- The case is here: Pisko v. Trican Well Service Ltd., 2016 ABQB 500
- Plaintiff worked for Defendant for more than 11 years
- Entered into “most recent employment contract” on February 26, 2014
- The work for Trican was performed in Saudi Arabia
- Pursuant to the Agreement:
- Employee entitled to base salary plus a “Rotational Assignment Allowance” of 25% of base salary for working in Saudi Arabia
- Employee was entitled to (i) working notice of 60 days; (ii) pay in lieu of working notice equal to 60 days of base salary (excluding RAA); or (iii) a combination of working notice and pay in lieu of notice equivalent to 60 days of pay (excluding RAA)
- offending terms could be severed from the contract
- Employee was terminated and paid 60 days of base salary PLUS the equivalent RAA (despite the exclusion found in the agreement)
- Employee sued, arguing that the termination provisions in the Agreement were unenforceable because they fell below the requirements set out in the Employment Standards Code
- The Employer applied for summary dismissal, arguing (1) that the RAA did not constitute wages and, therefore, the termination provisions did not fall below the ESC standards (2) if the RAA did constitute wages, the termination provisions could be saved by the severance clause
- The Master found that the RAA did constitute “wages” as defined in the ESC and that a failure to pay the RAA would fall below the ESC standards. However, using some mental gymnastics, he found that the notice period requirement of the Agreement (60 days notice) was a separate issue from the methodology for calculating “wages” and, accordingly, was valid and enforceable.
- As the Employer paid the Employee the equivalent “wages” he would have received had he been given 60 days working notice, the Master granted summary dismissal of the Employee’s action
This is a strange decision.
Something that is not addressed in the decision is whether the Employee was given some consideration in exchange for entering into a new agreement many years into his employment. If he didn’t receive consideration, it could have been argued that the Agreement in question was not enforceable.
I don’t agree with the Master’s choice in enforcing the 60 day notice period but ignoring the Agreement’s exclusion of the RAA as a part of calculating termination pay. This is exactly what the SCC in Machtinger wanted to avoid: a situation where an employer can “get away” with having a clause which requires less than is required by the Code. For example, using the Master’s logic, an employer could draft a contract agreeing to pay an employee minimum wage plus Bonus X for services performed AND provide for the ability to terminate upon paying the equivalent of X days of notice (calculated using only the minimum wage base salary). In such a situation, I suspect many employers would attempt simply to pay the minimum wage salary multiplied by the X days of notice. If confronted about this (ie the employee incurs the expense of legal advice), the employer could just say “my bad” and pay the Bonus X multiplied by the X days of notice… even if it works only 50% of the time, that could add up to a pile of money that should have been paid to terminated employees.
Jurisdiction of Court in dispute involving employee subject to collective agreement: James v Northern Lakes College, 2013 ABCA 408 (CanLII)
- The case is here
- employee was bound by collective agreement
- employment was terminated
- employee grieved and filed Statement of Claim
- request for grievance denied
- employer applied to have Statement of Claim struck on basis that legislation gave exclusive jurisdiction of the dispute to process set out in collective agreement
- Statement of Claim struck
- Employee appeals to Court of Queen’s Bench: denied
- Appealed to Court of Appeal
- Court of Appeal:
- at paragraph 8: “Courts often lack jurisdiction over these claims when they arise from the interpretation, application, administration or violation of a collective agreement and are therefore subject to the dispute resolution procedures in that collective agreement”
- at paragraph 9: “There may be rare instances where a court retains residual jurisdiction to hear labour disputes”
- Employee argued: “this is such an instance because (1) the dispute involves a discriminatory clause in a collective agreement (i.e. that probationary employees may grieve claims but may not arbitrate them), and (2) [employee] was otherwise barred from accessing the grievance process and receiving effective redress” paragraph 9) (emphasis added)
- In response to Argument #1 Court of Appeal states: “Employers may provide fewer rights to probationary employees than non-probationary employees without this amounting to “discrimination”
- In response to Argument #2 the Court of Appeal states at paragraph 11:
[…] Mr. James argues that a court may take jurisdiction where the grievance process fails to provide effective redress. Although I am sympathetic that his claims have gone unaddressed, the statutory scheme is not the cause. The chambers judge found that Mr. James could and did attempt to grieve his termination, but that his request was denied. I agree that the appropriate route to challenge this decision would have been judicial review. Mr. James argues that he was also denied access to arbitration as a probationary employee. However, Vaughan states that arbitration is not necessary for an aggrieved party to have effective redress, and that a lack of access to independent arbitration is not a sufficient reason in itself for courts to get involved in labour disputes. I find no basis on which to distinguish Vaughan from this case.
- Appeal denied
The decision is not groundbreaking but it highlights the value of front-end advice from an employment lawyer. The outcome may have been different had the employee pursued a judicial review of the decision to reject his grievance.