Alan Rowlands v. Custom Design Installation Ltd. and Ministry of Labour
4073-98-ES Alan Rowlands, Applicant v. Custom Design Installation Ltd. and Ministry of Labour, Responding Parties.
BEFORE: Caroline Rowan, Vice-Chair.
APPEARANCES: Alan Rowlands for himself; Jim Johnston and Sandra Jones for the employer; Frank Camilleri for the Ministry.
DECISION OF THE BOARD; April 5, 2000
1This is an application for review of an Employment Standards Officer's refusal to issue an Order to Pay brought pursuant to section 68 of the Employment Standards Act (the "ESA").
2The applicant, Alan Rowlands, filed a claim with the Ministry of Labour for eight (8) weeks' termination pay in lieu of notice on the basis that the responding party, Custom Design Installation Ltd. (the "company"), constructively dismissed him following his return from lay off in 1997. The applicant contends that the company substantially changed the terms and conditions of his employment as a result of the general reduction to his hours of work following his lay off in February 1997 and the elimination of the installation portion of his work, which effectively precluded overtime opportunities. The applicant also takes the position that the job offered to him following his return from layoff was not an offer of reasonable alternate work, since it represented a substantial reduction in wages from that earned prior to his layoff in November 1996. In this respect, the applicant notes that because the "available" service work offered was sporadic in nature, he no longer had the confidence of having a full-time job.
3The company, on the other hand, states that there was no material change to his position following his return from layoff. The company was simply no longer able to offer the applicant the overtime hours doing installation work that it had offered him in the past. As such, the company takes the position that the applicant quit his employment on or about April 1997, when the applicant refused to return to work unless and until he received an alternate job proposal from the company. In the alternative, the company takes the position that the applicant is not entitled to pay in lieu of notice of termination in any event, since the work offered to him following his return from lay off represents "reasonable alternate work", which the applicant refused.
4The employer takes the position that the service work offered to the applicant following his return from layoff was "reasonable alternate work" since the hours worked were more or less the same as the applicant's regular full-time non-overtime hours of approximately 44 hours, from 8:00 a.m. to 5:00 p.m. Monday to Friday. The company further submits that the service duties themselves were also reasonable, since service work had been a substantial part of the applicant's job in the five (5) years prior to his layoff.
FACTS
5The company is in the business of installing and servicing office furniture. The applicant worked for the company for a period of approximately 12 years doing both installation and service work.
6Prior to the applicant's layoff in November 1996, the applicant had been working on a full-time basis doing primarily service work during his regular hours of work, which were from 8:00 a.m. to 5:00 p.m. Monday to Friday. However, he also habitually worked a considerable number of overtime hours doing primarily installation work.
7On or about November 1996, the applicant was laid off due to a shortage of work. He was later recalled to work in December 1996. On the day of his return, the applicant suffered a work-related injury to his neck and shoulder. He therefore went off on workers' compensation until sometime in February 1997. The information provided to the employer from the Workers' Compensation Board ("WCB" now WSIB) indicates that the applicant received WCB benefits from December 16, 1996 to February 11, 1997.
8The applicant was recalled to work in February 1997. The applicant continued to work thereafter until on or about April 21, 1997, at which time he refused to continue to work until Mr. Johnston contacted him with a more acceptable job proposal.
9The company's records indicate that his hours of work during this period were as follows:
week of February 3 to 9, 1997 = 6 ½ hours week of February 10 to 16, 1997 = 27 ¼ hours week of February 17 to 23, 1997 = 8 ¾ hours week of February 24 to March 2, 1997 = 44 hours (+2 OT) week of March 3 to 9, 1997 = 0 hours week of March 10 to 16, 1997 = 34 ¾ hours week of March 17 to 23, 1997 = 38 ¾ hours week of March 24 to March 30, 1997 = 43 ¼ hours week of March 31 to April 6, 1997 = 37 hours week of April 7 to 13, 1997 = 44 hours (+2 ¼ OT) week of April 14 to April 20 = 20 hours
10There is a dispute between the parties regarding the extent to which the applicant made himself available for work in the period following his return from layoff from February to April 1997. The company's evidence was that the applicant would frequently indicate that he was unavailable to come to work on a given day without explanation, or that he would simply not show up to work on a given day as scheduled. The applicant, however, says that he was unavailable for work on no more than four days.
11Although both company witnesses, Mr. Johnston and Ms. Jones, testified that the applicant "frequently" failed to attend at work following his return from lay off, the Board notes that neither provided any company records or notations to substantiate this claim. If the applicant's absences for personal reasons were as "frequent" as Mr. Johnston and Ms. Jones suggested, it is reasonable to expect that management would have, at some point, started to record the dates on which such absences occurred. The Board also notes that neither Mr. Johnston nor Ms. Jones was able to provide even an estimate of the number of days on which such absences were said to have occurred. In addition, when pressed in cross-examination for examples of days other than the four conceded by the applicant, Ms. Jones referred only to unspecified days in late April 1997, which could presumably have been in the days following April 21, 1997 when the applicant refused to continue to work altogether.
12On the other hand, the applicant's evidence on this point is consistent with the detailed information that he set out in his correspondence to Mr. Johnston dated October 24, 1997, which was written by the applicant shortly after the period in issue (being from February 1997 to April 1997). In that letter, the applicant provides a chronology (including precise dates) of the events leading to his decision not to return to work. The applicant confirms that he informed Mr. Johnston's office staff that he would be unavailable for work for personal reasons for four days from February 18 to 21, 1997 inclusive. No other absences for personal reasons are recorded in the applicant's chronology. The Board notes that the applicant's testimony is entirely consistent with his precise and detailed account of events that took place following his return from layoff, which account was written almost two and a half years earlier when his memory of events was still relatively fresh.
13Given the vague and imprecise nature of the company's evidence on this point as compared to that of the applicant, the Board finds the applicant's version of events as it relates to his absences for personal reasons to be more reliable. The Board therefore accepts the applicant's evidence that, during the period following his return from layoff from February to April 1997, he worked all of the hours made available to him by the company other than four days in the week of February 17, 1997, noted in the applicant's correspondence.
14The applicant complains that following his return to work in February 1997, his hours of work were significantly reduced by virtue of the company's decision to restrict his duties to service work, rather than a combination of service and installation work. In the past, the applicant had generally worked between 50 and 60 hours per week doing primarily service work during the day and primarily installation work on an overtime basis on weekends and evenings. Upon his return from layoff, Mr. Johnston told the applicant that the company would provide him with the available service work, but that it could no longer offer the applicant installation work on an overtime basis or otherwise.
15Mr. Johnston explained that the reason for this was two-fold. Firstly, it was Mr. Johnston's understanding that the applicant was no longer physically capable of doing the installation work because of his work related injury. He explained that his understanding is based on a letter the company received from the WCB dated February 5, 1997, which generally states that the company has an obligation to return the applicant to "suitable employment". Secondly, the company could no longer justify giving the applicant installation work on an overtime basis for economic reasons. Mr. Johnston explained that the company's competitors had started offering clients installation work at regular rates and that the company could simply no longer compete by having the applicant do this work at overtime rates.
16The applicant told Mr. Johnston that he was unhappy about this change, since he depended on the additional wages to meet his expenses. Mr. Johnston responded by suggesting that they discuss the possibility of an alternate job proposal. Subsequently, however, Mr. Johnston determined that he could not come up with an alternate job proposal, which would meet the applicant's and the company's needs. In essence, Mr. Johnston therefore told the applicant that it would simply be "business as usual" until an alternate job arrangement could be found.
17The applicant continued to expect that Mr. Johnston would present him with an alternate job proposal. The applicant made numerous attempts to meet with Mr. Johnston to find out the details of such a proposal. When Mr. Johnston failed to meet with him, the applicant ultimately decided not to continue to work until such a meeting took place. The applicant communicated his decision to personnel in the office responsible for scheduling. He also left a message for Mr. Johnston that he would not return to work until he had heard from Mr. Johnston regarding the details of an alternate job proposal. The applicant explains that because Mr. Johnston never contacted him, he never returned to work after on or about April 21, 1997 despite the fact that service work continued to be available for him to do.
18On or about October 20, 1997, Mr. Johnston wrote the applicant a letter confirming that representatives of the company had called him on numerous occasions both in February and in April, 1997, to offer him service work, but that the applicant had refused to return to work. The letter also notes that the applicant had failed to follow the company's policy requiring that employees call each day by 4:00 p.m. to determine if there is work available the following day. Mr. Johnston then notes in his letter that, since the company has not terminated the applicant's employment, the applicant continues to be covered under the company's benefit plan. The letter concludes with a warning that if the applicant does not report to work by October 27, 1997, the company will assume that he has resigned his employment.
19The applicant responded with a three-page letter which he says he faxed to Mr. Jim Johnston on or about October 24, 1997 and also sent by priority courier. Mr. Johnston, however, indicates that he never received the applicant's response.
20In any event, the applicant states in his letter that his position has not changed and that he continues to await the details of an alternate job proposal. More specifically, the applicant refers to Mr. Johnston's suggestion that they meet to discuss an alternate job proposal and the fact that this meeting never occurred. The applicant notes therein that he continues to be interested in hearing from Mr. Johnston in writing regarding an alternate job proposal. However, the applicant states that the current proposal that he perform only the available service work is not acceptable.
21Although the applicant never returned to work, the company continued to pay the full premium costs of the applicant's benefit coverage through Sun Life until March 1998.
DECISION
22Since the applicant's period of employment with the company was approximately twelve (12) years, the amount of pay in lieu of notice, if found to be owing, would be eight (8) weeks' pay pursuant to the terms of section 57 of the ESA. The issue to be determined in this case is whether or not the applicant is entitled to eight (8) weeks' pay in lieu of notice of termination pursuant to section 57 of the ESA on the ground that he was constructively dismissed following his return from layoff in February 1997, or whether, as the company argues, the applicant is not entitled to these monies on the basis that the applicant refused the company's offer of "reasonable alternate work" within the meaning of the exception contained in Regulation 327 to the ESA.
23The relevant provisions of the ESA and Regulations thereunder read as follows:
- (1) No employer shall terminate the employment of an employee who has been employed for three months or more unless the employer gives,
(h) eight weeks notice in writing to the employee if his or her period of employment is eight years or more,
and such notice has expired.
(14) Where the employment of an employee is terminated contrary to this section,
(a) the employer shall pay termination pay in an amount equal to the wages that the employee would have been entitled to receive at his or her regular rate for a regular non-overtime work week for the period of notice prescribed by subsection (1) or (2), and any wages to which the employee is entitled;
(b) the employer shall pay during the period of notice prescribed by subsection (1) or (2) those contributions to be made with respect to a fund, plan or arrangement to which Part X applies in order to maintain the benefits to which the employee is entitled during the period of notice; and
(c) the employee shall be deemed during the period of notice prescribed by subsection (1) or (2) to be actively employed on the same terms and conditions in existence during his or her employment for the purpose of entitlement to benefits under a plan, fund or arrangement to which Part X applies.
Regulation 327, section 2:
- Section 57 of the Act does not apply to a person who,
(a) is laid off after refusing an offer by the employer of reasonable alternate work;…
24The first question to be determined is whether or not the terms and conditions of the applicant's employment with the company were substantially changed following his return from lay off in February 1997 such that the applicant's employment may be said to have been terminated within the meaning of section 57 of the ESA. If so, the next question is whether or not the work offered to him by the company nonetheless represents an offer of "reasonable alternate work" within the meaning of the exception to the obligation to provide notice of termination or pay in lieu thereof contained in subparagraph 2(a) of Regulation 327.
25The evidence before the Board is largely undisputed that prior to the applicant's layoff in November 1996, the applicant worked between 50 and 60 hours per week and habitually worked overtime hours. The applicant's work involved a combination of service and installation work. The applicant, however, conceded in evidence that the service portion of his work represented the majority of his work in the five (5) years prior to his layoff and that he did primarily service work during the core business hours between 8:00 a.m. and 5:00 p.m. Monday to Friday. The installation work was generally performed on weekends and evenings and therefore represented the majority of the applicant's overtime hours.
26Following the applicant's return from layoff in February 1997, Mr. Johnston offered the applicant the available service work. This offer provided little prospect of overtime hours, since there was little service work available that could be done on an overtime basis. His hours of work, which had previously been in the range of 50 to 60 hours a week, were substantially less and, in a number of weeks, were very low. For example, the records indicate that there was no work available for him to do in the week of March 3, 1997 and only 20 hours of work in his final week, being the week of April 14, 1997.
27A review of the applicant's hours of work following his return from layoff (other than in the week of February 17, 1997 when the applicant was unavailable for work in any event for personal reasons) indicates that his hours of work ranged from an average of approximately 33 to 44 hours per week. Since the applicant was paid on an hourly basis for work actually performed, his earnings were therefore significantly reduced in this period as compared to the period in 1996 prior to his layoff when he was working an average of 50 to 60 hours per week and was therefore also earning a considerable amount of overtime. This represents a reduction of approximately twenty-five (25) percent to the applicant's hours of work (and the resulting decrease in his earnings of even more than that) following his return from lay off. Even if the Board disregards the overtime hours worked prior to the applicant's lay off, the Board notes that the applicant did not, as the company contends, generally work his regular full-time non-overtime hours of approximately 44 hours per week in the period following his return from lay off. In fact, in the majority of weeks following the applicant's return from lay off, his hours of work were more than ten (10) percent less than 44 hours and as previously noted, they were much lower than that in certain weeks. In all of these circumstances, the Board finds that the reduction to the applicant's hours of work and earnings as a result of the elimination of the installation portion of his job following his lay off represents a substantial change to the terms and conditions of his employment.
28The next issue to be determined is therefore whether the work offered nonetheless represents an offer of "reasonable alternate work" as contemplated under the exception to the statutory requirement to provide notice of termination or pay in lieu thereof contained in Regulation 327.
29With respect to the restriction of his duties to service work, the Board firstly notes that there is insufficient evidence before it on which to conclude that the company was obliged to eliminate the installation portion of his job because of the applicant's work related injuries, as Mr. Johnston claimed. The letter referred to by Mr. Johnston in his evidence appears to be a standard form letter from the WCB indicating that the company must reinstate the applicant to "suitable employment". While Mr. Johnston may have interpreted the letter as suggesting that the applicant should no longer do installation work, this letter does not make clear that the applicant was, in fact, restricted from doing so for medical reasons. There is further insufficient other evidence before the Board on which to conclude that the applicant was so restricted.
30In any event, the Board finds that the primary reason that the applicant's duties were restricted to service work was because Mr. Johnston had determined that it was not cost-effective to have the applicant do installation work. In this respect, the Board notes that Mr. Johnston conceded that he would not have offered this work to the applicant following his return from lay off for economic reasons, whether or not the applicant was physically capable of doing it.
31The Board, however, accepts the company's submission that the service duties offered to the applicant were not in and of themselves unreasonable, since this work represented the majority of the applicant's work in the five years' prior to his layoff. The resulting reduction in the applicant's hours of work and earnings following his return from layoff is, however, more problematic.
32The company records confirm that the applicant's hours of work during this period were significantly lower than his hours of work prior to his layoff. As previously noted, the applicant was working substantially less than even his full-time non-overtime work week of 44 hours per week in the majority of weeks following his return from lay-off and in one week he had no hours or earnings at all. The Board also notes that Ms. Jones testified that in April 1997 the level of business was such that few employees were working full weeks and that, as a result, a number of company employees had quit. In all of these circumstances, it not surprising that the applicant no longer felt he had the confidence of having a full-time job particularly since he had no minimum hour guarantee.
33In assessing whether or not the company has offered "reasonable alternate work", it is also appropriate for the Board to consider the overtime possibilities available to the applicant. As the Referee indicated in Davis & Henderson Ltd., July 31, 1992 ESC 3072 at p. 12: "To suggest that an individual, in assessing the value to themselves of job offer does not consider the amount of their earnings at the end of the year, including any amount of overtime, is to deny the reality". On the facts of the present case, the company's proposal to restrict the applicant to the available service work provided little possibility of overtime, which the applicant had historically performed on a regular basis. While the service duties were not themselves unreasonable, an offer of only the available service work in this case represented a substantial reduction to the hours of work that the applicant had worked on a regular basis for many years prior to his layoff in November 1996. The work offered also provided little or no overtime opportunities, which the applicant had previously enjoyed.
34Having carefully considered all of the evidence and for all of the foregoing reasons, the Board concludes that the company substantially changed the terms and conditions of the applicant's employment following his return from lay off without proper written notice and that the "available" service work offered following the applicant's return from leave did not represent an offer of "reasonable alternate work" within the meaning of the exception contained in Regulation 327 to the ESA.
35While an employer is generally free to make the type of changes made to the applicant's position in this case in order to accommodate its changing business needs, the ESA restricts it from doing so without the requisite advance written notice. In this case, the amount of advance written notice required would have been eight weeks. The purpose of the requirement is to give the affected employee a minimum period of time to adjust to his/her impending change in circumstances, either by seeking alternate employment elsewhere or otherwise.
DISPOSITION
36For all of these reasons, the application is allowed. The Board therefore orders the company to pay the applicant an amount equivalent to eight (8) weeks' pay in lieu of notice of termination. In accordance with the provisions of subsection 57(14)(a) of the ESA, this represents eight (8) weeks' pay at the applicant's regular hourly rate for his regular non-overtime work week, which in this case is 44 hours per week, plus interest thereon calculated at the prescribed rate under the Courts of Justice Act. This panel of the Board will remain seized in the event that the parties are unable to agree on the quantum of monies owing.
"Caroline Rowan"
for the Board