The BC Court of Appeal has upheld a decision of the BC Supreme Court on the Employment Termination Standards Regulation for public sector employees which requires repayment of severance if an employee re-employed in the public sector.
The issue in Butcher v. The Queen was the application of the Employment Termination Standards Regulation to the contract of a school superintendent.
The Regulation provides that if a public sector employee is terminated and provided with severance in lieu of a notice period, and subsequently commences employment with another public sector employer, the individual must “pay the government any amount that is attributable to the period during which the employee is re-employed.”
The Regulation came into effect May 1, 1997 and applied to contracts “commenced, changed or renewed” after that date. The Superintendent entered into a term contract with a BC School District prior to that date. However, the contract contained a renewal provision that extended the contract automatically unless the Board advised the Superintendent that it did not wish to renew or extend the contract by a specified date during the term of the contract. The contract was automatically extended on a number of occasions after 1997 pursuant to the renewal provision.
The Superintendent’s employment with the School District ended in January 2001 and he received a severance package. He was subsequently hired by another School District in the Province.
The Government claimed that the Superintendent was obliged to repay a portion of his severance under the Employment Termination Standards Regulation. The Superintendent claimed that his contract was not subject to the Regulation as it had not been “renewed” after the Regulation came into effect.
The Court of Appeal upheld the decision of the BC Supreme Court, and concluded that the contract was not subject to the Regulation, as the extension of the contract was simply an application of the terms of the contract and could not be characterized as a “renewal.”
(click here for full text of the judgment)