The Court of King’s Bench of Alberta recently dealt with a wrongful dismissal case involving a long-term employee who worked for a securities company for over two decades.
The worker had served in multiple roles, including regulatory compliance and corporate governance positions, before her termination in December 2020.
The worker argued she had been continuously employed since 1996 and deserved substantial notice based on her lengthy service, senior age, and managerial responsibilities.
She claimed her employment classification and notice entitlement had been incorrectly assessed, particularly given her integral role in company operations and regulatory compliance requirements.
The employer maintained that the worker’s employment should only be counted from 2018 when a written agreement was signed, arguing that irregular salary payments and periods without wages demonstrated she was merely a casual employee with limited notice entitlements.
Employment classification determines notice entitlements
The worker started employment with the securities company in 1996 as a Registered Representative under the Investment Industry Regulatory Organization of Canada (IIROC).
Throughout her career, she also worked as a compliance officer and corporate secretary.
The company was initially owned by her husband through a holding company until October 2017, when another company purchased shares.
When the employer terminated the worker’s employment in December 2020, she was working part-time three days per week, earning $5,000 per month. The company provided only one month’s salary in lieu of notice.
The worker started a wrongful dismissal claim, seeking summary judgment for substantially more compensation.
In April 2023, an applications judge determined that the worker’s employment had been terminated without cause. This finding was not appealed. However, the critical dispute arose during the September 2023 hearing to determine damages.
The worker argued that her age of 59, length of service spanning 24 years, and managerial position entitled her to reasonable notice at the top end of the allowable range.
The employer argued the worker had only been employed since 2018, when she signed a written employment agreement, claiming that gaps in her employment history contradicted any assertion of continuous employment since 1996.
Casual worker status disputed in appeal
The applications judge explained his decision to award six months’ notice, focusing primarily on irregular salary payments.
He stated the worker “may have been simply a casual employee, who earned modest sums from [the employer] (then owned by her husband via a holding company) from time to time.”
The judge noted concerns about the evidence presented regarding salary history. He wrote: “The plaintiff had the opportunity to submit documentation to establish that she earned regular market-value wages since 1996, but she did not do so. We know she earned no salary in 2016 and 2017. For prior years, she provided a few T-4 slips but redacted the amount of salary earned, as would have been shown on those slips!”
The applications judge concluded the worker should be classified as “a casual part-time employee from time to time back to 1996.” He determined: “in the circumstances, in my view she is entitled to 6 months pay in lieu of notice. Having received one month’s pay, judgment shall be issued to her for 5 months pay at $5,000 per month.”
This classification and the resulting six-month notice period became the central issue in the worker’s appeal to the higher court.
Legal test for employment relationship examined
The appeal court noted that casual employment has no precise definition at common law.
Drawing from established case law, the court explained that casual employees typically work to “meet unforeseen needs,” “meet emergencies,” “replace employees for short periods of absences such as vacation leave, sick leave, training, etc,” or “conduct projects that are anticipated but dependent on the availability of funds.”
A comprehensive definition described a casual employee as “one who works when the employer encounters an unforeseen need for that employee. The casual employee does not, in other words, work at predictable times for predictable durations.”
Additional characteristics included “the absence of a work schedule; no commitment by the employer to offer work or the employee to accept work.”
The appeal court established that determining casual employment status requires a comprehensive analysis of multiple factors. The court stated: “Whether an employee is a casual employee or not is a fact-specific determination that must be made on a case-by-case basis.”
The court outlined ten factors for consideration, emphasising that “no single factor is determinative, and a decision as to whether an employee is a casual employee ought to be based on a weighing of all the relevant factors.”
Regular employment status supported by evidence
The worker had signed written employment agreements in 2018 and 2020 that documented her existing employment relationship. The 2018 Employment Agreement described her role as “Compliance Officer, Corporate Secretary, and Registered Representative as defined by the IIROC.”
The court noted this agreement “did not fundamentally change the duties and responsibilities that [the worker] had been performing for [the employer] throughout her career.”
Under the employment agreements, the worker received an annual salary and comprehensive benefits, including “life insurance, accidental death and dismemberment insurance, and medical and dental coverage.”
The agreements required her to “devote her full time and attention to her duties” at the company.
The court found that “throughout her employment with [the employer], the nature of [the worker’s] duties and responsibilities were integral to the ongoing operation of [the employer].”
Her responsibilities included “overseeing daily operations of the company, setting goals, implementing strategic and compliance plans, human resources functions, acting as a backup to the CFO and CCO, and establishing the corporate governance structure.”
Continuous service record established through testimony
Strong evidence supported continuous employment from 1996. The company’s former CFO, between 2005 and 2020, provided crucial testimony as an independent witness.
The court noted she “confirms, based on her knowledge of human resource and payroll records, that [the worker’s] start date with [the employer] was July 15, 1996.”
The court rejected arguments that missing salary payments indicated employment gaps: “a deferral or waiver of salary is not, by itself, indicative of a termination of an employment relationship when the employee continues to perform the duties and responsibilities of her employment as [the worker] did in this case.”
Regarding the business sale, the court clarified that new ownership doesn’t negate previous service: “When a business is sold as a going concern, credit is given to an employee for his or her years of past service.”
The court also confirmed that regulatory filings consistently showed the worker’s status as a registered representative throughout her tenure.
Notice period calculation addresses all factors
The court addressed part-time status relevance: “Part-time status is not a relevant factor when determining a reasonable notice period.
The impact of part-time status will be reflected in the calculation of damages as the part-time wage will be the basis for calculating the value of the loss over the reasonable notice period.”
Applying established legal factors for determining reasonable notice, the court considered the worker’s lengthy service, advanced age, and managerial position.
However, the notice period was reduced from the potential maximum because the worker had advanced knowledge that her employment wouldn’t continue indefinitely following the business sale.
The court stated: “Based on the evidence, it is clear that [the worker] was aware she would not be in her position with [the employer] indefinitely. Following the sale of the initial stake in [the employer], the purchaser advised both [her husband] and [the worker] that upon completion of the purchase, both of them would be phased out.”
Appeal allowed with increased compensation awarded
The appeal court overturned the application judge’s classification: “When [the worker’s] role at [the employer] is reviewed in light of all the relevant factors, I conclude she was not a casual employee. Her entitlement to reasonable notice of the termination of her employment should not have been predicated on her classification as a casual employee.”
The court awarded 18 months’ notice instead of the original six months: “Considering the relevant [legal factors] and excluding irrelevant considerations such as part-time status, I find that a reasonable notice period for [the worker] is 18 months.”
The final judgment stated: “Given a reasonable notice period of 18 months at a salary of $5,000 per month, [the worker] is entitled to judgment in the amount of $90,000, less the one month of salary paid at the time of termination and minus any additional amounts already paid pursuant to the judgment of the Applications Judge.”
This represented a threefold increase from the original award, demonstrating the importance of proper employment classification when determining notice entitlements.