0935-01-ES Tenneco Canada Inc., Applicant v. Jerry F. Schwartz and Ministry of Labour, Responding Parties.
Employment Practices Branch File No. 60 05591
BEFORE: Timothy W. Sargeant, Vice-Chair.
APPEARANCES: Adrian Miedema, Michael Gautier, Richard Elzby and Jonathan Halwagi for the applicant; Jerry Schwartz and Elaine Schwartz for the responding party; Murray Klein for the Ministry of Labour.
DECISION OF THE BOARD; December 12, 2001
1This is an application under section 68 of the Employment Standards Act, R.S.O. 1990, c.E-14, as amended, (the “Act”) for a review of an Order to Pay No. 61230 in the gross amount of $25,755.85 (including an administration fee of $2,341.46) filed by the applicant, Tenneco Canada Inc. (the “employer”). The Order to Pay relates to termination pay, vacation pay and severance pay awarded to the claimant Mr. Jerry Schwartz (“Schwartz”).
2At the commencement of the hearing all parties concurred that pursuant to section 65 (1.3) of the Act the Employment Standards Officer could not make an Order greater than $10,000.0 in this matter. The parties further agreed that if the appeal was unsuccessful the claimant would be entitled to $10,000.00.
3The employer appeals:
that it did not terminate Mr. Schwartz’s employment constructively or otherwise, and/or;
in any event the employer offered Mr. Schwartz reasonable alternative employment or work within the meaning of the Act.
4The facts of this matter are not really in dispute
5Mr. Schwartz was a valued employee. He had worked for the employer for approximately 16 years, the last 14 essentially in the position of a Chemical Lab Technician – a grade 6 level position. The highest grade at the Company for non-managerial staff is at the grade 7 level. In this position he worked with three other employees under the supervision of the Environmental Co-ordinator. Without detailing all the duties of the job, it essentially involves testing waste water treatment, testing all the chemical waters in the plant to ensure proper chemical levels cleaning washers in the plant, and recharging the washers to the proper chemical level. The Environmental Co-ordinator estimated that 25% of the job was technical (in the sense of operating instrumentation and computers), 50% mechanical and electrical and 25% straight labour.
6On August 14, 2000 employees were notified that there would be twenty redundancies. On August 24, 2000 Mr. Schwartz was advised his position was redundant by a letter dated August 23, 2000. He had handed back the notice as he felt his position should not have been declared redundant, but another employee’s position should have been so declared. However, it was confirmed by the employer on August 28, 2000 that Mr Schwartz’s position was redundant and that he was to report to the Monotube Department on Tuesday, September 5, 2000 (Monday was a holiday). This position is a grade 3 level position.
7In regards to redundancies the employer had a redundancy policy that has been in place for approximately 20 years. Such policy is found in the Associate Handbook (the “Handbook”) It is to be noted that the employer refers to its employees as Associates. At the employer’s premises, although a non-union environment, employees are represented by an Associates’ Council (the “Council”). Through discussions with this Council the redundancy policy had been amended by the employer from time to time over the years. At the time of Mr. Schwartz’s redundancy, the policy provided that the employer would first declare a number of redundancies. In this case 20 positions. The 20 most junior employees are then laid-off regardless of their classification. The employee with least seniority in the classification in the department that is declared redundant is then transferred temporarily into one of the twenty positions. The wage of the employee transferred is protected for a period of five months. Such employee is permitted to post for vacant positions, which are decided first on ability to do the job, and if equal, then by seniority. If the employee’s own position becomes vacant he is immediately entitled to that position.
8Mr. Schwartz had on August 30, 2000 applied for several positions. Ultimately, he had not been successful in any of these postings and thus had been assigned to the Monotube Department.
9On the evidence of both the employer and Mr. Schwartz the Board is prepared to find that the position in the Monotube Department was significantly different from that of a Chem. Lab Technician. Not only was the Monotube position graded significantly lower, it was a production job with far more lifting, bending and labour attached to such job than is the case with the Chem. Lab Technician job.
10Mr. Schwartz testified that ultimately his wage level (after the five month guarantee period) would be reduced from approximately $20.00/hour to approximately $14.00/hour. This was significant as he had a wife and three children to provide for. In addition in the Lab Chem. job he would receive an additional $310.00 every third week for being on call, as well as shift premium of 28 cents an hour. This was not provided in the Monotube position.
11Mr. Schwartz did report to the Monotube job. He had had a previous compensable back injury. He found the job in the Monotube physically demanding and affecting his back. In fact, he had had to visit his chiropractor on a couple of occasions. Further he testified he had received no training in the new position (though he felt he was entitled to three weeks training) and therefore found it difficult to keep up with the team assigned to a particular work rotation. In fact he had been criticized for breaking the machinery and for not keeping up. Further when he complained to his Department Head and Health and Safety Representatives he was told by the Department Head “you’ll get used to it – just takes time”. When asked if he knew that the employer had a modified work program he acknowledged that he did. He further acknowledged he never asked for modified work, but felt as he complained to the Department Head and the Safety Representative, the Department Head should have followed up his concerns. In the final analysis Mr. Schwartz felt he could not remain in the new job because of the potential lost income in the future, and because of the physical requirements of the job that were affecting his back. Thus, Mr. Schwartz testified, he felt he had to go back to the Monotube position or quit. Jobs were scarce in Owen Sound, but he was able to line up a construction job. He did not want to return to the Monotube position, and he felt his old job of Chem. Tech. (which he liked) was no longer “there”.
12This brings us to the meeting of September 11, 2000 with the Human Resources Department. Mr. Gautier, the Associate Relations Services Leader, testified that on that day Mr. Schwartz came into his office stating a desire to resign. Mr. Schwartz indicated something to the effect that line work was not something he enjoyed. Mr. Schwartz told Mr. Gautier he had a construction job lined up. Mr. Gautier told Mr. Schwartz that more postings would be coming up and did Mr. Schwartz wish to reconsider as there would be other openings he might want to consider. To Mr. Gautier, Mr. Schwartz seemed at ease with his decision to quit and indicated that “he wants to move on”. Mr. Gautier asked for a letter of registration, and Mr. Schwartz asked him to draft such letter. Mr. Gautier did and Mr. Schwartz signed the letter. It stated:
September 11, 2000
“I, Jerry Schwartz, am giving my 2 weeks notice and would finish my employment with Tenneco Automotive as of Sept. 29/00”
13Mr. Schwartz had asked if he could give two weeks notice, one a working week, and the second a vacation week. Mr. Gautier had no problem with this request. Mr. Schwartz also asked for letters of reference, which were readily supplied. According to Mr. Gautier, Mr. Schwartz did not appear in any way angry or upset. Mr. Schwartz never mentioned any medical concerns, never asked for modified work and never questioned the redundancy policy. In his testimony Mr. Schwartz agreed that the testimony given by Mr. Gautier concerning the September 11th meeting was factual and took no disagreement with such account.
14In his testimony, on cross-examination, Mr. Schwartz testified that the night before “I quit” the construction company had made him an offer of employment – he was going to drive a packer. For some reason this job never materialized. However, Mr. Schwartz testified that when the construction job failed to materialize, he did not return to the employer and ask for work as he “knew my job wasn’t there” and he was concerned that any position would eventually result in a significant loss of earnings.
15In regards to the redundancy policy Mr Schwartz admitted he was aware of the policy, though prior to this redundancy, he had never been laid-off. Mr. Schwartz felt this redundancy was significantly different from previous redundancies in that many senior positions were declared redundant.
16The Associate Handbook provides in part:
This booklet is provided as a guide to company policies, procedures, benefits and working conditions for Associates of Monroe Auto Equipment Co. of Canada. This handbook is not meant to be all inclusive and cannot anticipate every situation or answer every question. Therefore, it serves as a reference when you have questions. It is not an employment contract and is not intended to create contractual obligations of any kind. In order to maintain necessary flexibility in the administration of policies and procedures, the Company reserves the right to change, revise or eliminate any of the policies, procedures and/or benefits described in this handbook.
Furthermore the Associate Acknowledgment Form signed by Mr. Schwartz states in part:
Furthermore, I acknowledge that this handbook is neither a contract of employment nor a legal document. I have received the handbook and I understand that it is my responsibility to read and comply with the policies.
Mr. Schwartz testified that he had never specially been asked to agree with the redundancy policy. In fact, it is clear that he was never asked about the policy directly by the employer. Rather as stated before, dealings with the redundancy policy were carried on between the Council and the employer at various Associates’ Council meetings. Mr. Schwartz though sitting on other various committees was not a member of this Council.
17Counsel for the employer submitted that clearly on the evidence there had not been a dismissal by the employer constructive or otherwise. Counsel argued that the triggering event for Mr. Schwartz leaving the employer was another offer of employment. Mr. Schwartz had even given the appropriate two weeks notice, which is not consistent with a constructive dismissal. Mr. Schwartz was a good employee whom the employer wished to retain. The employer tried to persuade Mr. Schwartz to change his mind and remain with the Company.
18In the alternative counsel for the employer submits that the redundancy policy was well known to all employees and formed a term of the contract of employment. Counsel pointed out that the Handbook contained many terms of employment, for example, holiday pay and benefits. The fact that the Handbook stated that the Handbook did not form part of an employment contract, did not mean that certain policies contained in the Handbook were not terms of employment. The redundancy policy was well established at the employer’s location. It was revised from time to time by input from the Council. Mr. Schwartz was aware of the redundancy policy. Mr. Schwartz’s concern had not been with how the policy should be applied but rather with the employer’s choice as to who was redundant. The redundancy policy, therefore, in counsel’s submission formed part of Mr. Schwartz’s employment contract. The employer had not breached such policy. To find constructive dismissal it must be shown that there has been a fundamental breach of the employment contract. There is no such breach in this instance, as the employer acted within the terms of the employment contract.
19Finally and in the alternative counsel for the employer submitted that in any event reasonable alternative employment or work had been provided within the meaning of the Act. It was an expressed or implied term of the employment contract on redundancy that the job assigned to Mr. Schwartz was, within the meaning of the Act, reasonable alternative employment of work. Counsel pointed out that with regard to Mr. Schwartz’s health concerns, Mr. Schwartz had never asked for modified duties, or presented medical evidence that he was incapable of performing the Monotube position. Employees if they wish to be accommodated have an obligation to bring forward such concerns in a meaningful way so the employer may consider the concerns. Though he had spoken to the supervisor of his concerns, when told he would get used to it, he never disputed such statement. Further and significantly when he quit on September 11, 2000 Mr. Schwartz though indicating he did not like working on the production line, never raised a concern that he was medically incapable of performing the work he had been assigned to.
20Counsel for the Ministry and Mr. Schwartz submitted that in these circumstances there had been a constructive dismissal. Clearly on the wording of the Handbook the redundancy policy did not form part of the employment contract nor was the Handbook intended to create legal obligations. An employee reading such language would presume that the redundancy policy was not part of his employment contract. Further it was clear that this policy was subject to change and in fact had been changed several times over the past twenty years. Thus counsel for the Ministry’s submitted such policy was not a term of Mr. Schwartz’s employment contract.
21Counsel for the Ministry further submitted that one must look at the situation from the point of view of an unsophisticated employee. Mr. Schwartz was happy in his job until the redundancy. Clearly he was a good employee. All of a sudden he is faced with a far more physically demanding job, with the potential of far less earnings. There is no assurance that after five months Mr. Schwartz’s income will not be significantly reduced. Clearly there is a drop in prestige from a grade 6-technician job to a grade 3 labour job. In addition the new job was causing Mr. Schwartz significant problems relating to his back. The object of the Act is to be paternalistic. In this situation Mr. Schwartz is transferred to a job that, after he tries it for a couple of days, is clearly intolerable. Further there is a potential for a significant loss of earnings and a loss of prestige. In such circumstances there is a fundamental breach of the employment contract. It is the redundancy that is the triggering event. It should not be held against Mr. Schwartz that he tried to find other work. The placing of Mr. Schwartz in the Monotube position was the triggering event. Mr. Schwartz is not obligated to remain in a position that was intolerable to him. Thus Counsel for the Ministry submitted it should be found that Mr. Schwartz was constructively dismissed.
22Mr. Schwartz submitted that he felt badly treated by the employer after 16 years of service. He thought he was being polite and kind in giving two weeks notice. Jobs are scarce and he needed recommendations so he acted accordingly. All he wanted was a reasonable job at reasonable pay. To have the potential of such a loss of earnings was not acceptable. Further, the employer had thrown him into a new job without any training, which caused back problems. When he brought this up, the employer did nothing. It was frustrating and it was no wonder he felt he had to leave the employer.
23There is no question that Mr. Schwartz was a valued employee who liked the position of Chem. Lab Technician. Equally it is apparent that the employer wished to retain his services.
24In this instance it is apparent Mr. Schwartz had some real concerns when he was transferred to the Monotube position. However, he did report to work and though expressed some concern about his back, never followed up his concern. Neither did he express any other concerns about the job with the employer From the employer’s point of view it would seem that, at least up to September 11, 2000, Mr. Schwartz had accepted working in the Monotube position. It is quite understandable that a Supervisor might tell Mr. Schwartz that he would get used to the new job. Certainly Mr. Schwartz never followed up with his concerns about his back. This is not to criticize Mr. Schwartz who I found to be a conscientious individual trying to look after his family in a circumstance that must have been difficult. It is completely understandable that he would be upset at the downsizing and concerned for the future. Further, one can understand his feelings that the employer had somehow acted unfairly.
25The difficulty arises as to whether or not on the facts Mr. Schwartz quit or was constructively dismissed.
26In Re Grimsby Packaging Ltd., [1991] O.E.S.A.D. No. 64, Decision No.2881, File No. ESB #074867 of July 23, 1991 (Dissanayake), the referee expressed the view that for there to be a quit, two conditions must apply: (1) there must be a statement or intention to quit or an act clearly manifesting to the employer an intention to quit by the employee and (2) there must be some clear action by the employee indicating that he or she is carrying out that intention. The referee went on to suggest that an adjudicator "should not readily infer an intention to quit except where that is the inevitable and only conclusion to be drawn from the employee's conduct." The notion of a quit is described as follows:
[lin Canadian Labour Arbitration, Second Edition, Brown &
Beatty, at page 513, the authors quote from the case of Anchor Cap & Closure Corp. of Canada, Ltd. (1949) 1 LAC (Finkleman) as follows:
The act of quitting a job has in it a subjective as well as an objective element. An employee who wishes to leave the employ of the Company must first resolve to do so and he must then do something to carry his resolution into effect. That something may consist of notice, as specifically provided for in the Collective Agreement or it may consist of conduct, such as taking another job, inconsistent with his remaining in the employ of the Company. At pp. 4-5.
For an alleged quit to be effective, an employee must express in words or action an intention to quit and then clearly and unequivocally act upon this intention. If there is any uncertainty as to either of these elements, it is the responsibility of the employer to clear it up.
27Further as was stated in Rock Glen Fruit Farms Limited (February 6, 1992 ESB #090811), Referee R. J. Roberts considered the elements that indicate whether a person has “quit” employment, and stated:
For an alleged quit to be effective, an employee must express in works or action an intention to quit and then clearly and unequivocally act upon this intention. If there is any uncertainty as to either of these elements, it is the responsibility of the employer to clear it up.
28In this instance I am drawn to the conclusion that Mr. Schwartz did intend to quit his employment. He worked in the job assigned by the employer until September 11, 2000. On his own admission he thought he had found another job on September 10, 2000. His conversation with Mr. Gautier is clearly one of an employee quitting his job as opposed to indicating a concern with the job he had been transferred into. Moreover Mr. Schwartz signed a letter of resignation, not out of anger, but calmly thinking he had obtained new employment. Mr. Schwartz gave two weeks notice and asked that one week be granted as vacation. He further sought references that were granted. In these circumstances, I must conclude that when Mr. Schwartz spoke to Mr. Gautier he intended to quit as he felt he had obtained another position. In my view Mr. Schwartz acted on this intention clearly and unequivocally.
29Having found that Mr. Schwartz quit his employment there is no need to consider the other arguments in this matter.
DISPOSITION
30I therefore find that Mr. Schwartz’s employment ended on account of his resignation. In the circumstances the appeal is successful and the Order to Pay rescinded. The Director is directed to return all monies held in trust to the employer.
“Timothy W. Sargeant”
for the Board