The BC Court of Appeal recently found that an employee who accepted new employment while on administrative leave terminated her employment relationship with the leave granting employer.
The employee held a senior academic appointment as university librarian at the University of British Columbia. Two years into her six-year appointment, UBC informed her that it wished to negotiate the termination of her employment. The parties entered into a settlement agreement governing her departure. They agreed that she would take eight weeks of vacation followed by 16 months of earned administrative leave. At the conclusion of the leave, the employee was to receive a combination of lump-sum severance and salary continuance, following which her employment would end.
During the period of administrative leave, the employee accepted full time employment elsewhere. When UBC learned of this, it claimed that she had repudiated the settlement agreement, thus ending her employment and relieving UBC of any further obligations to her.
The Court of Appeal confirmed that during her administrative leave, the employee was bound by obligations to UBC, including a duty to avoid conflicts of interest. Her decision to accept new employment amounted to a repudiation of the settlement agreement and a breach of her duty to avoid a conflict of interest. As a result, UBC was entitled to treat its obligations under the settlement agreement as at an end.
(Click here for copy of Decision)