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Practical Strategies for Hiring and Firing

Paul Pulver

Mistake in firing cost employer $325,000.00

A recent Employment Standards Tribunal case illustrates the need for employers to be precise about the consequences of the employees’ termination of employment.

Nanaimo Seniors Village provided care services to its clients through a contractor, Well-Being Senior Services Ltd.  When Nanaimo decided to replace Well-Being, the contractor gave notice to its employees that their employment would end.  Well-Being also indicated that it hoped the new contractor, CareSource Solutions Inc., would retain the services of as many employees as possible, but that the decision belonged to CareSource.

The new contractor hired 103 of Well-Being’s 112 employees.  The terms of employment between CareSource and the rehired employees were essentially the same as the terms they enjoyed with Well-Being.  Both Nanaimo and Well-Being believed there had been a seamless transition between employment relationships.  Indeed, the employees did not miss a shift.

However, the employees argued that they were still entitled to pay for group termination under the Employment Standards Act.  Group termination pay, unlike individual termination pay, applies whether or not the employee has found other employment. 

Nanaimo and Well-Being argued that the employees had not been terminated because the employees’ employment was continuous with CareSource, under section 97 of the Act.  Section 97 states that where a sale of a business (or part of it) occurs, the employment of an employee of the business is deemed to be continuous. 

The Employment Standards Tribunal disagreed.  It found that Well-Being had clearly terminated the employees’ employment and that they had no clear assurance of continued employment with CareSource.  As Well-Being terminated their employment before the contract was taken over by CareSource, section 97 was not applicable and the employees’ employment was not deemed continuous.

This decision again makes clear the need for employers to be very cautious when effecting the termination of employees, especially large groups of employees, if they want to avoid unexpected termination costs.

Paul Pulver is leading a workshop on Practical Strategies for Hiring and Firing on Wednesday, May 23 in Vancouver. For more information, please visit the BC HRMA online calendar.

About the Author:

Paul M. Pulver, is a lawyer with Coutts Pulver LLP, Labour and Employment Lawyers. Paul acts for a wide variety of employers and employees in the private and public sectors. He has appeared as counsel before various courts and administrative tribunals, including the British Columbia Supreme Court, the British Columbia Court of Appeal, the Federal Trial Court and Court of Appeal, the B.C. Labour Relations Board, the Canada Industrial Relations Board, the B.C. Employment Standards Tribunal, the B.C. Human Rights Tribunal, and arbitration boards.

Paul has written several articles on labour relations and employment law matters and is a regular speaker on those subjects at Continuing Legal Education, BC HRMA and other seminars.

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