BC Supreme Court

Pay Deduction for Wedges Drives One into Employment Relationship

Employers may wish to take note of a recent decision of the BC Supreme Court in which a former employee successfully argued he had been constructively dismissed as a result of his employer’s decision to charge him for future equipment losses.

In Rothberger v. Concord Excavating & Contracting Ltd., the employee worked primarily as an excavator operator. The employee had experienced two equipment breakdowns in which the wedge, a piece of fabricated metal required to keep the excavator bucket in place, had become detached causing the bucket to fall off. Both of these jobs were lost and, the second time, the bucket fell into a ditch causing a longer shutdown as well as costs to replace the lost part.

Following these incidents, the employer informed the employee through a notation on his pay slip that any subsequent loss or damage to the employer’s wedges would be deducted from his income. The employee was concerned about the practice and, after an exchange which included an angry email from his employer, he concluded he could no longer work there and walked off the job site.

The employee argued that the note on his pay slip was a fundamental change to his terms of employment which, together with the employer’s angry email, amounted to his constructive dismissal.

The Court found that the notation on the employee’s paycheck was a material change to his employment contract, stating that, even if the practice was not contrary to the BC Employment Standards Act, the change substantially affected the employee’s rights. The Court  noted in particular that the employee had no knowledge of the scope of the costs the employer intended to charge (for example, the cost of the wedge itself, stalled operation costs, mechanic costs) and this lack of specificity with regard to future deductions could lead a reasonable person to conclude he could be responsible for significant costs in the future.

Employers are reminded to consider compliance with the Employment Standards Act when initiating employee pay deductions. In addition, employers should  turn their minds to whether proposed changes to the employment contract will amount to a unilateral, substantial change, thereby attracting the risk of a constructive dismissal claim.  As demonstrated in this case, the devil is in the details (or lack thereof).

Rothberger v. Concord Excavating & Contracting Ltd., 2015 BCSC 729

Questions relating to the content of the article may be directed to Matthew Cooperwilliams.