Canada: Uncertain Changes And A Strained Relationship Do Not Amount To Constructive Dismissal

Reza Baraty alleged he was constructively dismissed from his position with Wellons Canada Corp. ("Wellons"). He considered: (1) his position to have been eroded to the point where he was no longer a manager; and (2) the work environment to have become intolerable because of bullying and harassment by a co-worker.

In Baraty v. Wellons Canada Corp., 2019 BCSC 33, the B.C. Supreme Court dismissed his claims.

Facts

Mr. Baraty was aware when he first became employed as chief estimator that he would be actively involved in the hands-on work of preparing estimates. Given his department only had two employees, he was required to work collaboratively with the estimator, Chris Corilla.

Early on, Mr. Baraty was shown a flow chart which described the work flow in his department. Shortly after he started in 2012, Mr. Baraty prepared a new document describing work flow procedures. From his perspective, the procedure document he prepared was in the nature of company policy, notwithstanding the fact that many of the procedures in the document were not followed in practice.

In May 2017, Mr. Baraty's manager changed. The new manager did not invite Mr. Baraty to an important meeting with senior managers from other departments. He did, however, invite Mr. Corilla. Mr. Baraty felt this meeting — in combination with the fact that his procedure document was not being followed — was confirmation that he was being pushed out. The new manager informed Mr. Baraty that the estimating procedures were under review and subject to change but did apologize for his error in not inviting him to the meeting.

Mr. Baraty also felt that he was being harassed by Mr. Corilla. Starting in 2014, their relationship was strained. Mr. Baraty reported Mr. Corilla's behaviour to their manager a number of times. Wellons brought in a mediator following a particularly serious allegation. Mr. Corilla also made allegations against Mr. Baraty. Wellons conducted an independent investigation, physically separated the two co-workers and tried to smooth over their differences.

Decision

The Court cited the leading case on the law of constructive dismissal, Potter v. New Brunswick Legal Aid Commission, 2015 SCC 10, a case in which the Supreme Court of Canada identified two branches of constructive dismissal. The first branch involves "a single unilateral act that breaches an essential term of the contract", and the second "a series of acts that, taken together, show that the employer no longer intended to be bound by the contract".

Mr. Baraty claimed that Wellons constructively dismissed him under the first branch because of substantial changes to his employment, and under the second because of the intolerable work environment to which he was subjected.

  1. No Substantial Change to Mr. Baraty's Employment

An employee need not wait until a breach has actually occurred in order to be constructively dismissed. Importantly, however, where no changes to terms of employment are ever actually made — or where the changes are contemplated but not finalized — there will be no constructive dismissal. In other words, the "mere contemplation or discussion of a reorganization or a restricting by an employer prior to a decision being made is not sufficient to give rise to anticipatory breach and a constructive dismissal".

Further, a change in the way in which an employee is to carry out his or her core duties also does not constitute a constructive dismissal. The Court found that Mr. Baraty's role was neither eliminated nor fundamentally changed, and he was therefore not entitled to treat his contract of employment contract as having been breached.

  1. Workplace Not Intolerable

The Court noted that an employer has a broad "responsibility to ensure that the work environment does not ... become so hostile, embarrassing or forbidding" as to render continued employment intolerable. A failure to satisfy this responsibility can result in a constructive dismissal. The test is whether the abusive treatment of the employee is so obscene as to amount to a repudiation of the employment contract.

The Court found that Mr. Baraty and Mr. Corilla were both rude to one other and added that employees must be able to handle unfriendliness, confrontations between co-workers or even some hostility without giving rise to a constructive dismissal. The Court found Wellons did not subject Mr. Baraty to working conditions which amounted to a constructive dismissal.

Takeaways

  • Employers should be wary of making unilateral, fundamental changes to any term or condition of employment. If employers are contemplating such a decision, they should discuss the change with the employee in advance (making it clear that no final decision has been made) and should be flexible if the employee responds negatively or has suggestions. If the employee ultimately agrees to the change, there will be no constructive dismissal.
  • Employers have a duty to treat their employees relatively well so that the workplace does not become intolerable. Employers should have a bullying and harassment policy in place, investigate all allegations of bullying or harassment and be proactive in resolving tense relationships.

Previously printed in the LexisNexis Labour Notes Newsletter.

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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