In two recent decisions, the Superior Court ruled that employees who do not contest changes to their working conditions in a timely manner cannot claim that they are victims of constructive dismissal. The Court thus recognized that if substantial changes are made to the essential terms of a contract of employment and the employee concerned disagrees with them, the employee must notify the employer of his or her objections or resign within a reasonable time.
The NOTION of constructive dismissal
Constructive dismissal occurs when an employer unilaterally decides to make substantial changes to the essential terms of an employee's contract of employment without the employee's consent. The courts have held that employees who leave their jobs because they do not agree with such changes are considered to have been dismissed rather than to have resigned. The courts have determined that even though such employees are not formally dismissed by their employers, the situation can be called "constructive dismissal".1 Employees who are constructively dismissed are entitled to compensation in lieu of notice and, where appropriate, damages.
FACTS
In Bergevin v. Gestion Picard, Dubuc inc.,2 Benoît Bergevin had agreed to become the manager of Mr. Picard's pharmacy, and the parties agreed on a new salary structure in 2002. Under the employment contract, compensation and other terms of employment were to be reviewed annually.
In 2004, the employer told Mr. Bergevin that the Pharmaprix group was introducing an evaluation formula to measure the performance of pharmacy managers and was imposing it on all its franchisees. Under the new formula, Mr. Bergevin's bonus would be one-fifth of the amount set out in his employment contract, which represented about 40% of his salary. However, the new evaluation formula would not apply to him until 2006. That year, due to the acquisition of a new pharmacy, the bonus received by Mr. Bergevin under the formula was higher than what he was entitled to under his initial contract. In February 2007, the employer informed him of the bonus amount as calculated under the new formula. This time, the bonus was one-fifth of what Mr. Bergevin had expected. Mr. Bergevin nonetheless continued working until June 18, 2007, at which time he left his job due to illness. He finally tendered his resignation in September 2007.
In Rousseau v. Canada Post,3 Jacques Rousseau joined Canada Post in 1975 as a postal station clerk and subsequently worked his way up the ladder to become a "level A manager" in 2001. In January 2006, Mr. Rousseau was demoted to the position of "level B manager." For Mr. Rousseau, this change included a decrease in employment status, even though his salary was protected for four years and he now benefited from a car allowance.
In July 2007, Mr. Rousseau went on leave for health reasons. During his leave, Mr. Rousseau was notified he was being relocated from the West Island of Montreal to Rosemère, about 70 km from his residence. Unhappy with the transfer, he took early retirement in January 2008 and brought a suit against Canada Post, alleging he had been the victim of constructive dismissal.
The judgments of the superior court
In both cases, the Court concluded that an employee is presumed to have accepted an employer's change to the terms of employment if he or she does not resign, threaten to resign or formally indicate his or her refusal quickly after being informed of the change. Failing this, it will be concluded that there was implicit acceptance of the changes imposed by the employer if the employee continues to work for a few months.
In Bergevin, the judge concluded that the fact that Mr. Bergevin had continued to work for two-and-a-half months and had only resigned after a little more than five months created a strong presumption that he had implicitly agreed to the new terms of employment - even though he had expressed his dissatisfaction - as he had not been explicit enough for the employer to conclude that he had refused the changes.
In Rousseau, the judge felt the employee's demotion was a substantial change to his terms of employment. However, the employee had tacitly accepted the demotion by continuing to work for close to two years until taking early retirement. Mr. Rousseau's subsequent posting to a new workplace that was farther away from his residence was not, in this instance, a substantial change to his terms of employment. He therefore could not use the second reason to argue he had been constructively dismissed.
Conclusion
These decisions reaffirm the principle that employees whose terms of employment are substantially and unilaterally changed must immediately "make their views known" and explicitly demonstrate their opposition to the changes. If they do not, they will be presumed to have accepted the changes and will have no recourse against the employer.
Footnotes
1 Farber v. Royal Trust Co., [1997] 1 S.C.R. 846
2 Bergevin c. Gestion Picard, Dubuc inc., 2011 QCCS 111
3 Rousseau c. Postes Canada, 2011 QCCS 1096
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