Falkenberg v. Stephen Avenue Securities Inc., 2025 ABKB 485 is a recent case of the Alberta Court of King’s Bench that dealt primarily with the issue of whether an employee’s employment status was casual or not.
A Court of King’s Bench Applications Judge had found the employment status of the employee was casual, which resulted in her getting 6 months severance pay (reasonable notice), which was less than she would have received if she had been classed as a regular employee. The employee appealed that decision to a Court of King’s Bench Justice.
Justice Armstrong overturned the decision of the Applications Judge. Although the Appellant had earned only modest sums from her employer and had waived her entitlement to salary on several occasions, the ABKB did not consider her to be a casual employee.
This case is important because there are not many cases considering the question of when someone is a casual employee and what effect that has on their legal rights.
This case is a win for employees.
Facts
The following were some of the pertinent facts summarized by the ABKB:
- Colleen Falkenberg, the appellant employee (the “Appellant”), first began her employment with Stephen Avenue Securities, the Respondent employer (the “Respondent”) in 1996. However, whether the Appellant was a casual or permanent employee, and whether this employment was continuous, was disputed.
- Stephen Avenue Securities was initially owned by the Appellant’s husband through his holding company and was purchased by Gathering Waters Ltd. (GWL) in 2018. GWL became the Appellant’s employer.
- The Appellant did not enter into a written agreement with the Respondent until 2018 (the 2018 Employment Agreement), which was executed in relation to the purchase of the Respondent by GWL.
- The Appellant and the Respondent subsequently executed another employment agreement in 2020 (the 2020 Employment Agreement).
- There was not much evidence regarding the Appellant’s earnings over the years, but it was established that she had waived her entitlement to a salary in 2016 and 2017. In 2017, the Appellant accepted artwork in lieu of salary.
- Throughout her employment, the Appellant was the sole employee of the Respondent registered with the Investment Industry Regulatory Organization of Canada (IIROC).
- At the time of her termination in December of 2020, the Appellant was working part-time (three days per week) and earning a salary of $5,000 per month.
Analysis / Conclusion
Was the Appellant a Casual Employee?
The Court noted that the Applications Judge failed to define what a casual employee is, but appeared to have based his findings on the fact that the Appellant earned “modest sums from the respondent’”, that she “had completely waived salary on occasion” and that she “earned no salary in 2016 and 2017”.
The Court began its analysis by summarizing the analysis which must be undertaken when determining whether an employee is a casual employee or not:
[15] Whether an employee is a casual employee or not is a fact specific determination that must be made on a case-by-case basis. A non-exhaustive list of the factors that should be considered when making the determination include:
- Whether there is a written employment contract and the terms of any employment contract, whether in writing or not.
- The existence or absence of a regular work schedule – for example does the employee only work on a sporadic as needed or on-call basis or does the employee have regular hours and expectations to meet.
- The existence or absence of a pattern of work over time.
- The nature of the employee’s duties and responsibilities.
- How the employee is paid, including whether the employee is enrolled in any company benefit plans.
- Whether the employee can refuse work.
- The degree of integration of the employee into the workplace.
- The expectations of the parties involved in the employment relationship.
- Any relevant regulatory issues and tax treatment.
- Any other factors that the judge may consider relevant to the question of whether the employee is a casual employee.
[16] No single factor is determinative, and a decision as to whether an employee is a casual employee ought to be based on a weighing of all the relevant factors. In the present case, the Applications Judge erred in finding that Ms. Falkenberg was a casual employee based only on the fact that she failed to establish that she earned regular market-wages since 1996 and earned no salary in 2016. While a salary that fluctuates may be one indicator of casual employment, it is not, in and of itself determinative. The Applications Judge did not appear to turn his mind to any of the other relevant factors relating to Ms. Falkenberg’s employment when he classified her as a casual employee for the period 1996 to 2018.
In arguing that the Appellant did not become a full employee until 2018, the Respondent emphasized the fact that no written agreement existed between the parties until 2018. In rejecting this argument, the Court found that neither the 2018 Employment Agreement nor the 2020 Employment Agreement represented a material change in the nature of the Appellant’s roles and responsibilities. Rather, these agreements simply reduced into writing the existing relationship between the Respondent and the Appellant.
The Court also examined the written terms of these agreements, finding that they were inconsistent with casual employment. In particular, the Court found that the Appellant was paid an annual salary, was enrolled in the company benefit plan, and was required to devote her full time and attention to the duties of employment. In the Court’s view, these terms were not indicative of the type of periodic, transactional work typical for a casual employee.
The Court went on to consider the scope of the Appellant’s duties, finding that they were inconsistent with casual employment. In particular, the Court found that her duties went beyond meeting unforeseen needs or emergencies or completing defined projects – instead, the Appellant was integral to the day-to-day operation of the Respondent and engaged in high-level decision making on its behalf, including goal setting, setting corporate strategy, and governance.
With regard to the issue of the Appellant’s inconsistent remuneration, the Court accepted her evidence that she was working for her husband and as such, was willing to waive her salary when the financial condition of the Respondent was poor.
Finally, the Court noted that the Appellant was the sole employee registered to submit mandatory annual findings with the IIROC, finding that this responsibility was not consistent with the role of a casual employee.
What is the Appropriate Notice Period?
Having found that the Appellant was not a casual employee, the Court turned to the issue of her reasonable notice entitlement.
The main dispute between the parties with respect to the issue of reasonable notice was the length of time the Appellant’s worked there – the “duration of employment”.
The Respondent argued that she had only been employed since 2018, when the parties entered into the 2018 Employment Agreement. In support of this argument, the Respondent maintained that the fact that she did not receive a salary in 2016 is consistent with a break in employment.
Much of the evidence relating to the continuity of the Appellant’s employment was delivered by the Respondent’s former Chief Financial Officer, Ms. Karen O’Connor.
Ms. O’Connor confirmed that based on her knowledge of human resources and payroll records, the Appellant’s employment began on June 15, 1996. Ms. O’Conner also explained the reasons why the Appellant may have deferred her salary in years where the financial health of the Respondent was poor, and how the artwork given to her in lieu of salary in 2017 was reflected in the Respondent’s financial statements.
In rejecting the Respondent’s arguments, the Court noted that a deferral or waiver of salary is not, by itself, indicative of the termination of an employment relationship when the employee continues to perform the duties and responsibilities of employment.
The Court overturned some of the reasoning used by the Trial Judge related to the impact of part-time status in a wrongful dismissal, noting that the reasonable notice period would not be affected by part-time status:
[40] The Applications Judge determined that Ms. Falkenberg was entitled to 6 months of notice based on her status as a casual, part-time employee. Part time status is not a relevant factor when determining a reasonable notice period. The impact of part-time status will be reflected in the calculation of damages as the part-time wage will be the basis for calculating the value of the loss over the reasonable notice period. Part-time status is not a factor that will lead to a reduction in an applicable notice period. […]
Further, the Court concluded that, while the Appellant had been made aware that she would be phased out of employment in the future, these discussions did not amount to actual notice of termination. However, the Court did accept that the Appellant’s awareness of her eventual termination distinguished her circumstances from those of other plaintiffs with long tenures, who would have reasonably expected continued employment for an indefinite time.
Considering the relevant Bardal factors and excluding irrelevant considerations such as the appellant’s part-time status, the Court found that 18 months was an appropriate reasonable notice period to base the severance pay on.
My Take
Given the facts in this case, I am not surprised that the Court came to the finding that the Appellant was not a casual employee. While there was mixed evidence regarding her pay, the evidence was clear that the Appellant performed work for the Respondent consistently since 1996, and much of this work was strategic and high-level in character.
This case is a win for employees, as the Court’s application of a fact-specific balancing exercise leaves greater room for unconventional working arrangements to still be deemed non-casual.
The Appellant’s working conditions in this case were certainly unconventional, given that she had waived her entitlement to salary on at least two occasions, and accepted artwork in lieu of payment on one occasion. This arrangement was informed by the fact that her husband was previously the owner of the Respondent, and thus it was in her ultimate interest to waive her salary in times when the Respondent was in financial trouble. The Court’s broad and fact-specific analysis allowed it to take these factors into consideration – had it focused its analysis on the narrow issue of the Appellant’s remuneration, the Application Judge’s finding would have likely been upheld.
I am also not surprised that the Court found that the Appellant’s employment was continuous, given the cogent evidence indicating that she carried out her duties continuously since 1996.
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