0588-99-ES; Lorraine Jordan, Applicant v. Academy of Learning and Ministry of Labour, Responding Parties.

0679-99-ES Computer Competency Burlington Ltd., Applicant v. Lorraine Jordan and Ministry of Labour, Responding Parties.

Employment Practices Branch File No. 52006118

BEFORE: Inge M. Stamp, Vice-Chair.

APPEARANCES: Robert McKeown and Keith McDonald for the applicant; Lorraine Jordan, and Reg Jordan for the responding party; Karima Chatur for the Ministry of Labour.

DECISION OF THE BOARD; April 26, 2000

1On the day scheduled for hearing these matters the applicant in Board File No. 0588-99-ES withdrew her appeal. Board File No. 0679-99-ES is an employer appeal of an Order to Pay dated April 14, 1999 in the amount of $5,765.76.

2The Employment Standards Officer found the employer had violated section 57 of the Employment Standards Act (the “Act”) by failing to provide the claimant, Lorraine Jordan, with written notice of termination or pay in lieu of such notice.

3The employer took the position that Mrs. Jordan voluntarily quit her employment and is not entitled to notice. The employee denies that she quit. Mrs. Jordan acknowledged that she worked reduced hours on a temporary basis in February due to health reasons.

4I heard evidence from Lorraine Jordan and Keith McDonald. Mr. McDonald is currently the president of Computer Competency Burlington Limited.

5The Record of Employment (ROE) shows the “last day for which paid” as March 6, 1998. The first day worked is shown as April 1, 1987. The reason for issuing the ROE indicates code “A”.

6The Officer’s narrative report describes code “A” as shortage of work. Exhibit 4, a copy of the ROE dated March 13, 1998 only shows the front page of the form. However the employer did not dispute that code “A” did in fact refer to “shortage of work” as described by the Officer in his report. Code “E” is used for a “quit” and code “M” for a “dismissal”.

7The employer was unable to explain why the code did not reflect his claim that the claimant had voluntarily terminated the employment relationship.

8In the Spring of 1998 Mr. Keith McDonald purchased the business from Jeff Cairns. At the time of the purchase there were three employees including Mrs. Jordan. Prior to the sale of the company, Mr. McDonald, Mr. Cairns and Mrs. Jordan signed a document which confirmed the parties’ agreement that Mrs. Jordan would work part-time at $17.50 per hour. The document, exhibit 1, is dated February 3, 1998.

9At the time the agreement was signed Mrs. Jordan was working full-time as Training Director at Academy of Learning Burlington. The document indicates that Keith McDonald will make new staffing arrangements, after closing of the planned purchase of the business.

10The Memo, dated February 3, 1998 states:

Memo Academy of Learning Burlington

Date: February 3, 1998

To: Lorraine Jordan

From: Jeff Cairns and Keith McDonald

Subject: Change in employment arrangements

Further to our discussions regarding your recent health concerns, and per your request, we confirm that we are in agreement to relieve you of the full time position of Training Director at Academy of Learning Burlington.

During the month of February, 1998 we request that you provide temporary, part-time services @ $17.50 per hour, to assist while other arrangements are made. Keith McDonald will make new staffing arrangements, after closing of the planned purchase of the business.

New arrangements regarding possible provision of life skills training seminars, will be as required and at the discretion of Keith McDonald after closing of the purchase.

All parties confirm agreement to these arrangements below,

………………………………Keith McDonald, (interim manger)

………………………… Jeff Cairns, (Computer CompetencyBurlington)

………………………………Lorraine Jordan

11Exhibit 1 did not show any signatures however it was agreed that all three individuals signed the document.

12Mr. McDonald testified that it was his view that the first paragraph of exhibit 1 was Mrs. Jordan’s resignation from her full-time position.

13Mrs. Jordan together with a partner had developed “Life Skills Training Seminars”. Mr. McDonald wanted to make sure that it was understood that while he may want to make use of these seminars there was no promise to do so.

14Keith McDonald, President and General Manager sent a letter dated March 6, 1998 to Lorraine Jordan which states as follows:

“Dear Lorraine,

As General Manager and owner of Academy of Learning Burlington I must advise you that your current status of temporary part-time will change to complete layoff status effective today.

The company may consider discussing further employment or continued layoff in the future depending on business conditions and mutual interest and agreement.

Please submit your actual hours of work for this week to me personally by telephone or fax so that I may prepare your final pay.

Also please take with you any strictly person(sic) items that may be in your office. Please keep in mind that any work done on your computer on company paid time should not be removed as it would be the property of the company.

On behalf of the company and it’s various previous owners, I wish to thank you for the contribution you have made to the success of Academy of Learning Burlington.

All the best,

Sincerely,

Keith McDonald

President and General Manager.

15Mr. McDonald testified that the purpose for the above letter, exhibit 2, was to advise Mrs. Jordan that he did not intend to take advantage of any option to offer any future employment. At this point in time Mr. McDonald had taken control of the business.

16After Mr. McDonald took control of the company an OSAP audit performed by a firm of chartered accountants showed six record keeping deficiencies on eleven student loans during the period from August 1997 until the end of February 1998. No deficiencies were shown after March 1, 1998. The audit was conducted at the request of the Ministry of Education in accordance with the OSAP Compliance Audits- Guidelines for Auditors, published by the Ontario Ministry of Education and Training (“OMET”).

17Mr. McDonald testified the business was not well managed and the paperwork was not in good condition. The student loan files were not properly documented. Mr. McDonald testified these deficiencies could result in their OSAP license being cancelled.

18Schedule “D” of exhibit 4 indicated the nature of the deficiencies of the Student File Documentation. Mr. McDonald testified in chief that these are the schedules Mrs. Jordan worked on. He went on to state that this kind of performance was not satisfactory and would justify the person being replaced immediately. He believed this was serious enough to fire that person.

19During cross examination Mr. McDonald conceded that he was not present when the discussions between Jeff Cairns and Mrs. Jordan took place that resulted in the February 3rd, 1998 memo. He wrote down what he understood was discussed between Mr. Cairns and Mrs. Jordan and what he knew from his own discussions with Mrs. Jordan.

20When asked why there was no reference to any “resignation” Mr. McDonald stated that the memo is perhaps not well drafted but it does reflect his understanding of Mrs. Jordan’s desire to be removed from full time employment.

21Similarly Mr. McDonald conceded that exhibit 2 was also not well drafted since that letter of March 6, 1998 makes no reference to any resignation. It does refer to “complete layoff” status effective March 6, 1998.

22Mr. McDonald conceded in cross examination that yes there was a shortage of work resulting in “A” being entered on the ROE. It is his evidence that in addition to a shortage of work Mrs. Jordan also voluntarily quit and he chose the code “A” for shortage of work because he could not use two codes.

23Mr. McDonald was not fully aware of Mrs. Jordan’s arrangements with Mr. Cairns with respect to the Academy of Learning using her Life Skills Training Seminars.

24Mr. McDonald did not discuss the deficiencies identified in the OSAP audit with the previous owner, Mr. Cairns. Mr. McDonald was aware at the time of the purchase that the business was not in good shape but he had not investigated the accuracy of the record-keeping.

25When asked whether Mr. Cairns had expressed any concerns about Mrs. Jordan’s performance Mr. McDonald answered he was not sure whether he did or did not. They had many discussions about the business but he could not recall any specific statement.

26Mr. McDonald testified that in his view Mrs. Jordan chose to withdraw from the full-time position and provide temporary services. She knew the business was being sold and she was babysitting the business until the new owner decided what to do with it.

27On March 6 Mr. McDonald states he advised Mrs. Jordan that he decided not to accept her offer of future services. She had agreed to move from full time to part time and any new arrangement would be at his discretion.

28Lorraine Jordan worked for the company for almost nine years. She was the Director of Training and the day to day manager of the Centre for nine years. There had been no indication that her performance was less than satisfactory. Late summer 1997 to January 1998 Mrs. Jordan found the workplace stressful. There was shortage of materials, cheques were late. There were problems with the computers.

29Mrs. Jordan’s uncontradicted evidence is that because of medical problems she asked for a temporary reduction of hours in February which was agreed to by the previous owner, Mr. Jeff Cairns.

30There was no indication from Mr. McDonald when he took over the business on March 1st that Mrs. Jordon’s employment was coming to an end. On

March 6, Mr. McDonald advised Mrs. Jordan that he was making some structural changes and no longer required her services. He asked for the keys to the premises and told Mrs. Jordan to remove her personal belongings.

31Mrs. Jordan did not open the letter given to her at the meeting on March 6 until she got home. It was her understanding at the meeting that she was laid off. The letter confirmed her understanding that she was being laid off.

32On August 6, 1998 Mrs. Jordan wrote to Mr. McDonald asking for clarification of the “complete layoff” . The last paragraph of the letter asks “Please let me know, by written reply, whether I am still on layoff or whether my employment has been terminated.”

33Mrs. Jordan testified with respect to the six deficiencies in the OSAP compliance audit. Her explanations and evidence were credible and in the circumstances it is not necessary to recount each one of the examples except to say that there was nothing in Mrs. Jordan’s conduct that would be less than satisfactory. For example, item no. 1 concerned a missing SIN card in the file. The student had misplaced her SIN card. Mrs. Jordan advised the administrator of OACC who said she would submit the application but Jordan must make sure to get the card. The student was not forthcoming with the information. Mrs. Jordan was aware it was against OSAP rules to process the application without the SIN information. Mrs. Jordan advised Jeff Cairns who told her to do everything she could to get the information but that they could not afford to terminate the student – they needed the sales. Mrs. Jordan was not comfortable knowing that there were problems with the OSAP loans. Jeff Cairns did not testify.

34During cross examination Mrs. Jordan testified that she did not protest on March 6 when she was told her services were no longer required because she was surprised by the turn of events.

35Mrs. Jordan had registered her partnership which developed the Life Skills Training Seminars four years ago. This was done with the knowledge and support of her then employer Jeff Cairns. The Academy used the seminars and paid the partnership for them.

36Mrs. Jordan was not concerned at the time of signing the February 3 memo that it did not refer to her returning to full time work. She believed that Jeff Cairns conveyed their discussions with respect to this temporary arrangement to Mr. McDonald.

37Mrs. Jordan was not told at any point that her temporary arrangement would end up in a layoff. There was no response to the August 6 letter asking for clarification of her employment status.

38Counsel for the employer submits the change in job status was brought about at the request of the employee. Mrs. Jordan resigned her full-time position and took a temporary monthly position. Everyone adopted a wait and see position. She was not entitled to notice because she was not fired. If she did not resign on February 3 her job status was changed on February 3 and her future employment was uncertain therefore any notice period runs from February 3 so that by March 6 she has already worked four of her eight weeks notice period.

39Counsel for the employer submits the law entitles the employer to rely on cause even if that was not known at the time. More than half of the OSAP loans were deficient. It was her responsibility.

40The order to pay was based on the average of the previous 13 weeks’ pay. Section 57(14) of the Act provides for 8 weeks pay in lieu of notice at the regular rate of pay for the period of the notice. The order to pay should be based on what this employee would have earned for the eight weeks post March 6. Had she worked the eight weeks she would have been paid at $17.50 per hour for half days. There is no evidence that she was promised any return to full time. It is the employer’s position that her employment did not continue past March 6, 1998 but if the Board should find that it was withdrawn as of March 6 then section 57(14) of the Act applies.

41The Ministry’s position remains the same. This is a case of termination without notice and Mrs. Jordan is entitled to termination pay as calculated by the Officer. The part time hours took effect February 3, 1998. The Claimant’s understanding was that she was going to be on those reduced hours indefinitely or until other arrangements were made. Mr. McDonald confirmed he exercised his discretion either to continue Mrs. Jordan’s employment or terminate it on March 6, 1998. My submissions would be the termination took place or notice of termination took place as of March 6, 1998. That is when he made the decision to terminate Jordan, not on February 3.

42The February 3 memo was an agreement to go to reduced hours and was not notice. With respect to the willful misconduct the only exclusion the Act allows is continued willful misconduct. This is a very high test. It would be my position that the employer has not met this test. Jeff Cairns was not here to present any evidence. There was no willful misconduct. The employer has not met that case.

43The Ministry submits the calculation at half time is a red herring. The calculation is made based on the 13 week period pursuant to the Ministry’s policy when a temporary layoff becomes a permanent layoff, i.e. a termination. The regular rate of pay is determined on an average of 13 weeks prior to March 6, 1998. That is why the Order to Pay should be affirmed and the calculation should be upheld based on these submissions.

44Mrs. Jordan’s representative submits there was no verbal resignation, no written resignation. Mr. McDonald was not in attendance at the meeting with Mr. Cairns. Mr. McDonald confirmed verbally that Mrs. Jordan was on layoff during the March 6/98 meeting. The memo of March 6 confirms the change to complete layoff status. This is confirmed by the ROE. The employee comes away from the meeting with Mr. Cairns with the understanding that the reduced hours are for a temporary period and full time employment would return albeit in a different role depending on what Mr. McDonald wanted.

45It was Mrs. Jordan’s understanding during her meeting with Mr. Cairns that this was not the end of her employment but a temporary change in hours leading to new employment with the new owner.

46With respect to the issue of just cause the conduct was with the full knowledge and blessing of Mr. Cairns. He did not have the money to reimburse the government.

DECISION

47The evidence does not support the employer’s position that Mrs. Jordan quit. The paperwork generated by the employer such as the ROE contradicts the employer’s viva voce evidence. The employer’s explanation is simply not credible. The employer agrees the business was not well managed when he purchased it but claims he had no discussions with Mr. Cairns as to Mrs. Jordan’s performance. Again this is not credible.

48There was a great deal of pressure on Mrs. Jordan which appears to have been caused by Mr. Cairns' absence from the office. It is inappropriate for

Mr. McDonald to suggest that Mrs. Jordan could have been fired in circumstances where Mr. Cairns, Mrs. Jordan’s employer at the time, had full knowledge of the deficiencies of the student applications. Furthermore the uncontradicted evidence suggests Mr. Cairns advised Mrs. Jordan to process the applications regardless of their deficiencies.

49I have not heard any evidence that would cause me to vary the Order to Pay .

DISPOSITION

Board File No. 0588-99-ES

50Withdrawn by leave of the Board.

Board File No. 0679-99-ES

51The Order to Pay is affirmed. The Director is required to pay out the monies held in trust, and any interest accumulated thereon, to Lorraine Jordan, as soon as practicable.

“Inge M. Stamp”

for the Board