Legal News

BC Supreme Court: employee entitled to severance as regular employee where employer failed to provide express notice of probation extension

The defendant employer hired the plaintiff employee as an Engagement Manager. The terms of the employment contract were contained in two letters, one of which provided for a probation period of three months. The employer had some concerns about the plaintiff’s performance during the first three months of her employment and decided to extend her probation by one month. Written notice of the one month extension was provided to the employee.

During that month, the parties discussed the possibility of the plaintiff working in another capacity. The employer gave the defendant a new form of contract, but no agreement was reached. Approximately three weeks after the expiry of the extended probationary period, the employer dismissed the plaintiff.

The employment contract provided that after completing probation, an employee with less than three years of service would be entitled to four months’ notice or four months’ base salary in lieu of notice. The plaintiff sued for damages for wrongful dismissal, claiming four months’ salary, plus vacation pay, bonuses and the cost of her medical insurance premiums for four months.

The central question before the court was whether the plaintiff was a regular employee at the time she was dismissed. Under the terms of the contract, the plaintiff would achieve regular status if she completed her probation before being terminated. The court found that the plaintiff had acquiesced to the one month extension for which notice was properly provided. However, no notice of a further extension was given.

The employer argued that the plaintiff knew she would remain on probation while a new contract was negotiated. The court determined that the evidence did not support this argument, and concluded that the plaintiff was entitled to four months’ base salary because she was a regular employee at the time she was dismissed. However, the plaintiff’s claim for lost bonuses, vacation pay and health benefits was dismissed as the contract simply provided for a fixed period of notice or pay in lieu.

Schwartz v. Selkirk Financial, 2004 BCSC 712, January 14, 2004