Termination must be clear to warrant damages

Bruce was a lumber salesperson for an established business when he received an offer to be the sales manager at a new lumberyard startup. It was twice the salary and Bruce took the job.

A few months after he started, however, two members of the management team went on leave or left and the owner started getting involved in the day-to-day business. Things started going badly. The owner kept talking about winding down or restructuring the business, but Bruce was never sure which. Seven months after he started the job, he wrote an email to the owner that said, in part, “It seems to me you are deliberately trying to sabotage my reputation with my customers and causing me unneeded stress by your actions. You are forcing me into a different role, you have no product to service my customers, you are not opening accounts, you are not allowing us to quote, everything has to be on a cash sale (which doesn’t work in this industry), you have told me you are closing the business, you have emptied out the back of the yard and I am told by colleagues that it is rented out for truck parking.”

Bruce’s boss wasn’t happy either. Customers were not paying their accounts on time, Bruce was not returning calls to customers, administration was not being completed promptly, Bruce was not attracting new clients and was generally unwilling to take direction.

There was a series of meetings and emails. One from the boss stated, “We have provided enough warning to follow the terms of your employment agreement. You have continued to refuse to do so. As such please consider this as our 30 days written notice to terminate our employment services agreement.” What the boss was referring to was the clause in a contract that stated that the company could terminate employment if there was any failure by Bruce to perform or observe any of the provisions of the agreement where such failure is not cured within 30 days of written notification to the employee.

Bruce took this letter as a termination. The next day, however, he received an email complaining about his handling of certain responsibilities and asking him to correct his performance.

Bruce was confused because he thought he was terminated the day before.

Instead of clarifying the situation with his boss, Bruce had a lawyer send a letter asserting that Bruce had been terminated.

The company’s lawyer wrote back and said there had been no intention to terminate Bruce and that the company was simply giving him the 30 days to cure the deficiencies in his performance. Bruce kept working for the next 30 days and then stopped and sued for the alleged termination.

In the court decision, the judge noted that the test as to whether an employee has been dismissed is an objective one. There must be a clear and unequivocal act by the employer that amounts to a dismissal. Although the letter indicating that it was 30 days written notice to terminate, the judge found that it had to be read within the context of all the communications and circumstances. The 30-day provision in the contract clearly refers to a period in which the employee can improve their performance and avoid termination. By continuing to communicate about performance issues with Bruce after the letter above, the employer was confirming that there was an ongoing relationship. There was a letter from a lawyer confirming that an actual termination had not occurred.

Clearly, Bruce was angry and wanted out. He thought he had a way to get paid out on his fixed-term contract because of the confusing wording used by the employer in its letter. The judge, however, was not prepared to ignore everything that happened before and after that letter. Bruce paid his lawyer, some of the employer’s legal costs and wasted his time. It has been my experience that some people become so angry and annoyed, whether they are the employer or employee, that they cannot imagine a judge seeing things other than their way. They are so aggrieved they are not objective. Usually that irrationality lasts for a few months but not all the way to trial. Unfortunately for Bruce, he held onto it too long.

This article was originally published by The Hamilton Spectator.