Canada: Ontario Superior Court Offers Some Hope For Employers Defending A Constructive Dismissal Claim

Last Updated: July 30 2015
Article by Pamela Hofman

Most Read Contributor in Canada, November 2018

A recent Ontario Superior Court of Justice decision1 provides some hope to employers who are defending a constructive dismissal claim by making it clear that the employee's subjective perception of the employer's conduct could well be insufficient to ground such a claim. It also confirms that the duty to mitigate may require that employees accept continued employment where a reasonable person would do so.

Background

The plaintiff (Bolibruck) had approximately 36 years' service with the Niagara Health System (NHS) when she claimed that she had been constructively dismissed. Bolibruck was the health program director (HPD) at the St. Catherine's General Hospital (SCG). In that role, Bolibruck had various clinical responsibilities, developed budgets and had seven or eight managers reporting to her. She also led the new "LEAN" initiative to improve hospital efficiencies and was involved in transitional planning for the new hospital site under construction.

In March 2011, Bolibruck was advised that her role would be changing. Bolibruck claimed she was told she would be responsible for a variety of programs that she maintained were difficult, time-consuming and "no-win" jobs. Upset with the change, Bolibruck cleaned out her office. Nonetheless, over the next several weeks, NHS repeatedly attempted to clarify the new role and assure Bolibruck that she was a valued employee.

In early May 2011, Bolibruck raised the issue of a severance package. NHS suggested it would be inappropriate to discuss a severance package until after the job proposal was clarified. NHS provided Bolibruck a written description of her new job in June 2011.

The description indicated that the job required significant clinical knowledge and experience. Bolibruck would no longer be the HPD for the SCG, but would continue to lead the LEAN initiative and transition programs. In addition, Bolibruck would be a rotating on-call clinical HPD with the same salary and benefits. Bolibruck would also be the director of non-clinical operations. NHS stated that these programs were extremely important to the hospital and Bolibruck's work was valued. Bolibruck said she would take the summer months to consider the job.

On July 21, 2011, Bolibruck advised NHS that she considered herself constructively dismissed. NHS responded by saying it sincerely wanted her back and the role was still open to her. Bolibruck resigned on September 20 and quickly accepted another job at a significantly lower salary.

Constructive dismissal

Dealing first with the allegation of constructive dismissal, the court noted that whether the alleged breach of the employment contract constitutes a repudiation of the contract depends on the nature and degree of seriousness of the breach, the intention of the parties and the prevailing circumstances. However, the action must be founded on the conduct of the employer and not on the employee's perception of that conduct.

The court found that within NHS, everyone was aware of upcoming significant changes in operations due to the construction of the new hospital and the required amalgamation of two hospital sites. It was made clear at the outset and throughout by NHS that Bolibruck would still maintain her same salary, benefits, title and even her own office.

The court stated that an "implied term of any contract of employment is that the employer has the right, if it sees fit to do so, to make a reasonable reassignment of an employee to other duties... The Court will not imply a term that an employee is to have an identical mix of duties and responsibilities at all times." The employer will have a "certain degree of latitude." Given that Bolibruck had worked for NHS for many years and in different capacities, the parties' conduct created an implied term that she could be transferred to another similar or equivalent position if there was to be no loss of salary or benefits.

In addition, the employer's conduct in this instance did not demonstrate an intention not to be bound by the contract. NHS took steps to reassure Bolibruck of the status and profile of her role and their need to have her accept the new role, given her experience and capabilities.

The court dismissed the action and concluded that, subject to any settlement offers, Bolibruck would be liable for the defendant's legal costs on a partial indemnity basis.

Damages and mitigation

The court went on to determine that, had Bolibruck been found to be constructively dismissed, she would have been entitled to 24 months' notice. However, the court also held that Bolibruck failed to mitigate her damages when she did not return to work for NHS.

Citing the Supreme Court of Canada's decision in Evans v Teamsters Local Union No. 31, the court noted that when the employer offers the employee the chance to mitigate her damages by returning to work for the employer, the central issue is whether a reasonable person would accept such an opportunity.2 A reasonable person should be expected to do so where, as in this case, the salary is the same, the working conditions are not substantially different, the work is not demeaning and where the personal relationships are not acrimonious.

Implications

This case gives hope to employers dealing with long-service employees who are looking for a severance package and seek to extract such a package by attempting to characterize a change in job duties as constructive dismissal. Not every change in duties will ground a successful constructive dismissal claim, particularly when there is no change in salary or benefits.

Thanks to Joe Bricker, summer student, for his assistance in preparing this legal update.

Footnotes

1. Bolibruck v Niagara Health System, 2015 ONSC 1595.

2. Evans v Teamsters Local Union No. 31, 2008 SCC 20.

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