HRANB Newsletter

In this edition of The Bench, you’ll be asked to determine the outcome of a fact scenario similar to the unusual case we profiled last month, but with a much different result.

Here are the facts

Huntley Zia (“Zia) was employed by Telus Communications (“Telus”) as a management consultant. Zia had been employed with Telus for approximately 26 years, and was considered a productive and good employee. Zia was relocated to Thailand in 1999 to work on a project to modernize Thailand’s telephone service. Prior to his departure for Thailand, Zia sought a review of his compensation package, demanding a much higher wage due to his “hot skills”. As a result, his base salary was increased by the maximum allowed (20%), his bonus structure was increased, and he was to receive a foreign allowance for his work in Thailand. Zia was notified of these three components of his revised package via e-mail. The foreign allowance was set to $2,250 per month, and was identified as a foreign allowance on his pay stub. Zia had previously received a foreign allowance when he worked in Korea.

Zia completed his work in Thailand in February 2000. However, he continued to receive the $2,250 extra until October 2003, when the company discovered its mistake and ceased payment. Telus conducted a lengthy investigation of the matter. When questioned, Zia maintained that he received the $2,250 as a result of his ‘hot skills” and that the extra amount had always been intended for that. The company, however, viewed Zia’s elevated salary as temporary compensation connected to Zia’s work in Thailand from 1999 and 2000 only.

In December 2004, Telus confirmed their original position, that the extra $2,250.00/month had been ‘foreign allowance’ payments which should have stopped when Zia returned from Thailand. Telus then sought repayment from Zia of $95,625.00, the total amount overpaid. Zia still disputed that he owed anything, and wanted to take the dispute to mediation or arbitration, which Telus rejected. In March 2005, Telus began deducting $2,250.00 from Zia’s monthly pay cheques.

Zia contested the deduction and claimed that he had been underpaid his bonuses in 2003 and 2004. When that didn’t work, and while still an employee of Telus, Zia went to court seeking a declaration that he was entitled to the extra $2,250/month and that did not have to repay it. Telus reacted to Zia’s court action by terminating his employment for just cause on the basis that Zia’s conduct in this matter, culminating with the legal action against it for a declaration, was incompatible with the employment relationship. Zia then changed his court action to a wrongful dismissal suit.

What is your ruling from the bench? Was Zia wrongfully dismissed?

If you ruled that Zia was terminated for cause, you were right. The British Columbia Supreme Court held that under some circumstances dismissal is warranted where an employee has taken legal action against their employer. The Court held that every case requires a consideration of all of the circumstances before a determination of just cause can be made.

The Court held that although Zia had a good and long employment relationship with Telus, this was not enough to overcome Zia’s conduct with regard to the overpayments. Specifically, the Court took issue with the fact that Zia persisted in his position that he was entitled to the overpayments although it was obvious that he knew otherwise, based on the following:

the e-mail identifying his new salary package prior to his departure for Thailand;
his previous experience obtaining foreign allowances; and
the clear identification of the extra money as a ‘foreign allowance’ on his pay stubs.

The Court held that Zia’s conduct in pursuing the overpayment, and maintaining his obviously dishonest position to the point of launching a court action, eroded and poisoned the employment relationship by showing the extent to which he was willing to go to obtain the benefit of Telus’ error.

Taken with last newsletter’s case, you can see how tricky it can be to dismiss for just cause. It requires an objective evaluation of the facts, not necessarily a knee-jerk response. Where an employee has conducted himself or herself in such a way as to erode or undermine the employment relationship, an employer may be entitled to terminate that employee for just cause. However, as the Court stated in Zia v. Telus, each case must be considered on its own facts.

For more information see Zia v. Telus Communications Inc., 2007 BCSC 1426.

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