In Holmes v Progressive Wellsite Management Ltd., 2023 CarswellAlta 3273 (ABCJ) (Argento J), the Alberta Court of Justice granted reasonable notice for wrongful dismissal despite the existence of a probationary termination clause.
The lawyer for the successful plaintiff employee in this case was Bow River Law Associate Michael Hernandez.
This was an uncontested summary judgment application, but it is important because there are not many cases dealing with conditions that need to be met by an employer in order to enforce a probationary termination clause, and this case illustrates how an employee can challenge them.
This case is currently only available on Westlaw. I can provide a copy of the original decision to any practicing lawyer who wants it that does not have a subscription to Westlaw.
Facts
The following were the facts summarized by the ABCJ:
- The plaintiff employee, Kenneth Holmes was the Vice President of the employer, Progressive Wellsite Management
- Holmes signed an employment agreement containing a “probation” clause which indicated that his employment could be terminated without cause and without compensation for the first 3 months of employment
- Holmes was paid salary for his first week of employment, but not after that
- Holmes was employed there for 2 months
- Holmes was wrongfully dismissed without notice or pay in lieu of notice
- Holmes sued for unpaid wages and wrongful dismissal
- Holmes proceeded with summary judgment in the Alberta Court of Justice
- Progressive Wellsite Management did not file an affidavit in defence of the application
Analysis / Conclusion
The ACJ noted that although summary judgment is not dealt with in the Alberta Court of Justice Act, it is available in the Court of Justice and is used routinely:
[5] The Court of Justice may apply the Alberta Rules of Court where a specific practice or procedure is not otherwise set out in the Court of Justice Act. The summary judgment procedure under Rule 7.3 of the Alberta Rules of Court is regularly applied in this court. In order to grant summary judgment, the Court must be satisfied that it can reach a fair and just determination based on the record before it. As summarized in the case of Weir-Jones Technical Services Incorporated v Purolator Courier Ltd, 2019 ABCA 49 at paragraph 21, the Supreme Court of Canada in Hryniak v Mauldin, 2014 SCC 7, set out a three-part test for when summary judgment is an appropriate procedure. The test is cited as follows and the Court will quote now:
There will be no genuine issue requiring a trial when the Court can reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the Court to make the necessary findings of fact, (2) allows the Court to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.
The ACJ awarded Mr. Holmes $23,692 in unpaid wages for the period he worked but was not paid.
The ACJ then considered the plaintiff’s argument that Progressive Wellsite Management should not be entitled to rely on its probationary termination clause, because it did not evaluate Mr. Holmes’ performance prior to terminating his employment.
The ACJ quoted the following with approval as the law relevant to the plaintiff’s argument:
[15] The Alberta Court of Appeal in Higginson v. Rocky Credit Union Ltd.,1995 ABCA 132, held that:
To establish justification for the dismissal of a probationary employee, the employer need only establish that (1) he had given the probationary employee a reasonable opportunity to demonstrate his suitability for the job; (2) he decided that the employee was not suitable for the job; and (3) that the employer’s decision was based on an honest, fair and reasonable assessment of the suitability of the employee, including not only job skills and performance but character, judgment, compatibility, reliability, and future with the company
The ACJ concluded there was no evidence that the employer met the test that would be required to justify termination of employment without notice during a probationary period, and so was not able to rely on its termination clause.
The plaintiff had as an alternative argument that the employer should not be able to rely on the clause because the employer had itself breached the employment contract by not paying the plaintiff wages while employed. The ACJ decided not to consider this argument because the plaintiff had successfully defeated the probation clause with its other argument.
In the result, the ACJ found that Mr. Holmes was entitled to reasonable notice (severance) for dismissal of 2.5 months.
My Take
My commentary on this case is a bit biased because legal counsel for Mr. Holmes was Michael Hernandez at Bow River Law.
I think the alternative argument of the plaintiff was valid and could have worked to invalidate the clause even if there had been a fair performance evaluation in the probationary period. It is sound reasoning to me that if an employer cannot be bothered to pay its employees, this is a major contractual breach by the employer and the employer should be disentitled from relying on parts of employment contracts that might otherwise benefit them.
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Bow River Law is a team of knowledgeable, skilled and experienced lawyers handling employment law, human rights (discrimination) and labour law matters. Bow River Law is based in Calgary but we are Alberta’s Workforce Lawyers.
