- with readers working within the Business & Consumer Services, Healthcare and Retail & Leisure industries
In Adrain v. Agricom International Inc., 2025 BCSC 1842, the Supreme Court of British Columbia (the "Court") made it clear that employees who sue for wrongful dismissal while still working during their notice period – after receiving notice that their job will end but before their employment actually ends – risk repudiating their employment contract. If an employer accepts such a repudiation, it can significantly reduce the notice or damages the employee may be entitled to, even if the employee is entitled to more notice than the employer provided.
Background
The employee worked for 30 years at Agricom International Inc. (the "employer"). By 2019, due to industry challenges, the employer reduced its workforce to just two people: the employee and the company's president and founder.
In April 2025, the president announced plans to retire and either sell the business to the employee or wind down operations. The employee declined to buy the company but was willing to help with the transition, provided she received clear severance terms. Through her lawyer, she sent a letter requesting confirmation that she would receive a severance package equivalent to 24 months' pay (about $200,0000), should her employment end. When the employer did not respond, the employee followed up via email. The president then responded with a letter on the employer's letterhead, reiterating the offer to transfer the business and providing written "working notice" that the employee's employment would end in 13 months' time, on May 31, 2026.
The employee believed this 13-month's notice was inadequate given her tenure and age. Her lawyer sent a second demand letter, reiterating her claim for 24 months' pay as severance and warning that she may pursue legal action if her demands were not met. When the deadline for a response passed, the employee commenced a wrongful dismissal lawsuit – alleging she was terminated without sufficient notice or just cause – even though she was still employed and working through her notice period. The employer was served with her claim in mid-May 2025, about half a month delivering the written notice of termination.
About a month later, the president terminated the employee's employment effective immediately, writing, in a hand-delivered letter, on the basis that by sending demand letters and initiating a wrongful dismissal lawsuit against her employer while still employed, the employee had repudiated her employment contract and the employer had just cause to dismiss her. Nonetheless, the employer continued to pay her salary and benefits for about three more months on a without prejudice basis.
The Parties' Positions at Trial
At trial, the primary issues were (i) whether the employer had just cause to terminate the employee's employment, (ii) whether her actions amounted to a repudiation of her employment contract, (iii) what length of reasonable notice she was entitled to, and (iv) how much compensation she should be entitled to. The Court also considered whether the plaintiff's damages should be reduced because she did not make sufficient efforts to find new employment (pursuant to her duty to mitigate), and to account for the possibility that she might find another job before the end of the notice period (a "contingency reduction").
The Court's Analysis
The Court first considered whether the employee's actions – having her lawyer send demand letters and initiating a lawsuit while still employed – amounted to just cause for dismissal. The judge explained that just cause is a high standard: it requires serious misconduct that undermines the employment relationship. After reviewing similar cases, the Court found that simply asserting one's legal rights, especially in a respectful and businesslike manner, does not automatically justify terminating someone for just cause. In this case, the employee's conduct was seen as a legitimate attempt to negotiate her severance, not a fundamental breach of trust. Because the Court found the employer did not have just cause, it did not need to decide whether the employer had condoned the employee's conduct.
The Court next addressed the employer's argument that the employee repudiated her employment contract by suing for wrongful dismissal while still working during her notice period. In British Columbia, the law is clear: if an employee files a wrongful dismissal claim before their employment officially ends – and the employer has not already breached the contract – it will be considered repudiation. Since the employer had not breached the contract and the employee was not constructively dismissed, her decision to sue meant she had repudiated her employment agreement.
Both sides agreed that, based on the employee's age, long service, and position, she was entitled to 24 months' notice. However, because she repudiated her contract by suing 1.5 months into the 13-month notice period the employer had provided, the Court ruled she could only claim damages for the difference between the 24 months' notice awarded and the notice period she was provided by the employer (i.e. both the notice period she actually worked and the notice period she failed to work due to her repudiation of her employment contract). The Court found that, although the employee did not ask the president for help finding a new job, she made reasonable efforts to secure new employment on her own, so her damages were not reduced for failure to mitigate. The Court also applied a one-month reduction to account for the possibility that she might find a new job before the end of the notice period. The employee was not awarded damages for any lost bonuses, as these were found to be discretionary and not a guaranteed part of her compensation; however, she was entitled to reimbursement for her cell phone expenses during the compensable period.
Significance for Employers
This case highlights that employees can assert their legal rights – such as sending demand letters or starting a lawsuit – without automatically giving their employer just cause for dismissal. It should be noted, however, that this does not give an employee a blanket immunity – there are situations where suing one's employer while still employed will give the employer the right to terminate the employment relationship for just cause.
On the other hand, if an employee sues for wrongful dismissal while still working during their notice period, the employer may treat it as a repudiation of the employment contract, which will affect the employee's entitlement to notice, or pay in lieu, beyond the repudiation. Employers must still ensure the original notice period provided to the employee is reasonable, however, as providing notice that is less than the employee's entitlement at common law can result in damages.
To view the original article click here
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
