Alberta court awards mechanic full severance, CERB not deductible

Oostlander v. Cervus Equipment Corporation

In this case, the Alberta Court of Appeal (ABCA) ruled that Steven Oostlander, a heavy-duty mechanic who was wrongfully dismissed by Cervus Equipment Corporation (Cervus), shouldn’t have the payments he received under the Canada Emergency Response Benefit (CERB) program deducted from his severance entitlements.

As a result, the ABCA found that Oostlander was owed more than $134,000 in compensation.

During deliberations, the British Columbia Court of Appeal’s landmark CERB decision in Yates v. Langley Motor Sport Centre Ltd. compelled the court. In that case, employment lawyer Lior Samfiru at Samfiru Tumarkin LLP secured $25,000 in severance for their client, Shelby Yates, after his team successfully argued that the federal government’s program shouldn’t affect the amount of compensation non-unionized employees are owed when they are wrongfully dismissed.

SEE ALSO
• Paying back CERB: What employees need to know
• Employment lawyer on wrongful dismissals and CERB payments
• Severance pay in Alberta: Employee rights

Facts of the case

• On July 4, 1984, Oostlander started working for Cervus as a heavy-duty mechanic, where he serviced agricultural equipment at the company’s facility in Bassano, Alberta.
• Cervus decided to centralize its equipment servicing in Brooks, which is approximately 50 kilometres (km) away from Bassano, and planned to convert its Bassano location into a retail branch to sell equipment parts.
• Cervus gave Oostlander a working notice in May 2018, informing him in a letter that his employment would be terminated 16 months later on September 11, 2019, when the company planned to close the servicing arm of its Bassano location.
• Before September 11, 2019, Oostlander learned that Cervus had renewed its lease for the Bassano facility for another five years. When he asked for an update on the termination notice he had received, Cervus informed him that he would be “kept on.
• Oostlander worked at the Bassano facility until June 3, 2020, and despite relying on the previous working notice, Cervus informed him that he would be let go one month later.
• On July 3, 2020, Oostlander objected to being fired and sought legal counsel. After receiving a note from his legal team, Cervus offered him a similar position in Brooks.
• Oostlander rejected Cervus’ job offer and filed a wrongful dismissal claim, as he was not interested in commuting approximately 100 km each day.
• The Alberta Court of Queen’s Bench (ABQB) ruled that Cervus wrongfully dismissed Oostlander and awarded him full severance pay and more than $14,000 in vacation pay.
• The court reviewed Oostlander’s CERB payments and decided to deduct the money he received from his final damage award.

The Court’s Decision

The ABCA ruled that Oostlander’s CERB payments shouldn’t affect the more than $134,000 in wrongful dismissal damages he was initially owed.

During deliberations, the court found the B.C. Court of Appeal’s CERB ruling in Yates v. Langley Motor Sport Centre Ltd. compelling and decided to adopt it. It was the first appellate decision that directly addressed whether the program should be deducted from an employee’s severance award for wrongful dismissal.

SEE ALSO
• Should I negotiate my own severance package in Alberta?
• Severance pay in a recession

Duty to Mitigate

While the Alberta Court of Queen’s Bench (ABQB) found Oostlander did reasonably fulfill his duty to mitigate after he was terminated, Cervus argued that the trial judge didn’t apply the “proper legal principles.”

The company claimed that the judge failed to look objectively at the steps Oostlander took to find a new employment and didn’t adequately assess certain evidence.

After reviewing Cervus’ appeal, the ABCA found “no basis to conclude that the trial judge [initially] misapplied the law.”

SEE ALSO
• Keeping track of your job searches after termination
• Can I get severance if I have already found a job?
• Can I get my job back if I am fired?

Compensation incorrectly calculated

Cervus also claimed that the ABQB made two errors when calculating wrongful dismissal damages for Oostlander:

1. The trial judge awarded 25 months’ effective notice rather than 24 (as she appears to have intended)
2. The trial judge calculated Oostlander’s vacation pay based on his 2018 salary instead of his 2019 salary

The ACBA stated that the trial judge clearly intended to award 24 months of severance pay rather than 25 months of compensation.

The court added that the ABQB would have calculated vacation pay based on Oostlander’s 2019 salary “had the oversight been brought to [the trial judge’s] attention.”

To that limited extent, the ACBA allowed Cervus’ appeal regarding the calculation of damages.

LEARN MORE
• Paid enough? How to calculate severance pay
• Rights to severance for provincially regulated employees
• Severance for federally regulated employees

Lessons for employees

• Working notice can’t be vague or fluid: If you’re working in Alberta and your employer provides you with working notice, keep in mind that if they keep you employed past the termination date mentioned in the notice, it won’t be considered valid. The notice must explicitly state the specific end date of your employment without any uncertainty or likelihood of it continuing.
• CERB can’t be deducted from severance pay: If you received CERB payments while the program was in force, these will not affect your severance. CERB, like Employment Insurance, is a matter between employees and the federal government. It doesn’t concern companies.
• Seek legal counsel if you believe you have been wrongfully dismissed: When non-unionized employees in Alberta don’t receive the proper amount of working notice or pay in lieu of notice (severance), it’s very likely that they have been wrongfully dismissed. An experienced Alberta employment lawyer at Samfiru Tumarkin LLP can confirm that you have been wrongfully dismissed, assess your legal options, and help you secure the compensation you deserve.

Lessons for employers

• Consult an employment lawyer before issuing working notice: If employers are considering using working notice in a termination situation, they should contact an experienced employment lawyer at Samfiru Tumarkin LLP to ensure that it is given unequivocally and specifically. The employer can’t allow the employee to work past the date stated for termination, even though it can potentially save the company money by benefiting from the employee’s service during the notice period.
• Consult an employment lawyer before firing staff: Employers in Alberta shouldn’t fire non-unionized workers before speaking with an experienced employment lawyer. Since each situation is unique, a thorough review by our firm will ensure that employment laws aren’t being broken and the employee’s rights have been appropriately considered.

Lost your job? Speak with an employment lawyer

If you are fired or let go for any reason, contact the experienced employment law team at Samfiru Tumarkin LLP.

Our lawyers in Alberta, B.C., and Ontario have helped tens of thousands of non-unionized individuals resolve their workplace issues.

We can review your situation, enforce your rights, and ensure that you receive the compensation you are legally entitled to.