An award-winning pharmaceutical sales representative, who had her hours slashed during the pandemic, has won her claim for constructive dismissal.
Interestingly, the court in this case — small claims court in Ontario — looked at the province’s Infectious Disease Emergency Leave (IDEL) regulation that changed the rules for constructive dismissal during COVID-19. But since her dismissal happened two weeks before it came into effect, it didn’t apply.
Background
Colleen Wilkinson began working for Vivier Pharma on July 3, 2017, as a business development manager. She did not have managerial responsibilities.
In 2018, she earned a total of $136,945.80 inclusive of base salary and variable compensation, including commission. In 2019, she earned $182,389 and won the Business Development Manager of the Year award.
As of March 24, 2020, she had earned an annual base salary of $89,466, and participated in the employer’s health and dental benefits and received matching RRSP contributions.
Company slashes work schedule, suspends pension contributions
On March 25, 2020, Vivier Pharma said it was proceeding with a temporary work schedule of two days per week due to the pandemic.
Vivier estimated, at trial, that its sales plunged about 70 per cent as a result of the COVID shutdowns in March 2020. The owner said the company was in “survival mode.”
It told Wilkinson her base salary for two days would be $688.20 per week. Her benefits would continue, but the company’s matching pension contributions were being suspended.
On April 21, 2020, Vivier told her it was moving to three days per week and her base salary would rise to $1,032.30.
On May 14, 2020, Wilkinson was put on a temporary layoff due to the pandemic, effective May 18, for an unknown period. Her health and dental benefits would continue during the layoff period.
New job offer
On June 15, 2020, a new employer offered Wilkinson a temporary contract position as a skin health sales representative. It was to run from June 22, 2020, until Sept. 10, 2021. The annual base salary was $70,000, plus retention pay and variable compensation for sales.
Wilkinson accepted the new job on June 17, 2020, and resigned from Vivier Pharma on June 26, 2020. At that time, she was 39 and had completed three years’ service with Vivier.
In the six months following her start at the new company, Wilkinson earned a total of $50,476.10.
Constructive dismissal
Wilkinson sought damages for constructive dismissal from Vivier.
While the court said it was “not without sympathy to the position” of the company, the law is clear.
“Any change to an employee’s terms of employment must either have the consent of the employee concerned or be on reasonable notice to the employee,” it said. “Without such notice, an employer is not permitted to act unilaterally (no) matter how dire or immediate the circumstances.”
It ruled Wilkinson was constructively dismissed when she received a letter from Vivier on May 14, 2020. The effective date of the termination was May 18, 2020.
IDEL regulations
The court did examine whether the Government of Ontario’s IDEL (Infectious Disease Emergency Leave) regulation altered its ruling that she had been constructively dismissed.
Section 7 of the IDEL regulation reads as follows:
(1) The following does not constitute constructive dismissal if it occurred during the COVID-19 period:
- A temporary reduction or elimination of an employee’s hours of work by the employer for reasons related to the designated infectious disease.
- A temporary reduction in an employee’s wages by the employer for reasons related to the designated infectious disease.
(2) Subsection (1) does not apply to an employee whose employment was terminated under clause 56 (1) (b) of the Act … before May 29, 2020.
The court said IDEL did not apply in this case because the dismissal took place on May 14, 2020, which was before the May 29, 2020, date it specified.
Notice period
The court settled on using one month per year of service to calculate her damages, totaling three months (which the court calculated as 13 weeks.)
While she quickly found another job, it paid less, the court said. Therefore, Vivier was responsible for making up the difference in earnings during the notice period.
Sales at Vivier were down 15 per cent in 2020 compared to 2019, so the court used that number in assuming Wilkinson’s incentive compensation would have declined by the same amount.
In total, the court awarded $12,344.96 in damages. The reasons were as follows:
- Wilkinson agreed to forego any compensation before June 29, 2020 (six weeks’ notice for which she would not be compensated)
- The balance of the 13-week notice period (7 weeks) she was entitled to receive damages relating to her incentive compensation of $10,850 ($1,550 per week) and base salary of $11,907. In addition, she was entitled to RRSP contributions of $357.20 at three per cent. The total was $23,114.20.
- During that seven week period, she earned $10,769.24 – which the court deducted from the $23,114.20.
For more information, see Wilkinson v Pharma, 2022 CanLII 120475 (ON SCSM)
