May 12, 2023
In an article titled “Fired Alberta worker gets 20 months’ salary and commissions”, Carbert Waite LLP partner and Employment Lawyer, Joseph Oppenheim shared his thoughts on recent arbitration where a fired employee was awarded more than $400,000 in wrongful dismissal damages, including more than $120,000 for potential commissions during the lengthy notice period.
In this matter, Schlumberger Canada terminated the worker without cause, citing economic reasons, and provided eight weeks’ pay in lieu of notice. The worker then sued SCL for wrongful dismissal damages, and the court determined that the worker was entitled to 20 months’ reasonable notice.
Joseph notes that the notice award given to an employee in their early 40s who wasn’t in a management position and was terminated, was slightly more than what could be considered normal, even for a long-time employee.
“Generally, courts tend to be a little more conservative than that, but I think what pushed it up in this case was the [economic] downturn,” “The court didn’t seem to state explicitly that it was a big factor – and I’m reading between the lines here – but I think that, given the state of the economy at the time she was let go, that probably pushed it up.”
In addition to the notice award, the court determined that she should receive 50% of the average commissions earned in 2019 and expected to be earned in 2020, which was based on the likelihood of the worker achieving her targets during the notice period. Joseph argues that employment contracts need to be completely unambiguous when they intend to take away or limit common law rights with respect to compensation.
““It’s hard to say exactly what the employer could have done to make [the commission plan] unambiguous, but I would suggest that there needs to be an explicit spelling out that you will not earn any commission [after termination],”
“Courts are loathe to support an employer removing any earned compensation, and if the evidence is that the employee has earned a bunch of money and the only reason it’s being forfeited is because of a technicality of the contract, the court is going to scrutinize that contract.”
To read the article, please visit the Canadian HR Reporter here.