Mistaken termination, no wrongful dismissal

April 30, 2014 Adam Gorley Employee Relations, Employment/Labour Standards, HR Policies and Procedures, Human Resources, Notice, Damages and Settlements, Payroll, Pensions and Benefits, Wages and Compensation

Ten months after Imelda Roche went on medical leave, her employer sent her a termination letter, believing that she was better but choosing not to return to work. When the employer found out Roche was still not well, it rescinded the termination and restored her benefits. Roche wasn’t impressed, however, and sued for wrongful dismissal at the Supreme Court of Newfoundland and Labrador.

Facts of the case

In 2008, Roche had been working with Sameday Worldwide for 29 years, mainly as an outside sales representative. In 2006, the employer restructured its business and made significant changes to its pricing; some customers would pay up to 40 percent more for the same services they had previously received. Roche struggled under the new arrangement and couldn’t meet her sales targets.

By November 2008, the employer had decided that Roche was no longer suited to the position. Her manager, Rick Glawson, offered her a choice between two lesser-paying jobs, one in inside sales and the other in accounts receivable. They also discussed severance, but Glawson told Roche that he would have to get back to her with details. Soon after the meeting, Roche became anxious and depressed and took a medical leave, which eventually turned into a long-term disability leave, paid by the employer’s health benefits insurer.

Roche continued to pursue the details of a severance package, but Sameday told her that she would have to decide whether she wanted to take one of the available jobs before they could discuss severance. The employer has a policy against terminating or discussing severance with employees on medical leaves, as it doesn’t want to act inappropriately or take advantage of them.

In August 2009, the insurer notified Roche by letter that:

There is insufficient medical information on file to continue your long-term disability benefits. Rehabilitation assistance is not medically required; therefore your file will close August 31, 2009.

Sameday understood the letter to mean that Roche was ready to return to work and tried to contact her to let her know there was a position available. But the employer couldn’t get a hold of her because it had the wrong phone number in her personnel file. The employer finally sent a letter on September 24 telling Roche that if she didn’t get in contact by October 2, she would be terminated with cause. Before receiving this letter, Roche communicated with the employer that her doctor had not actually cleared her to return to work. Nonetheless, the employer believed that Roche was able to return to work and had failed to respond to its request, and therefore sent her a termination letter effective October 2.

Roche later appealed the insurer’s rejection of her long-term disability benefits, and they were eventually reinstated. The employer subsequently recognized its error, rescinded its termination and reinstated Roche’s health benefits. But it was too late for Roche. She felt the employer had treated her badly and sued for wrongful dismissal.

Decision

The trial judge was not persuaded that Sameday had acted incorrectly. He found that the termination was a mistake due to poor communication among the parties, and the employer had acted properly by revoking the termination and restoring Roche’s benefits. Indeed:

Through her actions in requesting and accepting the health benefits, and in accumulating pensionable time, [Roche] continued to behave as an employee of the defendant.

The court dismissed Roche’s claim.

Takeaways for employers

Interestingly for employers, Sameday attempted to argue that Roche had repudiated her contract by pursuing the wrongful dismissal case. But the court didn’t accept this argument. To repudiate her contract, Roche would have had to reject the benefits associated with her employment.

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Adam Gorley

Editor at First Reference Inc.

Adam Gorley is a copywriter, editor and researcher at First Reference. He contributes regularly to First Reference Talks, Inside Internal Controls and other First Reference publications. He writes about general HR issues, accessibility, privacy, technology in the workplace, accommodation, violence and harassment, internal controls and more. Read more

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employment law, health benefits, long-term disability leave, medical leave, mistaken termination, Newfoundland and Labrador, poor communication, repudiation of contract, restoring benefits, restructuring, Return to work, revoking termination, severance, terminating employee on medical leave, termination, termination with cause, workplace communication, wrongful dismissal

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