressed unhappiness working for Sure Grip; however, the contentious item for the plaintiff was the failure of Sure Grip to pay money that the plaintiff thought was due to him under the Productivity Exercise Plan 2010. The plaintiff made it clear in the first meeting of his intention to retire at age 60 from Sure Grip.
- In the first and second Skype meeting, there is no dispute about the topics that were discussed. Mr. Kornelson does not deny that he stated he was letting the plaintiff go and that he said ’Wow, that went a lot better than I thought it was going to go’. This relates to the plaintiff’s firing by Mr. Kornelson. Mr. Kornelson tells the plaintiff that he will put together a package for him.
- Upon telling the plaintiff that he was being let go, Mr. Kornelson asked the plaintiff to work for Sure Grip for a couple of weeks. The plaintiff’s response was consistent with someone having been fired. Had Mr. Kornelson not fired the plaintiff, he would have said so after the plaintiff said ‘You just fired me, I am going to pack up my office and I am going home’. Mr. Kornelson said nothing in response to this comment and he has not explained why he did not.
- Subsequently, the ROEs state that the plaintiff was dismissed.
- Mr. Kornelsons’ words, the plaintiff’s reaction and response to those words, objectively viewed, cause me to conclude that the plaintiff’s employment with Sure Grip was terminated. I conclude the plaintiff has met the evidentiary burden.
- Mr. Kornelsons’ reasons for giving the plaintiff a severance package are flimsy. They state that they liked the plaintiff, he was a good employee and friend, and they wanted to make sure that he would receive unemployment insurance.
But the matter didn’t end here. The defendant claimed that it was limited to payment of one week per year of service under the Handbook as set out above. The court found against the defendant again on this issue saying that the Handbook Statement (although signed by the plaintiff) made it clear that the Handbook was “not a contract of employment and should not be deemed as such”. As such, the court concluded that the plaintiff was entitled to the common law principles of reasonable notice.
The plaintiff had been employed for a little over 9 years, was 53 years old when terminated, supervised at various times anywhere from one to three employees and was able to obtain employment after his termination. Due to these factors, the court awarded 12 months’ notice less earnings from his new employment.
What this means to you
As a general rule and as a best practice, don’t use videoconferencing to terminate an employee. Leave discussions that can be emotional, passionate or misunderstood for in-person meetings. To not do so will leave the door open to unanswered questions, misunderstandings and the possibility of an acrimonious lawsuit as occurred in the Oliver v. Sure Grip Controls matter.
The second issue flowing from this decision serves as a reminder that, if you want to rely on a term or condition to limit notice at the time of termination, the best place to say this is in the employment contract not in a subsequently distributed policy or handbook. If you don’t follow this general rule, you should expect even more fuel for an acrimonious lawsuit.