Canada: Can Sexual Harassment Amount to Constructive Dismissal?

Last Updated: December 15 2005
Article by Shelley-Mae Mitchell and Sara Gittens

Most Read Contributor in Canada, September 2016

The interplay between the common law and statutory human rights is increasingly an issue in the employment law realm. While fascinating from an academic perspective, the overlap between human rights and common law can prove to be troublesome for employers. Employers now risk being faced with a doublebarreled attack from disgruntled former employees who proceed concurrently with a human rights complaint and a wrongful dismissal action.

One of the areas where this overlap can be clearly seen is in some recent decisions considering allegations of harassment, including sexual harassment, as the basis for a constructive dismissal claim at common law. One of the issues faced by employees in bringing human rights complaints is the relatively short limitation period (for example, six months in British Columbia and Ontario). If that time has passed, creative counsel will "reframe" what may be a human rights complaint for sexual harassment as a claim for constructive dismissal based on sexual harassment.

Abusive Treatment - A Developing Basis for Constructive Dismissal

Traditionally, the concept of constructive dismissal was limited to demotions or changes in compensation, responsibilities and/or reporting structure. These types of claims are still common, and often arise in the context of reorganizations or forced transfers. There is also, however, a new and emerging type of constructive dismissal claim, based on abusive treatment and/or a hostile work environment. Courts have found there to be an implied term of every employment relationship that employees be treated with civility, decency and respect. The underlying concept is that the hostile and or abusive conduct of the employer fundamentally breaches that implied term and creates an environment that makes continued employment impossible.

Harassment and Sexual Harassment – A Subset of Abusive Treatment

In two recent cases, employees have succeeded in constructive dismissal claims against their former employers based on harassment that they experienced in the workplace. In both cases, the employees brought the harassment to the attention of the employer, but the employers failed to address the concerns.

In Morgan v. Chukal Enterprises Ltd.1, Ms. Morgan and other employees were subject to abusive verbal behaviour by the kitchen manager of the defendant’s pub, which included yelling, swearing and belittling them, sometimes within earshot of customers. Ms. Morgan raised her concern on numerous occasions with the owners, but the owners failed to take any steps to prevent the manager’s abusive and hostile conduct. Ms. Morgan resigned from her employment and commenced a constructive dismissal action. The B.C. Supreme Court, in finding that a constructive dismissal had occurred, held that employees were entitled to work in a civilized environment and to be treated with dignity in the workplace. The Court placed emphasis on the fact that the employer was aware of the harassment and did not take appropriate steps to stop it. A constructive dismissal was found to exist.

The very recent decision of Chiang v. Kejo Holdings Ltd. (c.o.b. Steveston Collision),2 is an example of a case where the employee, Ms. Chiang, commenced both a human rights complaint (in February 2002) and a wrongful dismissal lawsuit (in July 2002) against her former employer based on the same conduct. The Court noted that Ms. Chiang did not pursue her human rights complaint (although the reasons for this are not set out in the decision). Shortly after starting as an office assistant for the defendant company, one of the other employees started persistently pursuing Ms. Chiang romantically. Ms. Chiang knew that this employee was married with four children and became uncomfortable and distressed by his attention, which resulted in health problems. She complained to management, but no action was taken. Eventually, Ms. Chiang was unable to return to work.

The Court found that Ms. Chiang had been constructively dismissed. Ms. Chiang also made a successful libel claim based on a letter written by counsel for the defendants to the Human Rights Tribunal in which malicious and "entirely false" allegations of Ms. Chiang having sexual relations with other men were made. Ms. Chiang was awarded general and punitive damages.

Practical Implications

The importance of implementing and following a comprehensive workplace harassment policy, including educating employees and managers about sexual harassment, is paramount. The failure of an employer to properly respond to harassment complaints has not found favour with the human rights tribunals or the courts. Employers who do not take steps to ensure that they have a workplace free of sexual harassment could find themselves faced with both a human rights complaint and a constructive dismissal action where an employee resigns after experiencing sexual harassment.3

After the employee has left the workplace, the problem becomes much more difficult to predict and control. The key to avoiding litigation over sexual harassment is to manage harassment proactively and to quickly and effectively respond to complaints by employees.


1 [2000] B.C.J. No. 1563 (B.C.S.C.)

2 2005 BCSC 414

3 But note that there is significant, somewhat conflicting jurisprudence, particularly in Ontario, about whether an employee’s human rights complaint should be stayed, pending resolution of the civil action.

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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