Employees revoked their resignations to cash in on severance packages from mill closing
A British Columbia employer wrongfully dismissed nine mill employees who submitted their resignations but changed their minds when the employer announced severance packages for when it closed down the mill, the B.C. Labour Relations Board has ruled.
The nine employees worked for Eurocan Pulp and Paper Company in Kitimat, B.C. In 2009, they all decided to resign from the mill and apply for Transition Assistance Program (TAP) funding. TAP was a provincial program that provided financial assistance of up to $35,000 for forestry workers if they chose to resign or retire from their current job and not return to work for the same employer or an affiliate for 18 months. To be eligible for TAP, applicants had to resign or retire by Oct. 31, 2009.
The employees applied for early retirement pension benefits and signed declarations they intended to terminate their employment in the pulp and paper industry by Oct. 31. They also spoke to Eurocan’s HR department, which told them they could change their minds about retiring up until they cashed their first pension cheque.
On Oct. 28, 2009, Eurocan announced it would be permanently closing the mill in February 2010. Under the collective agreement, employees would receive a specified amount of severance pay according to their service. Under the agreement, each of the nine employees planning to resign would receive amounts ranging from $46,764.52 to $101,172.
The employees told Eurocan they changed their minds about their retirement and wanted to work until the plant closed. However, Eurocan refused to let them withdraw their resignations, saying a notice of resignation couldn’t be revoked without its consent.
The employees filed a grievance, claiming they were free to change their minds up to their agreed-upon retirement date.
An arbitrator found the employees were entitled to change their minds before their retirement date arrived as the employment relationship was not yet severed. Since they were still employees when they retracted their resignations, they were still under the collective agreement and entitled to only be dismissed with just cause, said the arbitrator.
“Where a notice of intent to resign on a future date is delivered, there is obviously intent to sever the employment relationship,” said the arbitrator. “But the authorities are unanimous that pure intent is not enough to sever the relationship. There must be something more, often found in subsequent conduct which establishes that the intent has been brought to fruition and the severance has occurred.”
Eurocan appealed to the B.C. Labour Relations Board, but the board agreed with the arbitrator, finding the nine employees “had not fulfilled the objective requirement to effect their resignations.”
The board found the employees had been told they could withdraw their resignations until they cashed their first pension cheque, their date of resignation hadn’t passed yet and there was no contractual obligation to end their employment on Oct. 31. Without a reason that in doing so would be to Eurocan’s detriment, the board found the employees could change their minds on resigning.
“The expressed intention to resign on the fact of this case, was not sufficient to render the resignations effective,” said the board in dismissing Eurocan’s appeal.
For more information see:
•Eurocan Pulp & Paper Co. v. C.E.P., Locals 209 & 1127, 2010 CarswellBC 2215 (B.C. Lab. Rel. Bd.).
