A court ruling ordering severance payments for a laid-off employee of the Aldergrove Duty Free Shop let go during the pandemic-related border closure in 2020 has been upheld by the B.C. Court of appeal.
In a decision released Friday, Jan. 26, a three-justice appeal court panel upheld a lower court decision that found the shop owner wrongfully dismissed then-78-year-old Barbara May MacCallum during the pandemic, and must pay her 10 months salary.
When the land border between Canada and the United States was closed to all non-essential travellers because of the COVID-19 pandemic, the shop, described in the judgment as a “small, family-owned business,” temporarily closed its doors and laid off its employees, without paying MacCallun severance, according to the summary of evidence in the decision.
Reports show while the restrictions at the Aldergrove port of entry were in place, the number of travellers decreased 92 per cent in March 2021, compared to compared to March 2020.
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When MacCallum, an employee since 2010, took the shop to court, it responded by arguing the legal principal of “frustration” applied to the employment contract, which means a contract cannot be enforced when it becomes impossible to perform due to a “supervening event,” one that isn’t the fault of any of the parties, and one that they couldn’t reasonably have predicted.
A B.C. Supreme Court judge rejected that argument, ruling MacCallum had been wrongfully dismissed.
In applying to have the appeal court overturn that decision, the lawyer for the shop argued the “unprecedented and unanticipated border closure” meant the work, described as “retail sales in a tightly regulated duty-free shop exclusive to non-essential travellers” became impossible to perform.
In response, legal counsel for MacCallum said while it “was more difficult or expensive for the appellant to keep the respondent working,” it was not impossible, noting the closure was temporary and the shop re-opened 20 months later.
”Employer difficulty, hardship, or reduced profitability arising from a supervening event do not, standing alone, frustrate a contract.”
In upholding the wrongful dismissal decision, the appeals court agreed with the lower court judge that the “border closure did not alter the nature of the obligations under the [employment] contract.”
Allowing the frustration argument to apply would, “arguably,” mean it could be used “each time a retail operation experiences a substantial, non-fleeting reduction in its customer base due to an event beyond its control,” the appeal court judgment warned.
In dismissing the challenge, the justices also ruled that the severance owing cannot be reduced by the amount of Canada Emergency Response Benefit (CERB) benefits paid MacCallum.
Langley Advance Times has reached out to both sides for comment.
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