B.C. operations specialist induced, awarded 12 months of severance

Ferweda v. Mercer Celgar Limited Partnership

In this case, the British Columbia Supreme Court (BCSC) ruled that Gerald Ferweda was induced by Mercer Celgar Limited Partnership (Celgar) to leave the employer he had been with for nearly three decades.

While Ferweda worked for Celgar for less than 2.5 years before being terminated, the court awarded him 12 months of severance pay due to the inducement.

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• Severance pay for short-service employees
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Facts of the case

• In July 1992, Ferweda begins working at the Crofton Mill on Vancouver Island, owned by Catalyst Paper Corporation (Catalyst), as a junior engineer.
• In 2004, Ferweda becomes the operations specialist for the bleach plant at the Crofton Mill. He assumes the same responsibilities for the digester area in 2013.
• In January 2018, Vern Phillips, a recruiter working for Celgar, contacts Ferweda by email regarding a job at their mill in Castlegar.
• Following an email exchange, Ferweda agrees to tour the facility in Castlegar and meet with senior management on Feb. 1, 2018.
• Celgar pays for lunch, dinner, and lodging for Ferweda and his spouse. Following the site visit, Ferweda was reimbursed for all travel expenses incurred.
• On March 13, 2018, Ferweda receives a job offer to work at Celgar’s mill in Castlegar. At that time, he was the only candidate being considered for the operations specialist position.
• Ferweda calls Rick Percy, the manager of Celgar’s mill in Castlegar, and informs him that the offer isn’t sufficient enough for him to leave Catalyst as he prepares for retirement in a couple of years.
• Percy asks Ferweda to call Josh Bellamy, the mill’s production manager, who tells him there might be some flexibility on salary.
• Ferweda receives a revised offer from Celgar. The base salary has been increased to $140,000 from $130,000.
• Ferweda accepts the offer and begins working for Celgar on April 23, 2018.
• In September 2019, Ferweda suffers serious injuries after falling from the roof of the new house that he was building for his family.
• While Ferweda is off work for several months, Celgar trains a younger employee to fill the operations specialist role.
• Ferweda returns to work in February 2020. By the summer, he is close to 100 per cent capacity.
• On Sept. 22, 2020, Celgar fires Ferweda as part of a “downsizing.” He was one of 15 people let go.
• Ferweda files a lawsuit against Celgar—claiming that he didn’t receive proper severance pay given the inducement.
• Celgar argues the compensation provided to Ferweda is fair—adding that he failed to mitigate his losses.

The court’s decision

The BCSC found that the operations specialist “reasonably believed that he was being offered an opportunity to potentially end his career with Celgar, in a position which, although identical to the one he was leaving, offered greater job satisfaction, and considerably better remuneration and benefits.”

Dismissing Celgar’s claim that Ferweda had failed to mitigate his losses, Justice Michael Tammen said the appropriate amount of severance, given the inducement, was 12 months of pay.

LEARN MORE
• Severance Pay Calculator: Properly determine your entitlements
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Lesson for employees

Inducement affects severance entitlements

Ferweda’s situation serves as a reminder to hold off on accepting a severance offer before seeking legal counsel.

If you decide to work for a company that is actively trying to recruit you, and you are fired or let go shortly after making the switch, contact an experienced employment lawyer at Samfiru Tumarkin LLP.

We can confirm that the inducement was properly factored into your severance package and help you secure the compensation you deserve if it wasn’t.

Lesson for employers

Inducement can significantly increase severance liability

If you’re considering hiring an employee who is currently employed in a secure, long-term position, there’s a variety of things you can do to avoid being found to have induced that individual, including:

• Publicly advertising the position
• Interviewing multiple candidates

Before letting an induced employee go, contact a member of our team. We can confirm employment laws aren’t being broken and that the worker’s rights have been appropriately considered.

Other articles to check out

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• Irish nanny avoids wrongful resignation lawsuit in British Columbia
• Okanagan Symphony Orchestra music director claims wrongful dismissal

Workplace issue? Contact our team

Since 2007, the experienced employment law team at Samfiru Tumarkin LLP has helped tens of thousands of non-unionized individuals resolve their workplace issues.

Whether you’re in B.C., Alberta, or Ontario, our lawyers can review your situation, enforce your rights, and ensure that you receive the compensation you deserve.

Disclaimer: The materials provided in this article are for general informational purposes only and DO NOT constitute legal advice. For advice specific to your situation, please consult a legal representative at Samfiru Tumarkin LLP.