Law Times

Law Times • February 29, 2016 Page 11 www.lawtimesnews.com The moving target of constructive dismissal law BY JUDY VAN RHIJN For Law Times L awyers do not like being asked by employees wheth- er an employer's unilateral action constitutes a constructive dismissal. The law of constructive dis- missal frequently changes and advice that is correct today can be incorrect tomorrow. Doug MacLeod of MacLeod Law Firm says constructive dis- missal is probably the toughest issue employment lawyers face. "It's an all-or-nothing thing, like being pregnant. Either you are or you're not," he says. "If you get it wrong, your clients end up with nothing. You are talking the difference between zero damages and two years pay. The employer can lose 24 months of salary and lawyers' fees. It's big, big, money." Jennifer Costin at Siskinds LLP is seeing that the way con- structive dismissal is being used is changing. "You have your textbook cat- egories of changes to pay, hours, work location, unfair work prac- tices, and a toxic work environ- ment," she says. "There is a heightened un- derstanding of harassment and bullying. People are fitting more constructive dismissal claims under the last category." In fact, the concept of con- structive dismissal is broadening legally but not always in practice. In the 2015 decision in Potter v. New Brunswick Legal Aid Services Commission, the Su- preme Court broadened the con- cept of constructive dismissal to include a series of acts that show the employer intended to no longer be bound by the employ- ment contract. In this case, the employer placed an employee on paid administrative leave with- out providing a legitimate busi- ness justification. The court even reversed the onus of proof where an admin- istrative suspension is at issue, requiring the employer to show that the suspension is reasonable or justified. In any other situation, the burden of proof remains on the employee. Peter McSherry, an employ- ment lawyer in Guelph, Ont., says this makes constructive dismissal cases more challenging and more risky than a typical termination of employment situation. "The employee is in a disad- vantaged bargaining position in an area where the vast majority of cases get settled," he says. MacLeod says the Potter deci- sion took him by surprise. "Up until that decision, a lot of employers put people on paid leave for business reasons," says MacLeod. "The Supreme Court said it was constructive dismissal, which was news to a lot of people." MacLeod notes, however, that constructive dismissal is an area where the law is constantly changing. "Advice that is given today may be right, but it could change," he says. "This issue is litigated all the time and it's hard to predict what the court's going to do." For this reason, McSherry says he would not rely on this decision alone if faced with a similar fact situation. "It is a judgment call. When is it clear that they have no inten- tion of bringing you back? If you know they're going to terminate the employee anyway, particu- larly if the employer has not put anything in writing, you could wait the seven weeks, like in the Potter case, and then sue for con- structive dismissal, but I wonder if it is better for the employee to wait until they are actually ter- minated? Then the burden of proof goes in their favour," says McSherry. In this situation, or when an employee is being offered a newly created position, McSherry rec- ommends getting as much detail in writing from the employer as possible. "Ask for more details of what's being offered so the employer's story is tied to something. Judges are trying to deal with two people with markedly different descrip- tions of a conversation," he says. "It's like trying to pin jello to the wall." Adding to the woes of em- ployees who take the constructive dismissal route is the increasing prevalence of offers inviting the employee to work out his or her notice period in order to mitigate damages. This concept, which started in 2008 in Evans v. Teamsters Local Union No. 31, was con- firmed in the Potter case. Potter reaffirmed that em- ployees have a duty to mitigate their damages by remaining in the workplace, unless the em- ployment relationship has be- come untenable. "People may have an obliga- tion to work out their notice pe- riod after constructive dismissal is declared unless there is harass- ment or humiliation," says Cos- tin. "The trouble now is that if you declare constructive dismissal, you may be stuck with having to do that. It wouldn't usually be the employee's first choice, whereas some employers are thrilled at the idea. The upside is that it saves them a lot of money and they get some work out of the employee." Costin has seen employers use this strategy to effectively call the employee's bluff. "They can still say they don't agree that it's a constructive dis- missal, but if it is, they invite them to work out the notice period," she says. "It's reasonable for them to do so, unless it's humiliating." Costin notes that the require- ment to mitigate this makes claiming constructive dismissal a harder decision for employees. "It's never an easy argument anyway. It's always a bit of an up- hill battle, to go through that and still have to work out the notice period," she says. LT FOCUS Platinum Sponsor Silver Sponsor Bronze Sponsor Hosted in Partnership With Date: Sept. 8, 2016 Location: Arcadian Court, Toronto 6 p.m. Cocktail Reception 7 p.m. Gala Dinner and Awards Presentation Emcee: Gail J. Cohen, Editor in Chief, Canadian Lawyer/Law Times Dress: Business Attire innovatio-awards.com Innovation. It's in our DN The Canadian Lawyer InHouse Innovatio Awards celebrate in-house counsel, both individuals and teams, who have found ways to show leadership by becoming more efficient, innovative and creative in meeting the needs of their organizations within the Canadian legal market. Untitled-2 1 2016-02-24 1:21 PM Doug MacLeod says constructive dismissal is probably the toughest issue employment lawyers face.

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