Canada: Are There New Evidenciary Rules In Quebec For Proving Constructive Dismissal?

Last Updated: October 3 2012
Article by Théodore Goloff


Farber vs. Compagnie Royal Trust, [1997] 1 S.C.R. 846, requires that for a change in working conditions be considered constructive dismissal, the element changed must be "substantive". Clearly, substantiveness must have an objective dimension. An ex-employee Plaintiff seeking to characterise an ostensible resignation as the result of a constructive dismissal must convince the Court that the condition of employment allegedly unilaterally and illegally changed by the employer was substantive enough to warrant a conclusion of almost frustration of contract. In St-Hilaire vs. Nexxlink, 2012 QCCA 1513, Quebec's highest court seems to have suggested new evidentiary considerations to be taken account of.


Plaintiff, as a condition of coming aboard as a Senior Vice-President of the company that ultimately acquired Nexxlink Inc., had negotiated a stock option plan which at the time of his ultimate separation of employment might have accounted for $40,000 to $50,000, a sum recognized by the Court as certainly "not negligible". Indeed, the Court of Appeal recognized that when dealing with a public company in full expansion mode, such as was the case with Nexxlink, in the information technology sector, holding stock purchase options may rightly constitute a reasonable expectation of significant economic gains for senior executives.

Several years after joining the Company, Nexxlink was bought by a subsidiary of Bell Canada. A reorganisation of responsibilities followed. An announcement that the share options purchase plan and the share options that St-Hilaire held were to be cancelled, ostensibly as a result of the acquisition followed as well. Six (6) weeks after the "closing", Plaintiff resigned, alleging constructive dismissal essentially because of a series of reorganization of responsibilities. Apparently, it was only at the time of the service of his attorneys' letter of demand that the issue of the cancellation of the share option plan and share options were raised as an issue.

Plaintiff sued seeking some $500,000 plus compensation for what he claimed was a "constructive dismissal". Having lost in first instance, Plaintiff sought reversal on several grounds.

The Appellate Decision

St-Hilaire first alleged that the Superior Court had wrongly taken account of evidence that showed that although there had been a redistribution of types of clients that were to be served by him, in fact, had he stayed on, this might well have led to a net increase or at least an equalisation of revenues to him. St-Hilaire argued that pursuant to Farber,above, the only pertinent factual elements to take into account were those that actually existed at the time or which a reasonable person finding themselves in the same situation might expect. This ground was dismissed by the Court of Appeal in view of the testimony of the employer's President regarding representations that he had made to St-Hilaire prior to his resignation to the effect that sales and service to large enterprises would be maintained and that the acquisition of Nexxlink by Bell represented real net opportunities for him. As a follow-up, the same Company President had represented that St-Hilaire's role, responsibilities, remuneration, benefits and client accounts would remain unchanged, notwithstanding acquisition by Bell.

The Appelate Court posited that the Trial Judge could not use the fact that no drastic change in the type of clientele dealt with by St-Hilaire prior to the takeover had, in fact taken place. Only the reasonable expectation of what might transpire, viewed at the time of St-Hilaire's departure could , in its view, be taken account of.

Nevertheless, in the Court of Appeal's view, the Trial Judge committed no error in determining that the evidence supported a finding that the acquiring company "Bell PME", "did not exclude in fact the possibility that St-Hilaire would continue to treat with large enterprises major accounts". "Bell PME n'exclut pas dans les faits la possibilité de transiger avec de grandes entreprises comptes majeurs"

The Court of Appeal need not have gone to such lengths to dismiss that ground of appeal in the undersigned's view. Cory J. in City (Toronto) Board of Education vs. O.S.S.T.F. District, 15, [1997] 1 SCR 487, clearly established that "subsequent event evidence" can be properly considered if it helps to shed light on the reasonableness and appropriateness of the action taken, that is the subject of the inquiry, even though such action was taken some time in the past. In the practitioner's view, the foreseeability or of unforeseeability of a set of circumstances, is one but not the only element to take account of to gage the reasonableness and the appropriateness of the action taken. If, as in the Board of Education Case, a letter written by the employee several months after termination was deemed not only pertinent but indeed essential to determining the reasonableness of the employer's action terminating the grievor's employ taken several months before, should not the same rules apply herein by analogy to determine how to properly characterize Plaintiff's resignation – voluntary quit or constructive dismissal? What's sauce for the goose is sauce for the gander! Indeed, the Toronto Board of Education case Cory J. relied upon Cie Minière Québec Cartier vs. Quebec (Grievances Arbitrator), [1995] 2 S.C.R. 1095 as authority for that finding. It was precisely that case that Gonthier J. referred to in Farber when he wrote:

"[42] ...Thus what is relevant is what was known by the Appellant at the time of the offer and what ought to have been foreseen by a reasonable person in the same situation. Evidence of events that occurred ex post facto achieved subsequent to the offer could reasonably have been foreseen at the time of the offer."

Interestingly, while Toronto (City) Board of Education supra (i) was decided a month prior to Farber, (ii) saw Gonthier J. as a member of the Court that decided that case, and the author of Farber, no mention is made of that case in Farber – only the reference to Cie Québec Cartier Minière. If Cory J.'s decision is the logical and necessary extension of Québec Cartier, one is left to wonder why no mention is made of Toronto Board of Education in Farber?

The Court of Appeal also found that:

  1. While there was substantive changes in job content, same did not exceed the latitude that the employer's rights of management were covered;
  2. If colleagues were prior, to the takeover, in positions parallel to St-Hilaire, hierarchically speaking, but post-closing were carrying out some of his work, this was as a result of the new employer's exercising management rights to reorganize work assignments and "promoting" those colleagues rather than demoting St-Hilaire. Those grounds failed as well;
  3. On the other hand, with respect to the cancellation of the share option purchase plan and the shares options themselves, the Court ruled that while there was a unilateral change in a substantive and substantial working condition - indeed, a working condition that was a key reason for plaintiff's joining the employer - since the letter of resignation, did not raise same as one of the causes or the causa causans, as it were, of the alleged constructive dismissal, it could not be relied upon to change an apparent voluntary resignation to one where changes in working conditions amounted to frustration of contract or it civil law equivalent.

What We Should All Learn From the Case

The take aways from this case are three fold:

  1. In cases of mergers and acquisitions, not all changes in job content or responsibilities satisfy the Farber test of substantiality. As in the earlier decision in Lemieux vs. Marsh Canada Ltée, the Quebec Court of Appeal demonstrated some recognition that mergers acquisitions and rationalizations inevitably lead to some legitimate, necessary and expected reorganisation in work responsibilities. How they can best be characterised whether as a demotion as St-Hilaire would have it or as a promotion of colleagues as the employer argued is critical to the analysis;
  2. The factual frame of reference for the Court analysis is the period contemporaneous with the resignation. Post resignation facts cannot be used to colour the file. Quaere whether the more recent judgments of the Supreme Court in the Toronto (City) Board of Education, supra or in Cabiakman v. Industrial Alliance Life Insurance Co., [2004] 3 S.C.R. 195, neither of which judgment was referred to by the Court of Appeal, would allow for a more flexible application of the rule then was seen in this case;

Indeed, in that latter case, again relying on Quebec Cartier held:

"[67]...Facts subsequent to the employer's decision may be admissible in evidence, however, if they are relevant and if, they can be used to determine whether the employer's decision was justified at the time it was made."

  1. The manner in which the resignation letter is phrased and what elements are or not raised therein, is not only critical. They are make or break elements of the case;

It is, in any case, noteworthy, given the pace at which some technology giants acquire both start-ups and substantial mid-sized enterprises, that the Court of Appeal recognized that acquisition/amalgamation inevitably brings with it reorganisation as a consequence of management rights is and should not, almost by reflex trigger claims of constructive dismissal. Such an attitude is certainly to be welcomed by the business and management labour bars.

The author has been named a Fellow of The College of Labor and Employment Lawyers

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions