'They needed to take a step back and look at the whole circumstances leading up to the situation,' says lawyer offering tips for HR
A worker was wrongfully dismissed when her employer took the position that she repudiated her employment following a dispute over remote work, the British Columbia Supreme Court has ruled.
The 37-year-old worker was hired in November 2021 by ABC Insurance Solutions, an insurance brokerage in Langley, BC, providing benefit and administration programs for small- and medium-sized employers, as a customer service manager.
The worker signed a written employment agreement on Oct. 18 that included a termination clause stating that “reasonable and sufficient notice of termination by the employer is the greater of two weeks or any minimum notice required by law.” According to the worker, ABC told her that the customer service manager position was a hybrid role in which she worked at home as well as in the office. At the time, ABC had a work-from-home policy for most employees, as the pandemic was ongoing.
The hybrid work element was important to the worker, as she lived in Mission, BC, about 40 km and close to a one-hour drive from ABC’s office in Langley. Driving to the office cost her about $1,200 per month.
The worker had an employee review with her manager on March 17, 2023, in which they discussed a raise. The worker said that she could perform all of her work functions at home, but her manager said he wanted her in the office and suggested a travel allowance. According to the worker, he said that a raise and a travel allowance would be in place on April 1.
The manager agreed to the raise, but denied committing to the travel allowance, saying that he asked the worker to track her kilometrage to assess if such an allowance was feasible.
Remote work policy ended
The same day, ABC notified all employees that the work-from-home policy was ending and all employees were expected to return to the office full-time by September.
For the next four months, the worker commuted to the office four days a week, keeping track of her kilometrage and noting it on her time sheets, and she worked from home on Wednesdays. She didn’t receive a travel allowance, so she followed up with her manager with three emails between April and July, but he didn’t respond. She raised it in a meeting and the manager said it was “in his pile of things to do.”
The manager claimed that told the worker sometime in June that a business decision had been made to decline giving her a commuter allowance.
On July 3, the worker sent an email to her manager stating that her queries about the travel allowance had not been responded to and it was “financially impossible to continue coming into the office without the allowance.” She argued that she was the only person other than the manager who was consistently in the office and she could perform all of her job duties at home.
The email concluded with the worker saying she was “incapable of coming into the office tomorrow due to these factors” and she hoped that the manager would “continue to discuss this very dire situation with me so that I can continue to provide the service and support that our clients rely on and that I pride myself on bringing to your company.”
Two days later, the worker sent a second email reiterating that she was unable to work from the office and would continue to work from home “to the same high standard as I have been able to provide in the office.”
On July 6, the worker provided a letter from her doctor because she was having difficulty attending her physical rehabilitation appointment because of her increasing commute and she added that ABC’s lack of communication was affecting her mental health, but the company didn’t respond.
Termination of employment
The worker’s manager emailed her on July 9 with the message that she was “no longer employed with ABC” and he had made the decision after her July 3 email saying that she was incapable of commuting to the office without the travel allowance.
ABC paid the worker $4,550 in severance pay and issued a record of employment with “dismissed for cause” as the reason.
The worker sued for wrongful dismissal, arguing that she was owed more severance pay than she received and the termination clause was unenforceable due to ambiguity. ABC countered that the worker repudiated her employment contract by refusing to abide by a direction to work in the company office, which the company accepted.
The court noted that repudiation involves an employee refusing to perform an essential condition of the employment contract. The worker’s July 3 emails outlined her concerns regarding a commuting allowance but emphasized her continued commitment to fulfilling her duties, the court said, finding that they weren’t a refusal to work or an ultimatum and didn’t support ABC’s claim of repudiation. In addition, the worker was demanding clarity while “clearly and unequivocally” saying that she would continue working, said the court.
“The employee was actually respectful, and the court didn't think that the way [ABC] read the email in terms of being an ultimatum was appropriate,” says Melanie Samuels, chair of the Employment and Labour group at Singleton Reynolds in Vancouver. “Courts, especially in BC, are always going to err on the side of employees, so taking the position of repudiation with communication like that, I don't think is probably ever going to be upheld unless the employee is really direct and aggressive.”
Clear communication
“An employer has to take a step back and have a little perspective before making a decision to terminate like that - it behooved ABC to make further inquiries and get it sorted out,” adds Samuels. “It's all about communication – if the obligation to report to work full-time in the office is crystal clear and the worker doesn’t do it, then it could be grounds for termination, but it was a little murkier [with the worker] seeking clarification.”
The court also found that, at the time, ABC didn’t prohibit working from home, as its deadline for employees to return to the office full-time was September. The worker’s employment ended in early July, so working from home wasn’t directly incompatible with the fundamental terms of her employment at the time, the court said.
The court also agreed with the worker that the termination clause in her contract was ambiguous, setting the notice period at “the greater of two weeks or any minimum notice required by law.” Using the word “any” instead of “the” lacked reference to specific legislation and the general phrase “by law” could include common law, the court said, adding that the clause didn’t acknowledge whether there was a minimum at all.
The court cited precedent cases indicating that ambiguous termination clauses are unenforceable, entitling the worker to reasonable notice under common law.
“When you say, ‘by law,’ that's way too vague, that could mean anything - most of time those clauses are related to employment standards legislation where there's a formula and you know exactly what the legislation provides,” says Samuels. “Courts are more inclined to overturn contracts, so they've got to be more carefully drafted, and a lot more language around those clauses has to now be in place for them to be enforceable.”
Reasonable notice
Based on the worker’s age, job role, and 20 months of service, the court determined that 4.5 months’ notice was appropriate.
ABC argued that the worker had failed to mitigate her damages by not actively seeking other employment, but the court found that the company didn’t meet the burden of proof by providing any evidence on the availability of comparable job opportunities.
ABC was ordered to pay the worker 4.5 months’ pay in lieu of notice, with final calculations of outstanding salary and vacation pay to be determined.
It’s a caution for employers to avoid making a rash decision if there’s a question of whether an employee is refusing to report to work or not, according to Samuels.
“In a vacuum, [ABC] was taking the position that the worker refused to come back to the office, but they needed to take a step back and look at the whole circumstances leading up to the situation,” she says. “Make sure that the rules are crystal clear, how they're going to be enforced, give the person notice what's going to happen if they don't follow them, and when the employee responds, get back to them - ignoring an employee could be bad faith.”
