DISCIPLINE AND TERMINATION OF EMPLOYMENT - Resignation - Elements

Appeal by Avalon from judgment in favour of Evans in his wrongful dismissal action. Evans cross-appealed from the lack of an award for moral and punitive damages in the judgment. Evans worked for Avalon, a car dealership, from 1997 to July 2010. He was the commercial fleet manager responsible for dealing with commercial customers, reporting to Lester, the General Sales Manager, and Wilkins, the owner. Evans was also responsible for the oversight of the sales desk at the dealership premises. Evans was discovered to have made an inventory control error that delayed a payment to Avalon for a vehicle that was modified prior to delivery to a customer. A tense meeting took place involving Evans, Wilkins and Lester, during which Evans suffered a stress reaction. He went home early, but returned to work later that evening. He handed his keys over to Lester and said he was “done”, despite Lester’s efforts to calm him down. Lester informed Wilkins that Evans had resigned. Evans subsequently tried to call Wilkins, but his calls went unanswered. When they met four days later, Wilkins was harsh in criticizing Evans for deserting the dealership when it was busy and short-handed. Evans sought emotional support and presented a note from his doctor in support of a stress leave. Wilkins tore up the note and told Evans to leave. Evans’ final compensation was limited to his vacation pay and an incentive bonus owing to him due to a previous miscalculation. At trial of Evans’ wrongful dismissal and breach of contract action, the judge found that Evans’ resignation was neither voluntary nor equivocal, and that Avalon breached its duty of good faith and fair dealings in failing to give Evans time to cool off and reconsider, failing to make further enquiries and act with consideration in response to the resignation. Alternatively, Avalon’s actions showed a careless disregard for Evans, breaching an implied term of their contract. The judge awarded Evans damages for wrongful dismissal based on a salary that was reduced from what he had earned previously as commercial fleet manager given that, had he resumed work at Avalon, his duties would have been modified based on his medical condition. The judge found that Evans was entitled to compensation for lost short-term disability benefits resulting from the manner in which Avalon completed the supporting forms. She relied on the past practices of the parties in finding that Evans was entitled to an incentive bonus paid for a May 2010 sales program.

HELD: Appeal and cross-appeal dismissed. The judge did not err in finding that it was not reasonable for Avalon to conclude that Evans had resigned after the meeting and after suffering his stress attack. Given Evans’ 15 years of service, his request for disability leave and Avalon’s failure to inquire further into what Evans meant when he handed in his keys, Avalon wrongfully dismissed Evans in an unduly insensitive manner. The judge was entitled to find that Avalon’s actions prevented Evans from receiving short-term disability benefits and that Avalon was obliged to pay Evans the bonuses he had earned in the May incentive program. Her calculation of damages in lieu of notice was reasonable, given that Evans would have returned to Avalon on modified duties based on his medical condition and was not entitled to receive pay commensurate with what he earned before the stress attack. Grounds did not exist for an award of punitive damages. The awards Evans received in relation to lost disability benefits and pay in lieu of notice were adequate compensation, such that an award for moral damages was not required.

Evans v. Avalon Ford Sales (1996) Ltd., [2017] N.J. No. 41, Newfoundland and Labrador Supreme Court - Court of Appeal, M. Rowe, C.W. White and M.F. Harrington JJ.A., February 2, 2017. Digest No. 3644-007