Canada: If Your Lawyer’s Advice Is To Threaten Your Employer To Get A Severance, Think Twice

Last Updated: August 19 2014
Article by Howard Levitt

Publication: Financial Post

Did you know that in some circumstances your lawyer's advice can get you fired? Many lawyers and employees jockey for position by making extravagant demands in a letter, while still employed. They do so at their peril. While such a letter is meant to strengthen an employee's legal position, it could well be cause for dismissal.

That was the case for Sarah Kucera, who answered an online ad for executive assistant to the president and chief executive of Quilliq Energy Corp. in Nunavat. During the interview process, Kucera was told that the crown corporation was undergoing a restructuring and that her duties could change. Still, she accepted the job and she and her long-time partner quit their positions in Toronto and moved to Iqaluit. She took up her position at QEC in July 2009.

As a result of the restructuring and the change in her boss's position, Kucera had her position downgraded. The downgrade did not, however, result in a pay decrease. The company was happy with her performance and she received a salary increase, took over the role of corporate secretary and was put on QEC's labour negotiating committee.

Yet despite those successes, she experienced workplace stress that took her to the hospital and later a wellness counsellor. The cause of that stress appears to have been her ongoing poor relationship with the director of human resources and her inability to get clear answers on a raise discussed with her boss that was not followed through on as promised. Eventually, she did receive the promised amount.

Several months later, in her personnel file she found email correspondence from the director of HR to the director's direct reports requesting that the requisite increases be made to Kucera's salary "or I will face being shot in the face with 50 of her earrings." These hurtful comments and a strongly worded letter from her boss laying out her duties within the company further hurt and disillusioned Kucera.

When the corporate secretary position was finally posted, Kucera was on vacation and asked for an extension to the deadline so she could apply. However, she eventually decided not to as she was reconsidering her future with QEC.

Conversations with her wellness counsellor show she was considering negotiating a package and had hired a lawyer. While on sick leave in August 2010, she had a lawyer send QEC a letter, alleging she had been constructively dismissed and advising she would remain in her position while negotiations for a severance package were underway. The letter was addressed to the CEO and copied to the board and the provincial minister responsible for the crown corporation.

QEC immediately fired her for cause, claiming the letter was insubordinate and that the relationship of trust had been destroyed.

Kucera's claims of constructive dismissal were based on two things:  A change to her duties and a hostile work environment. The court found that her duties were dependent on those of the CEO so that, to the extent his duties changed, so would hers. It said, "employers must be allowed some flexibility to restructure as circumstances demand without risking a claim of constructive dismissal." As well, the fact she was provided additional duties, indicated her overall status was not reduced and the organization had confidence in her.

As for her conflict with the director of HR making for a hostile environment, that claim was also dismissed. The court found, "a hostile working environment can form the basis of a constructive dismissal claim but to do so, it must go well beyond interpersonal conflict, workplace disagreements or criticism. Where unfriendliness, confrontations between co-workers or some hostility and conflict occurs, it will not be a constructive dismissal."

The loss of her constructive dismissal claim was compounded by the court's reaction to her lawyer's letter. The court agreed with the employer that a lawsuit commencing this way is cause for discharge because it is incompatible with the continuation of the trust required in an employment relationship.

While Kucera did not sue QEC but merely threatened to, the court found that her discontent was well known and the letter was not a legitimate attempt to resolve differences and did not provide the option for her to continue working.

Kucera made it clear she wished to leave and politicized her dispute by copying numerous people to exert pressure on her employer to pay her severance. Given her sensitive position working for the president and CEO with access to confidential information, there was an expectation for a high level of trust and confidence which the letter rendered impractical.

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.

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