When one hears "constructive dismissal", one typically
thinks of situations such as reducing an employee's salary or
benefits or taking away an employee's job responsibilities. In
Damaso v. PSI Peripheral Solutions Inc. (PSI) 2013 ONSC
6923, the Ontario Superior Court of Justice expanded this list
to include adding to an employee's workload.
Otoneil Damaso began his employment with PSI in 1999 as a Field
Service Technician and Computer Technician. At that time, PSI's
business focused on computerized high-speed envelope printing.
Between 1999 and 2005, Damaso's position focused on servicing
and repairing the printers.
In 2005, PSI's business changed and expanded to include an
Automated Division which included new software for which Damaso was
made responsible for supporting.
In early 2009, PSI made Damaso its IT Administrator and its
"project champion" for yet another new company software
system. In addition to these new responsibilities, Damaso continued
to perform some software support work in the Automated
In early 2010, Damaso asked PSI for a pay raise in light of his
new functions for the company. He also raised concerns with his
workload and tried to negotiate reductions to his responsibilities.
Neither issue was resolved.
The issues came to a head in early 2011 when PSI advised Damaso
that it would not be increasing his pay, that his workload was not
excessive, and that his new job responsibilities were a natural
extension to his original position with the company in 1999.
PSI later provided Damaso with 12 months' working notice of
termination at his current salary. The notice set out several job
responsibilities that Damaso was expected to perform, including
information technology, software service administration, and
ongoing support with automation customers. Damaso claimed that he
had been constructively dismissed. The parties litigated the matter
after Damaso had worked the full working notice period.
The Court agreed with Damaso, rejecting PSI's arguments that
(among other things) Damaso had accepted the job duties and that he
had fully mitigated his damages by working the full notice period.
Although the Court acknowledged that employers are "entitled
to some flexibility in managing their businesses", the Court
noted that this flexibility is limited to modest increases in job
duties without additional pay. In this case, the Court, among other
findings, concluded that PSI had unreasonably added to Damaso's
job responsibilities without providing him with the proper means to
fulfill them, and that Damaso cannot be taken to have mitigated his
damages when he clearly did not accept the changes and when PSI had
led him to believe that some clarification to his job and a pay
raise were reasonably possible. The Court awarded Damaso damages
equivalent to 12 months' notice.
Critical to PSI's failure in the case was that the
employment contract between PSI and Damaso did not contemplate
these kinds of changes. As the Court cited in the decision, the
Supreme Court of Canada has already found that:
"...an employer can make any changes
to an employee's position that are allowed by the
contract, inter alia, as part of the employer's
managerial authority. Such changes to the employee's position
will not be changes to the employment contract, but rather
application thereof. The extent of the employer's
discretion to make changes will depend on what the parties agreed
when they entered into the contract..."
Employers looking to avoid a potential PSI problem, therefore,
are better to:
check the language used in the employment contract or job
description to see if a reasonable person would consider the
potential new duties to form part of the original job; and
update an employee's employment contract when significant
changes in responsibilities or other terms of employment occurs;
offer the employee some form of consideration for the changes
to the employment (such as a pay raise).
Otherwise, the "one more thing" to the employee's
list may be a severance payout.
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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