2005 BCSC 64 Fisher v. Lakeland Mills Ltd.

Before: The Honourable Mr. Justice Crawford

Reasons for Judgment

Counsel for Plaintiff	J.W. Craddock
Counsel for Defendant	H.B. Kaun
Date and Place of Trial/Hearing:	August 17-20, 2004
	Prince George, B.C.

Introduction

[1] Kathleen Fisher began working for Lakeland Mills Ltd., August 12, 1985, at age 48, as a switchboard operator/ receptionist. In 1996, with a change in CEOs and less secretarial work, she took on the accounts receivable and accounts payable. Her wages steadily increased and with the other office staff she regularly received an annual bonus which fluctuated according to the company’s fortunes. As well, she did the office janitorial work which in 2003 paid her an additional $1,000 a month.

[2] Lakeland Mills Ltd. (“Lakeland”) manufactures lumber primarily for American export. The Chief Executive Officer is Keith Andersen. On 27 August 2003, after 4 o’clock, when people had left the office, she went and saw Mr. Andersen. She told him she was upset, that she did not know what else to do, that it was not what she wanted but it looked like she would have to retire because she could not do shipping relief.

[3] Mr. Andersen was sympathetic and offered to pay her to the end of the year, some three months and keep her on the company medical. She asked for a letter of reference which he said he would provide. He also said he would provide a one year continuation of the janitorial work she provided for the office.

[4] Shortly after, Ms. Fisher’s solicitor wrote a letter to the company, taking the position that Ms. Fisher had been constructively dismissed. Thus, there are two issues before me, namely, was Kathleen Fisher constructively dismissed, and if so, what damages is she entitled to?

Background

[5] Lakeland Mills Ltd. has been in business for many years. It is a good place to work. There is no retirement age and it is not uncommon for employees of all categories to work past age 60.

[6] Ms. Fisher began working in the front office primarily as switchboard operator/receptionist and also doing office typing.

[7] By 2003, the front office paperwork involved, apart from reception and switchboard work, payroll, shipping, purchasing/ receiving, accounts payable, accounts receivable, contract logging and related tasks. Ms. Fisher did the reception and switchboard work and accounts payable and accounts receivable. Ms. Miller did the shipping, while Ms. Schock did the payroll. Backup for holidays and emergencies was provided by a student, Lisa Stewart.

[8] The office manager/accountant was Annie Horning who also did the contract logging and other tasks.

[9] Ms. Fisher turned 65 in April 2002.

[10] While the office staff only discussed retirement in generalities, the regular visitors to the office, particularly truckers and salesmen, would often speak to Ms. Fisher about her retirement. The inquiries eventually lost their entertainment value and she began to complain to the other ladies in the office about the inquiries. Occasionally, it would get her down and they would console her, saying that any such decision was hers.

[11] However, it affected Ms. Fisher so visibly that Ms. Horning suggested she talk to Mr. Anderson. In April 2003, after 4 p.m., she went and spoke with Mr. Andersen, the company president. Mr. Andersen, who is a kindly and affable gentleman, assured her that there was no concern, and that she could stay with the company as long as she wished.

[12] In late July 2003, the office backup role ended when Ms. Stewart wrote to Ms. Horning advising she was resigning effective August 2003 to take up a new position in a related office. She thanked the company for the excellent experience she had obtained and ended the letter with these words: “I am leaving with a positive feeling about the people with whom I have worked with.”

[13] Ms. Horning prepared a memorandum 28 July 2003, noting: 1) her changing work load; 2) the lack of holiday and emergency coverage without Ms. Stewart and that Ms. Fisher would need to cover Ms. Miller’s job. She noted she was not certain of Ms. Fisher’s capability. She noted there was a new system for shipping being implemented given the additional softwood lumber duties that had been imposed by the United States; and 3) such a position was not full-time though a full-time position could be planned if Ms. Fisher would give a retirement date. The memorandum concluded in this fashion:

We almost need a part-time, possibly flexible, multi-tasking person that is keen enough to learn payroll, shipping, purchasing/ receiving, accounts payable, accounts receivable, contract logging, etc. I am going to talk to my staff to see what responsibilities they could take on full-time but again we will be left with no coverage.

[14] A few days later, Ms. Horning had an informal discussion with the front office staff and she then prepared a further memo of 31 July 2003, which read:

We have come to the conclusion that with utilization of Annette, we can cover off the extra things that Lisa did. I recommend we try this for now and if it becomes unmanageable, we will look at hiring an extra part-time person who is flexible with hours.

[15] What the memorandum did not say was that the backup shipping relief was to be provided by Ms. Fisher and she would need to be trained to do the job. Ms. Miller ordinarily did the job and was entitled to four weeks holiday a year. Ms. Schock, who did the payroll, was not asked to provide shipping backup and as mentioned, Annette McMillan (from the Forestry office) was to do the backup payroll for Ms. Schock.

[16] The lumber shipping work had changed in the sense that the old accounting software had been replaced in large part by the Sinclair shipping software. That meant that the sales engendered by the Sinclair office would have their invoices forwarded to Lakeland. A certain amount of the information as to the buyer, the amount of board feet, the price and type of lumber, and the calculation of anti-dumping duty, countervail duty and exchange had to be entered or provided as well as the mode of shipping be it by truck or railcar. Ordinarily, Ms. Miller worked daily from 7 a.m. until 2 p.m.

[17] Ms. Horning asked Ms. Miller to start training Ms. Fisher on the shipping software program. That training began 12 August 2003.

[18] Ms. Horning also attended to learn how to do the shipping documents. Ms. Miller’s evidence was that the job had been made simpler with the use of the Sinclair system.

[19] However, Ms. Fisher possibly because of a lack of confidence in her computer skills, was not able to pick up the new information or learn the concepts, in spite of Ms. Miller’s teaching and assurances from Ms. Horning and occasional help from Ms. Schock. The following week of 18 August, Ms. Horning went on holiday and Ms. Fisher said that she was to “coast” that week so she could work on what she had learned to date.

[20] On Monday, 25 August 2003, Ms. Horning returned to the office. She spoke with Ms. Miller. Ms. Miller said she did not think Ms. Fisher was picking up the shipping relief work. Ms. Horning then had a brief discussion with Mr. Andersen and indicated that if Ms. Fisher was not able to do the backup shipping duties, then she would need to look at alternatives.

[21] She then met with Ms. Fisher. I think, somewhat to her surprise when she inquired how the relief shipping training was going, Ms. Fisher said it was fine. Ms. Horning then said that the training would continue and continued the discussion with some inquiries as to when Ms. Fisher might retire. She suggested to Ms. Fisher that if it was going to be relatively soon, then the company could muddle along, but if it was going to be more distant, then the company needed to hire a backup employee who would need to pick up some of Ms. Fisher’s duties, perhaps the accounts payable as the new employee could not sit idle.

[22] During this discussion, it was proposed that Ms. Fisher come into work on the morning of 27 August before 9:00 o’clock so that she could do the shipping documents by herself and Ms. Miller could come in at 9:00 o’clock. This would provide an opportunity to see how Ms. Fisher was doing with her training on the relief shipping tasks.

[23] Ms. Horning said that she brought up these other options in trying to allow Ms. Fisher to say she did not want to cover shipping anymore, that it was not going well, but that Ms. Fisher wanted to continue the training, and that she was not having a problem. In terms of retirement date, she spoke in terms of one year or five years.

[24] Ms. Horning agreed she did not tell Ms. Fisher she could go back to doing her old job.

[25] Ms. Miller was then advised the shipping relief training would continue, that Ms. Miller would come in at 9:00 a.m. on Wednesday, 27 August, so that Ms. Fisher could prepare the shipping documents that morning.

[26] However, Ms. Fisher’s assessment of the situation was that she felt she was being given no choice, that either she had to learn the additional duties as backup shipping clerk, or that the company would take steps to hire a new person who would take over part of her work, particularly accounts receivable and accounts payable.

[27] The evening of Tuesday, 26 August, Ms. Fisher met again with Mr. Andersen, the company president. She told Mr. Andersen she was upset and she did not know what else to do, that it was not what she wanted, but that it looked like she would have to retire because she could not do shipping relief.

[28] Mr. Andersen is 60 years old. He has a Bachelor of Commerce from the University of British Columbia, and initially worked with Arthur Andersen & Co. Chartered Accountants. In 1990, he joined Lakeland Mills in Prince George as their President and General Manager. He oversees the operation of the whole mill with five or six managers and superintendents who report to him. He is a general overseer. He deals with outside relations such as banks, legal firms and insurance. The office at Lakeland Mills breaks into two sections: woods management and office administration and accounting. He leaves the operation of the office to Ms. Horning.

[29] He recalled Ms. Fisher came to see him, that she said she was feeling bad and she said, “It looks like I am going to have to retire. I don’t want to.” Mr. Andersen said, in reply, “Whatever you decide, I will pay you until the end of the year.” He spoke to Ms. Fisher about a former senior partner who had waited until he was 82 to retire and found out he could not enjoy his retirement because of his ill health and said it was sensible to retire while still healthy.

[30] On his examination for discovery, at p. 81, question 492:

492Q And Kay told you at this meeting that she didn’t want to retire, right? Do you remember that?

A No, I don’t.

493Q Because I’m advised that she said she didn’t want to retire, but that she felt that she had no choice in the matter. Do you remember that?

A. No.

494Q Possible she said that and you don’t remember it?

A It is possible.

495Q And the reason for this was because Kay felt that Annie Horning wanted to get rid of her. Did she say that?

A She said that she felt that Annie was trying to force her out because she couldn’t do her job.

[31] On his cross-examination, Mr. Andersen agreed that Ms. Fisher came to him and said she told him the reason she was having problems was because of the attempts to get her to do the lumber relief shipping, that she said she could not grasp the concept of it. He agreed she was emotional. He said Ms. Fisher said she did not want to, but it would be better for the company if she retired and that is when he talked her about retiring some time sooner or later.

[32] When asked why he did not directly give her the option of continuing in her old job, he said he never gave it any thought, that he thought she “had retired”. His view was that when someone reaches the point of offering a retirement or wanting to retire at his age, he does not tend to talk people out of it because retirement is something to look forward to.

[33] The following morning, Ms. Fisher attended early to do the relief shipping. There was a difficulty with the shipping documents such that by the time Ms. Miller attended at 9 a.m., she was able to quickly resolve the matter and in fact Ms. Horning and Ms. Fisher together had figured out the problem, that the wrong days orders had been printed. Shortly after that Ms. Fisher attended on Ms. Horning and advised that she was going to retire, that she had in fact spoken to Mr. Andersen the previous evening. This came as a surprise to Ms. Horning, who had not spoken with Mr. Andersen.

[34] Ms. Fisher says she was very stressed and upset, she had difficulty sleeping, her stomach was upset and she had had crying jags and went to see her doctor. She said she was given antidepressants and sleeping pills. However, no medical evidence was provided to me, nor was I given a precise timeline of her difficulties vis-à-vis the events narrated.

[35] Mr. Andersen went away on 4 September 2003 for a holiday. On 5 September 2003, the company advertised for a full-time relief office worker, specifically including computer skills sufficient to do payroll and shipping documentation.

[36] On 16 September, there was a company management meeting in the absence of Mr. Andersen. By that stage, it may be assumed that Ms. Fisher had sought legal advice and to her colleagues she had become withdrawn and uncommunicative.

[37] On Mr. Andersen’s return to the office 22 September 2003, a letter was awaiting him. It had been sent 19 September from Ms. Fisher’s counsel and the first two paragraphs read:

We act on behalf of Kay Fisher in relation to her claim against you for constructive dismissal.

We understand that earlier this year Keith Andersen assured our client, who had just turned 66, that she could work for you as long as she wanted notwith-standing her age. Contrary to this promise in August, 2003 you informed our client that she must add backup lumber shipping to her receptionist and cleaning duties. We understand lumber shipping is a particularly stressful job and for this reason other employees have refused to act as backup shipper. The job is time consuming, involves preparation of bills of lading for all lumber shipped from your mill and calculating countervail and anti-dumping duties. Adding it to our client’s other duties represented a fundamental change in her employment. Our client’s terms of employment did not call upon her to be required to take on the job of backup lumber shipper.

[38] The letter went on to say, inter alia, that Ms. Fisher’s last day of work would be 30 September 2003 and the writer anticipated that Lakeland would not want Ms. Fisher to continue providing janitorial services. Lastly, instructions had been given to initiate proceedings for the wrongful dismissal. Mr. Andersen was invited to contact the solicitor for Ms. Fisher.

[39] On the evening of 22 September, Mr. Andersen attempted to meet with Ms. Fisher, as he wished to talk to her. However, her solicitor had given instructions to Ms. Fisher that no discussion was to take place and none did. Rather, matters ended with Mr. Andersen concluding that Ms. Fisher should take vacation forthwith and her services would conclude at the end of September. By agreement, Lakeland paid three months’ office contract and three months’ janitorial contract into Ms. Fisher’s RRSP.

[40] Ms. Fisher obtained a part-time job selling lottery tickets in January and February of 2004 earning some $495. She advertised cleaning services with no success. She applied for several jobs through the newspaper as a receptionist on three occasions without success, as a customer service representative. She puts her other part-time work at the equivalent of $300 and says she is still actively looking for work.

[41] Human Resources Canada have approved employment benefits, namely, employment insurance.

[42] With respect to health benefits, those ended on termination of employment and her partner, Mr. Yelland, has provided that at a cost of $122.91 a month.

Law of Constructive Dismissal

[43] In Farber v. Royal Trust Co. (1997), 1 S.C.R. 846, the Supreme Court of Canada said at para. 33:

… it has been established in a number of Canadian common law decisions that where an employer unilaterally makes a fundamental or substantial change to an employee’s contract of employment a change that violates the contract’s terms the employer is committing a fundamental breach of the contract that results in its termination and entitles the employee to consider himself or herself constructively dismissed. The employee can then claim damages from the employer in lieu of reasonable notice.

[44] In that case, the regional manager found his position eliminated as part of a corporate restructuring and was offered a branch manager’s position and some financial compensation. However, the regional manager’s position had a guaranteed salary but the branch manager’s salary was based solely on commissions. The court found constructive dismissal in these circumstances.

[45] In Levesque v. Sherwood Credit Union, [2000] S.J. No. 416, 2000 SKQB 286, a senior mortgage collection officer had difficulty adjusting to a new computerized banking system and eventually went on medical leave.

[46] Various discussions eventually resulted in the employee being asked to continue working in the same area with the new system or to find another position within the company. The employee interpreted that as a request for her resignation and resigned. The court found in Ms. Levesque’s favour.

[47] In Wilkinson v. T. Eaton Co., [1992] A.J. No. 328, [1992] A.J. No. 1021 (C.A.), the plaintiff was a long term employee of the defendant. During a corporate reorganization, the plaintiff was asked to add sales duties to her regular employment duties. The plaintiff was shy and had difficulties with people in a selling situation. The court found this was a substantial change in the duties and responsibilities of the employee going to the root of the contract. The Court of Appeal upheld the trial judgment decision in favour of Ms. Wilkinson.

[48] While it began in an innocent fashion, with an informal office discussion, there is no question that the proposal to add relief shipping duties to Ms. Fisher constituted a substantial change in her duties. This involved computer programming with which she was not comfortable and indeed her supervisor, Ms. Horning, expressed doubts before training that Ms. Fisher had the capacity to do the job.

[49] A week of training, or attempted training, reinforced that assessment.

[50] The plaintiff framed the issue in terms of her not having any choice, i.e., that either she was to take on the additional shipping duties, or failing that she could only continue to work if she gave up one of her duties in the accounts payable and provide a retirement date.

[51] I do not find there was any deliberate plan by the defendant designed to force the plaintiff to resign from her employment as a result of the changes in her duties.

[52] Ms. Horning did consult with the staff and felt that Ms. Fisher was the one staff person with sufficient spare time to become a backup for Ms. Miller on the lumber shipping duties. Her reservation was whether Ms. Fisher was capable of performing those duties. As it turned out, Ms. Horning’s reservation was correct.

[53] What Ms. Horning failed to see was the effect the proposed changes had on Ms. Fisher’s sensibilities and her view of her position with the company.

[54] When Ms. Horning returned from her holiday on the 25 August 2003 and discussed with Ms. Fisher her intentions, she properly, as a manager, was seeking to see what the alternatives might be, given the fact that Ms. Miller had already reported to her that Ms. Fisher was not able to “pickup” the lumber shipping programming.

[55] Ms. Horning introduced into the discussion with Ms. Fisher when Ms. Fisher might retire. Whether it was put directly that, in the short term, the company might “muddle through,” or if it was going to be a longer time before Ms. Fisher retired, and therefore a backup employee should be hired with reasonable dispatch, was not well described on either side, but plainly, Ms. Fisher felt that if she did not proceed on with the training, the job she had as switchboard secretary and person responsible for accounts payable and receivable could be affected by the offloading of some of her duties to a new employee.

[56] By 26 August, Ms. Fisher was so affected by her view of the situation that she attended on Mr. Andersen, the president, and announced that she felt she must, while not wanting to, retire.

[57] Mr. Andersen is a good-natured and affable man. Ms. Fisher described him as a gentleman and courteous. But, he did not see the legal problem that faced him. Rather, he simply tried to console his long term employee and suggested her retirement decision was a good one. I do not fault Mr. Anderson one iota, but in terms of the contract law that applies, Ms. Fisher had been faced with unilateral changes of a substantial kind to her employment. She stated that she felt she had been forced to retire and did not want to.

[58] Mr. Andersen did not perceive the possible solution, namely to assure her she could continue in her old position. The next morning, after some difficulties in getting the shipping order sorted out, Ms. Fisher then told Ms. Horning she was retiring, and to keep the retirement confidential.

[59] The letter from Ms. Fisher’s solicitor speaks in terms of the plaintiff being offered no choice. Rather, I think it better described in terms of a unilateral and substantial change being made to Ms. Fisher’s position and a failure to assure her that her old position remained available.

[60] Further, the solicitor’s letter invited further consultation. I can understand Mr. Andersen’s response. He had sat in a conversation with Ms. Fisher where he felt his long term employee had chosen to retire and now he was faced with a letter saying that he had dismissed the employee. Had the letter been worded somewhat more diplomatically, a constructive solution may have been engendered by the parties. However, that has not occurred.

[61] I find that Ms. Fisher was, in the circumstances, constructively dismissed.

[62] What then is she entitled to in terms of reasonable notice?

[63] In Ansari v. British Columbia Hydro and Power Authority, [1986] B.C.L.R. (2d) 33, McEachern C.J.S.C. referred to the principles laid down by McRuer C.J.H.C. in Bardal v. Globe and Mail Ltd. (1960), 24 D.L.R. 140, at 145:

There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.

[64] Ms. Fisher had many years of service with the company, she was 66, and intended to work for some time further. Ms. Fisher did not have management responsibilities but she was the face that greeted visitors to the company and that is always an important position, and there was no criticism of her basic front office capabilities. Further, at her age it is not easy to obtain similar or like employment.

[65] The cases provided to me a range of notice from 6 months to 18 months. In the circumstances of this case, 10 months notice is appropriate.

[66] Damages will therefore include the bonus of $2,000 for 2003, and 10 months of insurance premiums at $122.91.

[67] A claim for additional damages was put forward on the basis of Wallace v. United Grain Growers Ltd. (1997), 3 S.C.R. 701.

[68] There Mr. Wallace obtained assurances of job security when joining the defendant company. From 1972 to 1986, Mr. Wallace was the top salesperson for each year but in 1986 was summarily discharged without explanation. In its defence, the company alleged Mr. Wallace had been dismissed for cause, a position that was maintained until trial. A termination of employment and allegations of cause created emotional difficulties for Mr. Wallace and he was forced to seek psychiatric help. He also went into personal bankruptcy. It was held that bad faith conduct in the manner of dismissal was another factor that could be properly compensated for by an addition to the notice period.

[69] That is not the case before me, where a failure to communicate between a sensitive employee, an office manager seeking to plan ahead, and a kindly company president, unhappily resulted in litigation. But they are not circumstances giving rise to additional damages.

[70] The plaintiff is entitled to her costs at Scale 3.

“R. Crawford, J.”
The Honourable Mr. Justice R. Crawford