You And the Law Articles

Fired Employee Wins Extra Severance for Boss' High-Handed Conduct

Just six weeks after returning from maternity leave, Radmilla Stolle was fired from her job as assistant spa manager at the luxurious Ocean Pointe Resort Hotel and Spa in Victoria. She had worked for the hotel for almost six years.

This was her third maternity and parental leave. With her first two leaves, she returned to her previous job or moved into a better position. But a week before going back to work after her third leave, she discovered that her role at the Spa had been dramatically altered.

"I was relegated to an extremely junior, ill defined role," she said. "My duties were simply that of preparing payroll... and some minor invoice management and inventory control."

Before going on leave, she ran the day-to-day Spa operations including reception, hair, aesthetics and massage departments; designed and set up multi-day, group and convention packages; and prepared budget and staffing reports.

A week after going back to work, Mrs. Stolle met with the hotel’s director of human resources and the spa manager, but was again told she wouldn’t be getting her old position back.

Six weeks later, Alex Lindquist, the hotel’s general manager, called her in to his office and told her that her job had been terminated. He gave her a cheque for wages owing to her up to that date.

He also offered her five weeks’ minimum severance pay as required by the Employment Standards Act (one week for each year worked) plus another seven weeks’ pay. But he refused to give her this severance cheque unless she signed a release protecting the hotel from any claim she may have against them under the Employment Standards Act or provincial Human Rights Code.

"[This] made me feel like I was being extorted and exploited," said Mrs. Stolle, who called the hotel’s actions "insulting and humiliating." She finally received her severance only after her lawyer contacted the hotel.

The general manager admitted he’d been hired to help streamline operations at the hotel and had let go several employees during the course of restructuring. But he denied any intention of eliminating Mrs. Stolle’s position while she was on maternity leave.

At trial, the judge decided that Mrs. Stolle had been fired without cause. She was therefore entitled to severance pay. He noted that while the Employment Standards Act sets the minimum severance an employer must pay, an employee may be entitled to more. He found that Mrs. Stolle should, in fact, have been given five months’ severance pay.

The judge also concluded that the hotel was guilty of "high handed conduct" by withholding her severance unless she signed a release. He relied on an earlier Supreme Court of Canada case that condemns employers who callously and insensitively dismiss employees, and he awarded Mrs. Stolle an additional three months’ pay, for a total of $22,400. "The additional notice period... properly deals with the insensitive manner which the defendant dealt with the plaintiff," said the judge.

High-handed or insensitive actions by an employer at the time of termination can result in extra "damages" or financial compensation. Note too that it’s improper to withhold payments to employees required under the Employment Standards Act. But it is permissible to pay out the amount required under the Act, but withhold any additional severance offer until the employee signs a release in relation to that payment.

This law column was written by Janice Mucalov, LL.B.,* with the assistance of PIHL & ASSOCIATES LAW CORPORATION. A version of this column was published in the Kelowna Daily Courier. The column provides information only and must not be relied on for legal advice. Please contact PIHL & ASSOCIATES LAW CORPORATION for legal advice concerning your particular case.

 

*Lawyer Janice Mucalov has authored several popular law books and writes about legal affairs for a variety of publications. "You and the Law" is a registered trade-mark. © by Janice Mucalov.