ABC Insurance Solutions wrongfully dismissed one of its former customer service managers, the Supreme Court of British Columbia has ruled. It awarded her four and a half months’ pay in lieu of notice — noting that the termination clause in the employment contract was ambiguous and unenforceable, highlighting critical considerations for employers drafting termination provisions.
L.B., 36, was employed by ABC Insurance Solutions from Nov. 15, 2021, until her termination on July 9, 2023. The company alleged that L.B. repudiated her employment contract by refusing to work from the office and claimed after-acquired cause for dismissal based on misconduct discovered post-termination. Justice Blok dismissed these arguments, stating that L.B. did not repudiate her contract and that the employer’s allegations lacked admissible evidence.
Termination clause deemed ambiguous
The employment contract included a termination clause stating: “The Employee and the Employer agree that reasonable and sufficient notice of termination by the Employer is the greater of two (2) weeks or any minimum notice required by law.”
L.B. argued that this clause was unenforceable due to its ambiguity, particularly the phrase “any minimum notice required by law.” The court agreed, referencing the decision in Kaiser v. Dural, where a similar clause was found unenforceable. The court noted, “The clause does not even acknowledge there is a minimum at all.”
It further explained, “There is nothing in the factual matrix of the case, nor any extrinsic evidence, that provided any aid to interpretation. The clause in question provides for ‘any minimum notice required by law,’ not the minimum notice, and not necessarily the notice required by statute law, just ‘by law,’ which could well include common law.”
As a result, the court found the termination clause ambiguous and unenforceable, entitling L.B. to reasonable notice at common law.
No repudiation of employment contract
The employer contended that L.B.’s emails on July 3 and 5, 2023, amounted to a refusal to work from the office, constituting repudiation of the employment contract. In her emails, L.B. expressed financial hardship due to commuting costs and requested a response regarding a previously discussed commuter allowance. She stated, “I am finding it financially impossible to continue coming into the office without the allowance that we discussed in my yearly review.”
Justice Blok concluded that L.B.’s emails were not an ultimatum or refusal to work but a plea for communication and resolution. “I do not view the July emails as an ultimatum but rather as a demand for clarity and, at most, an expression of frustration with the poor communication between the parties,” he said.
The court emphasized that at the time of the emails, working from home was not prohibited by the employer, and the full-time return to the office was scheduled for September 2023. Therefore, L.B.’s willingness to work from home did not breach any fundamental terms of her employment.
After-acquired cause allegations dismissed
ABC Insurance Solutions also alleged after-acquired cause for dismissal based on misconduct discovered after L.B.’s termination. These allegations included running a personal business during work hours, sharing confidential information, and engaging in unprofessional communications.
The court found these allegations inadmissible and lacking evidence. Justice B. noted procedural issues, including the employer’s failure to provide particulars and the late submission of affidavits, which deprived L.B. of a fair opportunity to respond.
“Some of the allegations seem extremely weak… while others lack enough context to make any judgment about the seriousness of the conduct in question,” he stated. The court concluded that the defence of after-acquired cause failed due to insufficient evidence.
Assessment of reasonable notice and damages
Considering factors such as age, length of service, and position, the court assessed reasonable notice at four and a half months. L.B. was 36 years old, held a customer service manager role without supervisory duties, and had approximately 20 months of service.
On the issue of mitigation, the employer argued that L.B. failed to seek new employment actively. The court rejected this claim, stating that the employer did not meet the burden of proof. “The defendant’s proof consisted of photocopies of entries from the Indeed website. This falls short of meeting the burden of proof,” Justice Blok said.
For more information, see Briggs v ABC Insurance Solutions Inc., 2024 BCSC 1918 (CanLII).
