Donald Thomas Alonzo Donovan filed an action against his former employer, Richelieu Hardware Inc., in 2020 after his employment was terminated; he had been on an unpaid “furlough” for five months previously.
“What is unique is that he advances two distinct claims against Richelieu,” Justice Raymond T. French of New Brunswick’s appellate court wrote in his reasons in Donovan v. Richelieu Hardware Ltd., 2022 NBCA 45, released Aug. 18.
“He seeks damages for both: (1) wrongful dismissal, arising from his termination on September 2, 2020; and (2) unpaid wages between April and August 2020, on the basis that his ‘lay-off/furlough’ was a breach of his contract of employment that was actionable but did not terminate the contract.”
A motion judge had determined that Donovan was constructively dismissed as of April 1, 2020, (when he was put on “furlough” by his employer), and that he was entitled to 12 months’ pay in lieu of notice from that date, rather than the four weeks’ notice the employer had initially offered.
On appeal, Donovan maintained the motion judge failed to consider his claim for lost wages during the furlough period, and that she erroneously decided he was constructively dismissed as of April 2020, instead of wrongfully dismissed as of September 2020. He also asserted that the judge had failed to address his request for pre-judgment interest.
The appellate court dismissed the appeal except in relation to pre-judgment interest, awarding interest at the rate prescribed by the Rules of Court from November 1, 2020, which is the midpoint between Richelieu’s breach of contract and the end of the 12-month period of reasonable notice.
“In my view, the motion judge’s reasons for decision very clearly indicate she recognized both of Mr. Donovan’s distinct claims,” Justice French wrote, with Justices Kathleen A. Quigg and Charles A. LeBlond in agreement.
“They also reflect her conclusion, correctly so in my opinion, that there was no legal basis upon which to ground Mr. Donovan’s claim for lost wages (after April 1, 2020) in addition to his claim for wrongful dismissal.”
The merits of the appellant’s lost wages claim “were not overlooked or misapprehended,” but were “a central issue at the hearing of his motion for summary judgment, as it was before us,” the appellate court found. “Indeed, the only other substantive issue was the duration of the period of reasonable notice for wrongful dismissal, whether based on actual or constructive dismissal.”
Donovan was not entitled to full compensation from Richelieu Hardware for the five-month period between April and September 2020, the high court agreed, as the purported layoff constituted a constructive dismissal, and his employment was effectively terminated in April 2020.
“[T]he motion judge’s rejection of Mr. Donovan’s claim for lost wages (in addition to a separate claim for damages for wrongful dismissal) recognized the basic legal principle that, as a matter of law, an employee’s entitlement to damages for wrongful dismissal flows from the employer’s failure to provide reasonable advance notice of dismissal,” the court noted.
In response to Richelieu’s decision to lay him off in April 2020, Donovan “was entitled to choose either to: 1) accept this unilateral change to his contract of employment; or 2) treat it as a substantial breach by Richelieu, which he did not accept, and that resulted in his dismissal, that is, a constructive dismissal. In short, Mr. Donovan could pursue one but not both paths. …
“Instead, he claimed wrongful dismissal as of September 2020 and claimed entitlement to unpaid wages after April 2020, as though the original contract of employment continued after the lay-off on its original terms.”
In rejecting the appellant’s assertion that the motion judge “erred because she did not add to the 12-month notice period five additional months to account for the time Mr. Donovan was laid-off,” Justice French noted that “[w]hile the availability of alternate employment, including as impacted by the pandemic, is a factor in a determination of the period of reasonable notice, this was considered by the judge and was a factor in her deciding 12 months was appropriate.”
The appellant had chosen not to quit his job during the layoff, although Richelieu’s decision to lay Donovan off work gave him the option to treat the layoff as a constructive dismissal.
“The determination of the period of reasonable notice must be assessed in light of a variety of factors,” the high court noted. “There is no error in the judge’s determination in this regard. To do as Mr. Donovan now argues would be to compensate for the lay-off under the guise of notice.”
Since the appeal for pre-judgment interest was allowed and success was divided, no order to pay costs was made.
Counsel for the parties were not immediately available for comment.
The appellant was represented by G. Robert Basque of Forbes Roth Basque LLP in Moncton, N.B.
The respondent was represented by Tessa Belliveau of Stewart McKelvey in Moncton.
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