Relocation costs for dismissed can add up

Have you ever been relocated for work, only to find your job duties changed post-move? Or are you a business owner overseeing employee relocations or contemplating a merger?

Here are some take-aways for you.

Karen Robinson began her career with Heinz Canada in November 1999 as Supervisor of Accounts Payable. Over the following years, she received a series of promotions. By 2013, Robinson was an experienced manager in the dual roles of Manager, Leamington Accounting and Supply Chain — Finance.

In June 2013, Heinz Canada’s U.S. parent was acquired by new owners. It was subsequently announced that the facility at which Robinson worked in Leamington, Ont., would close.

The day following the announcement, Robinson was asked if she was prepared to continue working, at the company’s headquarters in Toronto as Senior Manager of Accounting.

A longtime resident of southwestern Ontario with deep roots in the area, Robinson accepted the position after considerable reflection. A key factor was that the move presented the opportunity for significant career growth.

Approximately one year after she transferred to Toronto, Heinz Foods merged with Kraft Foods, and the two enterprises integrated operations.

This resulted in a series of unilateral changes to Robinson’s employment, including losing responsibility for payroll, which she had performed for more than 10 years. Robinson was excluded from any discussions regarding these changes, which she viewed as a demotion.

In response to these changes, Robinson resigned and sued Heinz for constructive dismissal. She sold her home in Mississauga and immediately returned to southwestern Ontario, where she secured re-employment.

The court sided with Robinson, holding that a reasonable person in her position would have considered the employer to have unilaterally changed the terms of the employment contract. Robinson was awarded 15 months’ severance.

Robinson also sought compensation for mitigation expenses totalling $45,010.32. These included expenses on the sale of her home in Mississauga ($34,010.32), expenses on the purchase of a home in southwestern Ontario ($3,500), and moving and transitional expenses ($7,500).

The court considered all of Robinson’s mitigation expenses to be reasonable, noting that she had relocated at the employer’s request and had deep roots in southwestern Ontario, such that her return was foreseeable.

One might ask why she was paid her mitigation expenses to move back to southwestern Ontario when it would have been easier for her to find a comparable job in Toronto where she had been working. One might also wonder why her expenses of moving were not offset by the significant capital gains Robinson made from the appreciation of her house in the Toronto area, which she sold to move. Take-aways for employers: Always remember that your business could be liable for the relocation costs of dismissed employees. This is particularly important for businesses that are highly specialized or located in small markets, as former employees are more likely to have to relocate to find work.

When mergers result in changes to employee jobs, be sure to provide impacted employees with notice of these changes. Ideally, consult with them as well. In Robinson’s case, the changes were unilateral and sudden. Take-aways for employees: Keep every invoice, receipt and document relating to your post-termination job search. These can add up to large awards for mitigation expenses.

Always document your concerns regarding unilateral job changes by the employer. For Robinson, the allegation of the job changes being unilateral was largely accepted because of the existing contemporaneous emails.