This was the situation that Timothy Lloyd faced, according to court records. He worked as the City Manager for Imperial Parking in Calgary, reporting to the Vice President of the company. With a starting salary of $50,000 and generous benefits, Lloyd began his employment with high hopes. Unfortunately, according to a 1997 Alberta court decision, Lloyd had the misfortune of working for a rude and abrasive boss. Lloyd’s boss called him vulgar names and threatened to fire him. He refused to let him take his vacation. He repeatedly yelled and screamed at him. After enduring this treatment for fifteen months, Lloyd could no longer take the abuse. He quit his job and sued Imperial Parking.

A former Imperial Parking employee testified at the trial that Lloyd appeared somewhat like an abused spouse. He was made to feel insecure, berated and humiliated. The Alberta Court agreed with Lloyd that this treatment violated a fundamental term of any employment relationship- the right to be treated with civility, decency, respect and dignity. Lloyd was awarded damages of more than $27,000 for constructive dismissal.

Since 1997, Courts of Appeal in Manitoba and Ontario have issued similar decisions, ruling that Canadian employees are entitled to work in an abuse-free workplace. If a workplace becomes intolerable, employees can quit and sue for constructive dismissal. Intolerable conduct clearly includes verbal or physical abuse. According to recent decisions, it can also mean being given unfair job evaluations or being put on probation without any basis.

Despite the increasing willingness of courts to allow these claims, courts have also recognized that employers have the right to discipline their employees for poor performance and to make fair but tough demands. In difficult economic times, there is a great deal of pressure to produce results. Working for a challenging and difficult boss is not a basis for bringing a lawsuit. But when the demands are unfair and the boss becomes abusive – the legal picture changes.

In his 1996 book, Brutal Bosses and Their Prey, professor Harvey Hornstein sought to identify the differences between tough bosses and those who are abusive. Tough bosses set tough goals and consequences for not meeting the standards. Abusive bosses have a different goal. They aim to make life miserable for their subordinates. They humiliate their employees in front of co-workers or customers. They criticize others harshly without any basis. Some accuse their subordinates of dishonesty or disloyalty in an effort to provoke a reaction. Others demand that employees carry out unethical or improper activities, as tests, to see how far the employees are prepared to go.

This type of conduct is not only harmful to the employees who face it but also creates problems for their employers. Workplace abuse creates high turnover rates, productivity problems and higher rates of absenteeism, not to mention increasingly high liability for damage awards in lawsuits.

Years ago, many people would have shrugged their shoulders and advised employees to tolerate the abuse or find a new job. For some today, that is still the right attitude. But things are changing. With developing Canadian case law, courts have shown that they are prepared to sanction employers who tolerate abusive bosses. Many proactive and responsible employers have faced this challenge by developing comprehensive anti-harassment policies, designed to prevent this kind of conduct.

Abusive treatment lawsuits have not been limited to bosses. Abusive co-workers can also create legal liability problems for employers. In 2000, a B.C. Court held that the Marine Pub was liable because it failed to stop its kitchen manager from yelling and swearing at a 13 year Beverage Manager, Susan Morgan. Morgan resigned and sued after almost two years of putting up with abusive treatment. The Marine Pub knew it was going on but failed to stop it. Morgan was awarded 13 months’ pay.

Courts have also recently ruled that extra damages can be awarded for intentional infliction of mental or emotional distress. If en employer’s conduct is outrageous and callous – or even if it is “sarcastic, envious, petty and vindictive,” and is intended to cause harm to an employee, the employer might face an additional award of tort damages. To date these awards have usually been under $25,000 – relatively low, at least by U.S. standards. But Canadian law in this area is continuing to develop and may soon lead to very substantial awards against employers that tolerate abusive bosses.

For employees’ trapped working for an abusive boss, there is no easy legal answer. If the employer has an anti-harassment policy, the policy will usually set the boundaries of acceptable conduct. There may be a confidential investigation and enforcement procedure and the policy may even have some teeth. These policies can benefit the company by limiting liability although, in practice, it can be a very difficult decision for an employee to launch this kind of complaint. Sometimes, it might be easier to try to transfer to a different division or location if that is a possibility

For others, the stress of working in an abusive work situation can create medical problems. Panic attacks, insomnia and other forms of physical illness are common. In these cases, a medical leave may be the best response.

In other scenarios, the only available option is to quit, even without having found another job. Employees who quit a job because of workplace abuse are eligible for Employment Insurance benefits. They may also be able to sue their former employers for constructive dismissal if they can show that their workplace became intolerable. This kind of decision should be made very carefully and usually with professional advice, since the economic impact of leaving a job can be very significant.

—

Ken Krupat practices employment law in Toronto. He represents employees and employers in a wide range of workplace issues.

At the very easy end of the constructive dismissal spectrum are cases where employers unilaterally reduce an employee’s pay, with little or no notice.  Similarly, a significant demotion for an employee, even where the overall compensation is kept intact will usually be grounds for a constructive dismissal claim.  But there are many other cases that are in a much greyer area.  The reduction of some responsibilities, a change in reporting structure and sometimes, a change to the terms of a bonus plan, are all the types of changes that may not lead to clear results.

What about geographic relocation?  Can employees be asked to move as part of their employment?  Intuitively, one might have thought the answer would usually be “no.”  Although this might often be the case, the legal answer can depend on the context and the particular background.  Has the employee moved around before as part of the position?  Is the industry one in which employees are routinely expected to relocate?  Is the employer paying for moving expenses?  Is the employer offering any other alternatives?  These are all factors to consider.

In a recent case, the Alberta Court of Appeal (Robin Brown v. Pronghorn Controls Ltd.) held that a transfer from Red Deer, Alberta to Sedgwick, Alberta, approximately two hours away, was not a constructive dismissal.  The Court held the employee would be a branch manager in both places and would be entitled to the same terms and benefits, despite the disruption to his family life.

The Court of Appeal’s view was probably influenced by the fact that the employee had also refused another alternate position with the company in Red Deer and went on to find new employment, at a higher rate of pay elsewhere, quite quickly.  The Court looked at the background and history of Brown’s employment and applied those facts to conclude that this would have been a reasonable move.  In making its decision, the Court relied on a 1989 decision of the Ontario Court of Appeal (Smith v. Viking Helicopter) in which the Court had held that it was not a constructive dismissal to require an employee to move from Ontario to Quebec in the particular facts of that case.

This recent ruling from Alberta is not necessarily a definitive statement of Canadian law.  Other courts in other jurisdictions across Canada have taken and may well continue to take different approaches.  However, in determining whether a proposed transfer is a constructive dismissal, Canadian courts are likely to look at a number of factors including the following:

1. Is there an employment contract in place?  If so, does it permit the employer to relocate the employee?
2. Has the employee moved for work purposes while working for this employer?  Has the employee moved for professional purposes in the past, with other employers?
3. Is the proposed position equivalent in compensation, benefits and opportunity?
4. Will the employer be paying for all moving costs?
5. Is there a reasonable business purpose to the proposed transfer (i.e. as opposed to some type of vindictive relocation proposal).
6. Is the employer offering an alternative?

These are some of the questions that should be considered carefully when evaluating the likely success of a constructive dismissal claim as a result of a proposed relocation.  The legal answer may not always be as predictable as one might have expected.  Setting up a proper paper trail and asking the right questions can certainly help.  But ultimately, taking the wrong steps can be risky and costly, particularly, as with many other constructive dismissal claims, if there are other reasonable alternatives.

In the latest example, the plaintiff, Meredith Boucher of Windsor, Ontario, was awarded $1.4 million by an Ontario jury.

Ms Boucher had brought a case for constructive dismissal.  She had alleged that she had been forced to leave Walmart after being subjected to sexual harassment and discrimination, intentional infliction of emotional suffering and other misconduct including actual physical assault.

Among other allegations, Ms Boucher had claimed that she was called a “(expletive)” idiot and that she was forced to count skids in front of others to prove that she knew how to count.

The jury of three men and three women took only 2 1/2 hours to make its decision after a two and a half week trial.  Although the jury did not award any damages for sexual harassment or discrimination, it awarded $200,000 for intentional infliction of emotional suffering, $1 million for punitive damages and $10,000 for assault.  The jury also made an award of $250,000 against the assistant manager.

Walmart will certainly appeal and it is likely that the award will be scaled back considerably, given Canadian legal precedents.   However, this type of award and the publicity that it attracts will cause dismissed employees across the country to reconsider their lawsuits and to reevaluate the potential damages that they might receive if they take their cases to trial.

It is worth remembering that these types of awards are only made in cases involving extremely inappropriate conduct. Fortunately, for Canadian employers and employees, these types of allegations are absent in most Canadian wrongful dismissal cases.

In a recent case of the Ontario Superior Court, Chevalier v. Active Tire & Auto Centre, a wrongful dismissal case brought by a 33 year employee was dismissed for failure to return to work.

The plaintiff, Earl Chevalier, a service centre manager with Active Tire, was placed on a lay-off with minimal notice and no compensation.  Mr. Chevalier wasted no time in suing Active Tire for wrongful dismissal two weeks after being dismissed.  He claimed that he could not be “laid-off” with no pay  and that this was a constructive dismissal.  In response to the lawsuit, Active Tire wrote to Mr. Chevalier, apologized and asked him to come back to work.  Mr. Chevalier elected not to return to work and instead proceeded with his law suit.

At trial, the Court agreed that Mr. Chevalier had been constructively dismissed.  Active Tire could not just lay him off with no notice after 33 years.  However, the main issue was whether Mr. Chevalier should have been required to return to work in these circumstances.  He argued that Active Tire had tried to “make his life miserable” in the period leading up to his dismissal and he therefore would have had to return to work in an atmosphere of “hostility, embarrassment or humiliation.”

After reviewing the evidence, the Court rejected Mr. Chevalier’s claims.  It held that a “reasonable person” would have returned to work in all of the circumstances.  Mr. Chevalier was not able to demonstrate to the Court that his workplace had become intolerable and he was therefore required to return.

If Active Tire had not called Mr. Chevalier back to work, the Court ruled that he would have been entitled to 16 months’ compensation – the time period it took Mr. Chevalier to find new employment.  However, the result in this case was that he was not entitled to anything and was required to pay legal fees to Active Tire, as well as his own.

This case is an example of the risky nature of wrongful dismissal litigation.  It illustrates the importance of obtaining proper legal advice and following it.  Under current Canadian case law, employees who are dismissed or laid off off must seriously consider an employer’s offer to return to work, if it is an offer made in good faith.  Important points to consider may be:

• Is the offer to return an offer for the same position that the employee held?
• Will the pay and working condition remain the same?
• Is there significant evidence of conduct that is embarrassing or humiliating?
• Does the employee have other employment possibilities?

Dismissed employees should carefully review all of these issues, as well as other related matters, with competent employment law counsel.  Making the wrong decision can be costly and harsh.

The plaintiff, Sandra Trites, was a Division Controller for the defendant Renin Corporation.  She had been with the company for more than 6 years.    The defendant was undergoing financial difficulties.  It gave more than 50 employees lay off notices with varying recall dates.  In Trites’ case, it gave her a notice recalling her to work some seven and a half months after the start of her “layoff.”   Renin was asked to sign a consent agreeing to her “layoff” status in return for which Renin indicated that it would continue certain of her employment benefits.

The main argument was over whether an employee could claim that she was constructively dismissed if she was put on a layoff as contemplated in the Employment Standards Act, 2000 (“ESA”).  The judge wrote ” [i]n my view, there is no room remaining at law for a common law claim for a finding of constructive dismissal in circumstances where a temporary layoff has been rolled out in accordance with the terms of the Act.”  However, here the Court held that Renin had not put Trites on a proper layoff.  It had not continued her benefits or otherwise complied with the Act.  Trites was awarded wrongful dismissal damages of 33 weeks’ pay, which was equivalent to the time she was out of work.

It does not seem that there would have been any significant reason for Ms Trites to appeal the decision since she was awarded damages that apparently compensated her for the time she was out of work.  From the perspective of a judicial precedent, the case is ultimately an example of an employer being ordered to pay an employee wrongful dismissal damages after trying to play around with layoff rules unsuccessfully.

Employers who wish to ensure that there is no doubt about their ability to rely on the ESA lay off provisions can include clauses in their employment agreements stating the employer has the right to lay the employee off provided that it complies with the ESA.  If an employer uses this language and then puts employees on a proper lay off, there will be little that the employees can do until the lay off period expires.

F’or employees, if they are working in a workplace situation that does not seem to contemplate a “lay-off” as a term of employment, but the employees are placed on a lay-off anyways, they may still be able to claim constructive and/or wrongful dismissal.

Like the situation before the Trites v. Renin Corp. decision, these cases will often depend on the facts of the particular case including the type of workplace, the work history and whether the employer, in purporting to lay off employees, complies meticulously with the requirements of the ESA.  Many, like Renin Corp., do not.

Yohann Johnson, a black man, was a production supervisor with General Motors (GM).  According to the evidence, he had worked for GM, without incident, for almost eight years.   In early 2005, Johnson became responsible for training group leaders in a GM body plant.  An individual who was supposed to be trained by Johnson failed to show up for his training session.  The individual, Alex Markov,  claimed that he was uncomfortable with Johnson because of a remark that Johnson had made to him in the past, regarding Markov’s brother, who had been murdered.  Apparently, Markov’s brother had been killed by a black man.  Johnson understood that Markov was refusing to train with him because Johnson was black.  Markov was permitted by GM, initially, to train with another trainer instead of Johnson.

Johnson filed a complaint with GM alleging that Markov had refused to undergo training with him because he was black.  GM investigated these complaints.  Markov was initially told that he would have to train with Johnson or he would be forced to leave GM.  Apparently, with union involvement, GM agreed that Markov could be relieved of his group leader responsibilities so that he would not have to train with Johnson.  Shortly afterwards, Markov was working in the body shop, performing group leader functions, but GM claimed that this was only a temporary fill-in for another employee.  Markov was suspended for breaching the agreement but he filed a grievance and wound up overturning the suspension.   Johnson viewed this as evidence that GM was not prepared to enforce a deal that was agreed upon, to address Johnson’s concerns of racism.

Johnson ultimately went off on a stress leave that he claimed had come about as a result of workplace racism and the treatment of him.  He sued for constructive dismissal.  He alleged that GM had created a poisoned work atmosphere that tolerated racism at the workplace.

At trial, an Ontario Superior Court Judge, Alfred Stong J., accepted Johnson’s allegations.  The court held GM had “traded away Johnson’s human rights as a bargaining chip” and had created a poisoned workplace for Johnson.  The trial court awarded Johnson damages of more than $150,000 including constructive dismissal damages and other “Wallace” damages for bad faith conduct.  The court held that the evidence had shown that Johnson “satisfied the burden of proof placed on him of proving that he was constructively dismissed from his employment with GM.”

The Ontario Court of Appeal unanimously reversed the decision in its entirety.  It held that the trial judge’s findings should be overturned because they were “wrong, unreasonable or unsupported by the evidence.”  The Court of Appeal held that the foundational finding of racism was “unreasonable and unsupported by the evidence.”  The court noted that there had been no direct evidence of racism by anyone at GM.  The trial court’s conclusion was based on inconsistent statements that Markov had made, leading to a finding that he was lying.  Moreover,  the trial court based its decision on information provided by another employee, effectively “hearsay evidence.”  The Court of Appeal held that, on a proper evidentiary record, it was unreasonable for the trial court to make a funding that Markov’s refusal to train with Johnson was “solely racially based.”  The finding of constructive dismissal was overturned.

The Court of Appeal went on to state that the plaintiff bears the onus of establishing a poisoned workplace in a constructive dismissal case.  It is up to the plaintiff to demonstrate that “the objective reasonable bystander would support the conclusion that a poisoned workplace environment had been created.”  Further, the court stated that “except for particularly egregious, stand-alone incidents, a poisoned workplace is not created, as a matter of law, unless serious wrongful behaviour sufficient to create a hostile or intolerable work environment is persistent or repeated.”

The Court of Appeal rejected the argument that the refusal by one employee on one occasion,  to train with another employee, for racially motivated reasons, would have been enough to establish a poisoned workplace due to racism.  The court held that there was no evidence of systemic or institutional racist behaviour.  It noted that this was one incident over the course of an eight year working relationship and it was addressed, to the satisfaction of Johnson, initially.

Although the trial judge had put together a list of 8 factors that the judge felt established a constructive dismissal, the Court of Appeal rejected each of these factors, as improperly drawn conclusions, factual findings made without a proper evidentiary basis, or for other reasons, finding that the judge’s holdings were a “fundamental misapprehension of the evidence.”

The Court of Appeal was satisfied by GM’s evidence of numerous investigations, the steps it took to deal with the situation and its offers to Johnson to have him working in locations in which he would not have contact with Markov.  The Court of Appeal held that there was no evidence that any conduct on GM’s part signified an intention to “repudiate its contact of employment” with Johnson.  In fact, the Court of Appeal had this to say about the trial decision:

“The trial judge appears to have concluded that GM repudiated Johnson’s employment contract by failing to provide him with a discrimination free employment environment.  With respect, this misconceives GM’s obligations in the circumstances.”  The Court of Appeal, went on to add “GM, however, was not obligated to immunize Johnson from any future contact with Markov or any other body shop employees.”  The Court of Appeal rejected the trial court’s findings that there had been at least one threat made, indirectly, against Johnson.

The Ontario Court of  Appeal decision is an unusual example of a case in which an appellate court will delve into the trial record and overturn various factual findings and conclusions made by the trial court judge.  This is quite rare.  The standard is a very high one for this type of review and appellate courts are not usually interested in “retrying the case.”  Here, however, the Court of Appeal was obviously persuaded that the trial court judge’s conclusions were so unfounded that it felt it was warranted to review all of the findings.

The Court of Appeal’s decision also establishes that claims of a poisoned work atmosphere due to racism will be required to meet a high threshold.  Evidence of one encounter or incident, unless it is particularly “egregious” will not be sufficient to enable an employee to resign and sue for constructive dismissal.

It remains to be seen whether Johnson will file a Request for Leave to Appeal to the Supreme Court of Canada or how this decision will otherwise be applied if Johnson does not.  It is important to note that the case was all based on one incident where one employee had refused to train with another, without any direct evidence that this refusal was racially motivated.  That is to say, this case is certainly not dismissive of poisoned work environment claims based on racism.  However, the Court of Appeal has indicated that it will require a high standard, of explicit, direct incidents of racism in order to uphold a claim of constructive dismissal.

The difficulty with this approach is that many incidents of racism are more subtle and are not nearly as explicit as the standard that the Court of Appeal seems to require.   However, these incidents may still cause significant and far-reaching damage to the victim.  The Court of Appeal recognized that Johnson “believed that he had been a victim of racism in his workplace.”  But it concluded that this was not a “work environment poisoned by racism.”

This past week, the Ontario Court of Appeal upheld the trial court decision and dismissed the appeal in Chevalier v. Active Tire & Auto Centre.

The Ontario Court of Appeal acknowledged that the plaintiff had been wrongfully dismissed when he was improperly put on a “lay-off.”  The  lay off came about after the employer tried to performance manage the employee before it put him on lay-off.

The plaintiff sued right away for constructive dismissal after being put on lay off.   Right after he began his lawsuit, the employer recalled him to work.  He refused to return and took the case to trial, arguing that the workplace had become “poisoned.”

However, at trial, the Ontario Superior Court held that there was no “demeaning, objectionable or retributory conduct” by the employer and that the constructively dismissed employee should have returned to work.

The Ontario Court of Appeal has upheld this decision.  In doing so, it has reinforced the idea that when an employer tries to implement a performance improvement plan, this will not necessarily create a poisoned work atmosphere.  But more importantly, the Court of Appeal has reinforced the Supreme Court of Canada jurisprudence in Evans v. Teamsters Local Union 31 which states that wrongfully dismissed employees may be required to return to work if recalled by their employers.  This can apply even after the employee files a lawsuit.  Failing to return to work can lead to a finding of “failure to mitigate damages.”  The dismissed employee can lose the case completely in these circumstances.

Dismissed employees who are recalled to work will need to consider the recall notice very carefully.  Continuing on with a lawsuit after an employer purports to call the employee back to work can be risky and ultimately, very costly.

Employees are often tempted to leave with an exclamation mark.  This can be motivated by a desire to get even or get revenge for unfair treatment.  It may be a letter circulated to the entire company and its customers, a harsh letter sent to the boss or a posting on social media.  I have seen many situations where these actions come back to haunt the employees.  While this is not to say that these actions are never a good idea, they are often more trouble than they are worth.  This post looks at some of the issues you should consider when quitting a job – from an employment law perspective.

First, a recent example of an “I quit” video by Marina Shifrin:

As you may know by now, this video, at the item of writing of this blog, has had more than 8 million hits on YouTube.  From a Canadian employment law perspective, the video is really not that bad.  Ms Shifrin mentions that she was employed at a great place.  She avoids slandering her past employer.  And ultimately, she probably helps get them lots of publicity.  She may well have generated job offers for herself in the process – and probably a variety of personal offers as well.  Sure there are some vindictive employers out there who might try to bring some kind of lawsuit in a response to a video like this, but that would probably not be the best corporate marketing strategy.

Here, the company recognized that the video might be more helpful than harmful.  So, it produced its own response, which it is also using to recruit new employees, sending the message that it is a fun place to work.  The company’s responding video does not slander the departing employee – and in fact wishes her well:

As much fun as these videos might be, not everyone is about to make an “I quit!” video or other production.  Most people would probably get themselves into quite a bit of trouble trying to do it properly and safely.

Whether you are thinking of making a video or not, here are some legal issues to consider when quitting a job in Canada:

1.  Unpaid Bonuses:  If you are with a company that has a bonus plan in place, you may not be eligible for the bonus (even an accrued portion of it) unless you are working at the time the bonuses are paid.  Some employees have received a great new employment offer  and cannot wait around with the old company to collect the bonus.  If this is the case, you may want to ask the new employer for a signing bonus to compensate for the amounts you are losing.  You might also want to check your employment contract and see whether you will be disqualified from the bonus if you leave before bonus time.

2.  Restrictive Covenants:  If you have an employment contract in place (which can even be an offer letter, from when you started or some later point in time), you may want to get that reviewed carefully by an employment lawyer before agreeing to go and work for a competitor. There may be steps you can take to minimize the potential difficulties.  The covenants may not even be enforceable.  If they are, or even if they might be, you may be able to get an indemnity for any legal fees and costs from the new employer.  But you should deal with this issue properly before accepting the new position.

3.  E.I. Eligibility:  If you are quitting and you do not have a job lined up, you may not be eligible for Employment Insurance benefits unless you can prove that you were forced to quit (or left with no choice).  Make sure you have a plan lined up for how you intend to support yourself.

4.  Constructive Dismissal:  If you believe that you have been forced to quit, either as a result of a reduction in pay, a demotion or a poisoned work environment, this is probably something that you should mention in a resignation letter.  It can harm a constructive dismissal case where an employee sends a glowing resignation letter about how wonderful everyone has been in the workplace and then tries to allege “poisoned work environment.”  If you are considering a constructive dismissal claim, you should probably get legal advice before you quit.

5.  References:  Employees quitting a job are often concerned about potential references.  If you have been severely mistreated and have a legitimate constructive dismissal claim, it may be more important to take actions that support the claim than to worry about the reference from this particular employer.  In fact, negotiating a mutually agreeable reference may ultimately be part of the claim.  But in most other cases, leaving employment in a classy way will help ensure a decent reference from your former employer.  You may even be able to get some helpful, written reference letters on your way out the door or some assurances that people will respond favourably when called.

6.  Company Property:  In most cases, employees are required to return all company property including computers, cell phones, vehicles and documentation in hard and soft copy form.  There have been cases where employees have downloaded company documentation and information to local drives or even personal devices before leaving their employment.  This can provide the basis for a lawsuit to be brought by the company you.  Not a good idea!

7. New Employment Contract:  If you are going to be accepting employment with a new employer, it goes without saying that you should ensure that you have received and accepted a signed offer of employment before submitting a resignation letter.  You should consider having this new employment offer reviewed by a qualified employment lawyer.  There may be clauses in the agreement that affect your future severance or your future ability to work elsewhere. There may be other clauses that have a major impact on your legal rights.  Don’t assume that you are simply being given a “standard offer” and that is is “non-negotiable.”  This is rarely true.

8.  It’s a Small World:  In most industries, the world is a lot smaller than we might think.  Word gets around about actions that people take, especially if the actions are inappropriate.  In the vast majority of cases, it is best to leave in style, with a classy, professional note to the employer.  Who knows, you may find yourself working with, or even for, some of these people a lot sooner than you might have expected.

In a recent Ontario Superior Court decision, Jodoin v. Nissan Canada Inc. a former employee of Nissan Canada was awarded more than $100,000 in wrongful dismissal damages as a result of a successful claim for constructive dismissal.

Harry Jodoin had been working for Nissan for more than 10 years.  Just before his demotion, he was a Senior Manager in charge of retail sales and sponsorships.  He controlled a budget of more than $30 Million.

In December 2010, Mr. Jodoin was told that he was being moved into the role of Senior Manager of Vehicle Preparation Programme.  There was no job description for this position.  No employees would report to Mr. Jodoin.  There was no private office, no budget and no long term goals in place.  In fact, Mr. Jodoin was initially moved from an office into a cubicle in a high traffic area with little privacy.

The court accepted all of this evidence and concluded that Mr. Jodoin had been constructively dismissed by Nissan.  In coming to this conclusion, the court held that since Mr. Jodoin had been demoted, he was not required to continue to remain in the position (as a way of “mitigating his damages.”).  The court noted that Mr. Jodoin continued to work for about a month and a half before taking the position that he had been constructively dismissed.  However, the court concluded that this was a reasonable time period.

The court awarded Mr. Jodoin damages for the full time that he was out of work, which in this case amounted to approximately 9 months.  The damages included compensation for base salary, benefits, the company vehicle, the incentive plan and the RRSP plan.  This all added up to more than $100,000 plus interest and legal costs.

This case demonstrates that constructive dismissal law suits are still alive and well in Ontario.  However, an employee bringing this type of claim will need to demonstrate an objectively clear demotion or a significant reduction in pay.  Job changes that do not amount to a demotion may not be sufficient.  Fortunately for Mr. Jodoin, he was able to convince the court that a reasonable, objective person would agree that he had been demoted.  Many employees who allege constructive dismissal are not as fortunate.

Bringing this type of lawsuit in the wrong circumstances can be a very costly mistake.  It can be come even less worthwhile if the dismissed employee is able to find new employment quickly.  Nevertheless, employees who are out of work for some significant time period may find it quite worthwhile to proceed with this type of claim.

In the case of Hooge v. Gillwood Remanufacturing Inc., the plaintiff was a 36 year employee, working as a production supervisor at the time of dismissal.  He was put on a “lay off” by his employer without any advance notice or pay.  The defendant company claimed that it had the right to “lay off” the employee under the B.C. Employment Standards Act.  The plaintiff alleged that he had been dismissed and sued for wrongful dismissal.  One week after he filed his lawsuit, the employer purported to “recall” him back to work.

At trial, the B.C. Supreme Court held that the employee had in fact been constructively dismissed. The plaintiff had not had a written employment contract in place.  When he was put on a lay off, he was told that it was “indefinite” and that there were no plans to recall him.  He was given an ROE that said “shortage of work.”  The B.C. court agreed with the plaintiff that there was no term of his employment that would have permitted a “lay off” without pay after all of these years of employment.  He was, in fact, constructively dismissed and was entitled to eighteen months’ compensation.

However, the Court proceeded to look at the issue of mitigation.  “The law is clear that in certain circumstances an employee who declines an offer of re-employment from the same employer after having been dismissed, whether actually or constructively, may be found to failed to mitigate his damages, and have any award reduced on account of such failure to mitigate.”  As long as it would have been “reasonable” in all of the circumstances for the plaintiff to return to work, he or she may be obligated to do so.  The court discussed Evans. v. Teamsters Local Union No. 31  as well as other B.C. cases including Davies v. Fraser Collection Services Ltd. 2008 B.C.S.C. 942 and Besse v. Dr. A.S. Machner Inc. 2009 BCSC 1216.

Ultimately, the court concluded that the evidence did not establish acrimony, mistreatment, belittling, embarrassing actions or undermining of authority in the workplace.  The court concluded that the plaintiff should have returned to the same position, on the same terms and conditions, at the same rate of pay.  Here is the court’s reasoning:

“It seems to me that an employer who has laid-off an employee, or wrongfully terminated an employee without due notice, may very well come to the conclusion, particularly with the benefit of legal advice that its actions constituted a wrongful dismissal and may seek to mitigate its own exposure to the payment of damages by offering to re-hire the employee.”

Here, the court held that the plaintiff should have returned to work.

Fortunately, in this case, all was not lost for the plaintiff.  The defendant locked out its unionized employees and ceased operations approximately seven months after purporting to recall the plaintiff.  The court held that the plaintiff would not have been paid during the lock-out, so he would not have been able to mitigate his damages during that time period.  Nevertheless, he was docked 7 1/2 months’ pay for the time period during which he would have been able to work if he had returned to work when recalled.

This case, from a B.C. perspective, reinforces the interpretation of Evans that has become the law across Canada.  Employees who are fired, laid-off or otherwise dismissed – and then offered a return to work – even after they file a lawsuit, must be very careful in deciding how to answer the employer’s offer.  Refusing to return to work and then continuing a lawsuit can be very costly.

There is something to be said for the notion that employers might have made a mistake and should be entitled to reverse a decision and have an employee come back to work.  After all, in the unionized context, an employee can be reinstated.

However, more often than not, this type of case will simply be used by a range of employers looking to play games.  Employers can try to “lay off” employees without offering anything.  Then, if the employee sues, they can “recall” the employee.  This gives employers a way to try firing someone while minimizing the risk of owing any severance.  It seems to open up the door to all kinds of abuses by the types of employers that might choose to act unethically.  Certainly, there are situations in which employers may have a good faith “change of heart” or are otherwise justified in changing their minds and reversing a decision to dismiss an employee.

But that does not necessarily seem to be the case in many of the situations I see.  This line of case law creates uncertainty, economic and emotional stress for employees, and also makes it difficult to settle some cases reasonably, both from an employee and employer perspective.  Nevertheless, employees who ignore these decisions may be making a very costly mistake.