Determining Notice for Season Employees After the Purchase of a Business
October 17, 2022
Many Canadians work seasonal jobs where they are employed for some time and are then laid off or let go completely when the “season” ends. A work season can mean different things to different lines of work. Some jobs may only be needed during certain months or literal seasons, while others might run on their calendars. In other cases, such as the one we will be discussing today, an employee might be laid off from their main job but offered a different one during the off-season. Seasonal work might present challenges when discussing employment law issues, such as those related to termination. However, when these issues are presented alongside issues related to the sale of a business, entirely new wrinkles can appear.
In this article, we look at a decision from the Alberta Labour Relations Board in which an employer took the position that an employee was owed minimal notice since they had just purchased the business and the employee had recently been temporarily laid off.
Business is sold
The employee began to work with the previous employer in April 2017 and held the position of General Manager. At that time, the position was full-time and was held by the employer throughout the year. In addition to his salary, the employee was also provided with benefits and a vehicle.
The new employer (“the employer”) purchased the assets of the previous employer in July 2019. The employee kept his job following the sale, receiving the same compensation he had been receiving prior.
However, in December of that year, the employer advised the employee that he was being laid off so that the employer could do maintenance work on their fleet of trucks. The employer told the Board that he understood the layoff would last approximately one month. Under the previous employer, many workers would be laid off during winter. The employer’s business was in concrete production and was not winterized, meaning many employees were not needed during the winter. However, the employee involved in the matter was often kept on to do paperwork, provide quotes to potential customers, and provide directions to drivers picking up loads of concrete from other companies that operated during the winter.
Layoff lasts longer than anticipated
The employee’s layoff ended up being more than the anticipated one month. He was not called back into work until April 1, 2020. However, when he returned to work, he was advised that he was to train another employee in how to do the office work. The employer also gave the new employee the employee’s cell phone and laptop. The employee was told he would receive new ones, but they were never provided.
On June 23 of that year, the employer told the employee that he would no longer be employed as General Manager. Instead, he was asked to return to work as a driver. His income changed as well, moving from a salary of $120,000 per year to $30-$35 per hour. Just over one week later , the employee told the employer he was rejecting his offer to be demoted.
Was the employee terminated when the business was sold?
The board first asked whether the employee’s job was terminated when the business was sold to the employer. Alberta’s Employment Standards Code states,
“For the purposes of this Act, the employment of an employee is deemed to be continuous and uninterrupted when a business, undertaking or other activity or part of it is sold, leased, transferred or merged or if it continues to operate under a receiver or receiver-manager.”
In interpreting this, the Board found that since the previous owner did not terminate the employee and he continued to work with the employer doing the same work for the same pay, his employment was considered to be continuous.
The ESC also addresses termination notice for seasonal employees, stating termination notice is not required “if the employee is employed on a seasonal basis and on the completion of the season the employee’s employment is terminated.”
Looking back on the facts, the employee had always worked year-round, and his layoff from December 2019 to April 2020 was the first time he had experienced a layoff. In addition, the Board found that the employer had never informed the employee he was a seasonal employee.
What’s more, is that the employee’s change or responsibilities at the workplace did not coincide with his return from being laid off.
The employer told the Board that the employee had quit his job and had not been terminated. However, in recalling a 1997 Supreme Court of Canada decision that established our current meaning of constructive dismissal, the court found that an employee can be considered to have been terminated if,
“An employer unilaterally makes a fundamental or substantial change to an employee’s contract of employment – a change that violates the contract’s terms – the employer is committing a fundamental breach of the contract that results in its termination and entitles the employee to consider himself or herself constructively dismissed.
“To reach the conclusion that an employee has been constructively dismissed, the Court must therefore determine whether the unilateral changes imposed by the employer substantially altered the essential terms of the employee’s contract of employment. For this purpose, the judge must ask whether, at the time the offer was made, a reasonable person in the same situation as the employee would have felt that the essential terms of the employment contract were being substantially changed.”
The Board found that the requirements established by the Supreme Court of Canada had been met and that the employee was the victim of constructive dismissal, leaving him entitled to more than the statutory minimum notice period provided by the ESC.
Hmc Lawyers Can Help You With Matters Related To Constrictive Dismissal Or Wrongful Termination
At HMC Lawyers, our employment law lawyers regularly work with employees to draft employment contracts that accurately represent the intentions of the parties. We also work with employees to help them understand contracts and pursue damages in the event that a contract is breached. To make an appointment and get advice about an employment matter, including wrongful or constructive dismissal claims, call 1-800-480-3534 or contact us online. We represent clients in Calgary, throughout Alberta, and across Western Canada.