The Ontario Court of Appeal has released its decision in
Chandran v. National Bank, 2012 ONCA 205 upholding the trial
decision. The trial decision is a cautionary tale for
Mr. Chandran was a 18 year employee of the Bank having worked
his way up from account trainee to senior manager. An informal
employee satisfaction survey conducted by a HR manager revealed
that Mr. Chandran engaged in bullying behaviours. Upon reviewing
the results of the survey, Mr. Chandran's boss concluded he
should be removed from supervisory duties. He asked the HR Manager
to identify potential openings to which Mr. Chandran could be
transferred. On Mr. Chandran's return from vacation, his boss
and the HR manager told him about the general allegations, but
refused to provide examples or specifics. Mr. Chandran denied the
allegations. The Bank then issued a final warning letter that
concluded he had engaged in disrespectful treatment of employees
and colleagues contrary to its code of professional conduct and
harassment and discrimination policy. The Bank relieved Mr.
Chandran from his supervisory role and offered two alternate
positions. Both alternate positions were relatively comparable to
the senior manager role, without supervisory responsibilities.
At trial, the Bank maintained it did not have to conduct a
proper investigation, and that it did not have to have cause for
discipline because the two positions were comparable and did not
constitute a demotion and constructive dismissal. Mr. Chandran
argued both jobs were at a lower grade level resulting in lower
compensation and lower prestige and that his trust in the Bank had
been destroyed having not been given a chance to defend himself.
His career path to future promotions had been jeopardized.
The trial judge found in Mr. Chandran's favour. The court
was critical about the lack of proper investigation conducted to
support such serious discipline and harm to a long-term
employee's career. According to the court, a reasonable person
in Mr. Chandran's position would believe his employment future
would be significantly limited and terms and conditions of
employment substantially changed. This constituted a constructive
dismissal. The court further held that, "having been issued
the serious discipline ... and forced to accept either of the
positions which were not equal in terms to the one he held, Mr.
Chandran would have been subjected to 'an atmosphere of
embarrassment or humiliation'".
The Bank also quibbled with Mr. Chandran's actual mitigation
efforts. Although Mr. Chandran secured another management role with
another bank within 14 months, the Bank maintained that he should
have applied to other lower-rated positions open within the Bank
and worked harder to find such a position. The court disagreed. It
found that 18 months constituted reasonable notice but reduced this
to 14 months in light of when Mr. Chandran secured alternate
On appeal, the Bank did not contest the finding of constructive
dismissal, but challenged the trial judge's conclusion that Mr.
Chandran was not required to mitigate his damages by accepting one
of the positions offered by the Bank. In a unanimous decision, the
Court of Appeal found no palpable and overriding error in the trial
judge's conclusion. It similarly found no fault with the trial
judge's decision to increase Mr. Chandran's award of costs
by $20,000 because the Bank had not accepted a reasonable offer to
What are the key takeaways from this decision? There are (at
least) three: (1) a proper investigation with a full opportunity to
respond is essential to support disciplinary action, (2) long-term
employees deserve additional consideration before disciplinary
decisions are made, and (3) demotions are humiliating and
embarrassing even if dressed up as a transfer thus removing any
obligation to mitigate by acceptance.
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