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Everyone Deserves a Second Chance, But How Much Tolerance is Too Much? Part II – Employees

In an employment context, a certain amount of “taking the bad with the good” is necessary for a functional workplace.  It is a rare employee who is never dissatisfied with any aspect of his or her job, and likewise it is a rare employer who is never dissatisfied with any aspect of his or her employees’ performance.  A healthy workplace requires compromise.  Short of a divorce, losing one’s job is one of the most difficult and traumatic transitions a person can go through in life, and it is often no easier for employers to lose and replace key employees.  As such, there is a degree of recalcitrance on both sides of the employment relationship to declare a state of affairs to be unacceptable and terminate the relationship.  This is not a bad thing, as it leads to a stable workplace.

That being said, employment law in Canada is structured in such a way that an aggrieved employer or employee must act to assert their rights in the employment relationship in a reasonable timeframe or risk losing out on the benefit of those rights.  If an issue in the employment relationship is not addressed for an extended period of time, an employer cannot then go back and claim this issue to be just cause for termination, nor can an employee go back and claim that the issue amounts to a constructive dismissal.  This month’s blog post will focus on the rights and responsibilities of employees in this regard.  See last month’s post on the rights and responsibilities of employers.

Constructive Dismissal

To fully understand how this concept applies to employees, one must be familiar with the law of constructive dismissal.  Generally, where an employee quits his or her job, that employee is not entitled to compensation from their employer.  Constructive dismissal is the exception to that rule.  It is a concept in Canadian law which allows an employee who has not been terminated, strictly speaking, to nonetheless claim that some action or series of actions on the part of the employer have resulted in a violation of the employment contract.  This entitles the employee to leave the position and be awarded termination pay notwithstanding.  Historically, this was a way to prevent employers from simply forcing employees to quit so that they did not have to pay severance.  Constructive dismissal can be claimed when an employer breaches an essential term of the employee’s contract either through a single unilateral act, or where a series of smaller acts, which taken together can be said to show that the employer no longer intends to be bound by the employment contract in such form as it was originally entered into by the parties.

Condonation

If an employee finds himself or herself in a position where his or her boss imposes new and unwelcome conditions on their employment, he or she is faced with several options, none of which are particularly attractive.  Those options are:

  1. Accept the new conditions and continue working without complaint
  2. Voice objection to the new conditions but nonetheless continue working
  3. Leave the position and sue for constructive dismissal

It should be noted that option c) should never be exercised prior to speaking with an employment lawyer.  Not every change in employment circumstance will constitute constructive dismissal and in today’s employment market it may be difficult to obtain another job.  Before deciding to walk away, it is imperative to determine not only that the change in circumstances did in fact constitute a constructive dismissal, but also that the termination pay the employee can reasonably expect to receive on settlement or judgment will be sufficient to adequately compensate for the risks/uncertainties associated with attempting to find a new job.

However, it is also important not to be overly hesitant.  Employees must be wary of the fact that continuing to work under the new terms and conditions for an extended period of time may indicate that an employee “condoned” the changes whether or not that was actually the employee’s intention.  If an employer can demonstrate that the employee “condoned” the changes to the employment relationship, the employee may be denied a right of action even in circumstances where the change might otherwise constitute constructive dismissal. In Gallant v Sudbury Roman Catholic School Board, 1985 CarswellOnt 966, it was found that it was “impossible to conclude” that a full time teacher who was demoted to a substitute was constructively dismissed at the time she resigned (May of 1980) despite the fact that events occurred in October of 1979, which a court may have seen as constituting a legitimate grievance.

That said, the courts will not bar action for reasonable/moderate delay.  While there is no hard and fast rule for how long an employee can wait before bringing a constructive dismissal action, it was found in Farquhar v Butler Brothers Supplies Ltd 1998 Carswell BC that an employee who left his post two weeks after a salary reduction sought legal recourse within an appropriate period of time.

Courts may also greatly extend the period in which an aggrieved employee may bring an action for constructive dismissal if the employee makes it clear that he or she is unsatisfied with the employer’s unilateral change in the terms of employment.  To be clear, this is a matter of credibility, so documentary evidence would be helpful in this regard.  In Hill v Peter Gorman Ltd 1957 CarswellOnt 242, the judge stated that the fact alone that an employee continues employment under new terms does not mean, as a matter of law, that he or she accepts those new terms.  If the employee makes it clear to the employer that he or she does not consent to the change in circumstances, the proper course of action would be for the employer to terminate the original contract (thus triggering severance pay) and re-hire the employee under new terms.  Until the employment relationship is terminated in this manner though, the employee was found to be entitled to insist on the performance of the original contract.

Bottom Line

This article does not constitute legal advice and is by no means an exhaustive survey of issues an employee seeking to leave a position following an unwanted change in circumstances may face.  The intent is to give an idea of the broad strokes that a court may consider in these types of cases.  As previously mentioned, always consult with an employment lawyer prior to leaving your position in response to unwanted changes in employment circumstances.

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