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Vancouver city manager severance debate 2.0

September 23rd, 2015 · 11 Comments

Okay, throwing this out there for debate in the escalating frenzy. A senior lawyer with experience in labour law wrote me the following. You’ll have to take my word for it that this is a senior lawyer and not, say, Mike Magee. But I swear on my book of UBCM resolutions that it is. Based on what he has written, looks like Penny Ballem could actually have tried to argue to get $700,000, not $550,000.

There are a couple of points that need to be made (and aren’t being made) in the public discussion about Penny Ballem’s severance.

First, Ballem’s contract is available on the internet (just search for Penny Ballem employment contract).  No guarantee of authenticity, of course, but it sure looks like the real thing.  It’s dated 2009.  It contains clauses providing for dismissal with and without cause.  The contract very clearly provides that if she is terminated without cause she is entitled to 12 months’ severance plus 2 months for every completed year thereafter. Doing rough math, it’s been six years since 2009, so that makes 12 months on top of the original 12 months.  So it looks like her contractual entitlement was to 24 months.  Certainly it was at least 20 months.  That was the deal she made and the City agreed to when she took the job on.  Frankly, it’s the kind of deal I would tell a client in circumstances similar to Ballem to insist upon, given the risks associated with such a high profile position.  So there’s no surprise here.  It looks like the City is actually paying Ballem less than she is entitled to.

Second, at common law, an employee who is dismissed without cause is entitled to “damages in lieu of notice.”  The amount depends upon things like the responsibilities of the job, the length of service, the age of the employee, and so on.  The senior executive of a billion dollar a year plus organization with thousands of employees etc. etc. who is fired without cause at age 65 or thereabouts would ordinarily be entitled to at least 24 months’ severance.   Certainly more than the 20 months she will be paid.

You might want to argue that Ballem was overpaid while she was city manager, but it looks as though her salary was comparable to other big city managers in Canada.  The real point here is simply that the arrangements for her severance were made when she was hired, they were the basis upon which she agreed to take the job and the City was able to hire her.  So there is no surprise that, having decided to terminate her without good reason, the City is obliged to pay her what they promised six years ago.

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