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Oct 1 – 3, 2008 in Moncton, NB!

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Jennifer Macmurray

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The Bench
Moira Goodfellow and Ryan Johnston

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May 2008 Newsletter

The Bench
Moira Goodfellow and Ryan Johnston

In this edition of The Bench, you’ll be asked to determine whether the employee was dismissed by the employer, and if so, to determine how much the employee was entitled to in damages.

Here are the facts: Pauline Morland was hired by Kenmara Inc. (“Kenmara”) in July 2003 as a sales representative. She was paid a salary plus commissions. The owner, Ms. Kenyon, had an abrasive and confrontational management style, often uttering profanities at her employees. Issues arose between Ms. Morland and Ms. Kenyon regarding how commissions were to be paid and performance targets. As a result, Ms. Morland and Ms. Kenyon did not get along very well and had a number of altercations.

In March, 2004, Ms. Kenyon and Ms. Morland had a particularly unpleasant confrontation, during which Ms. Kenyon repeatedly yelled at Ms. Morland and attempted to prevent her from leaving Ms. Kenyon’s office. When Ms. Morland was able to leave, she grabbed her things, rushed out of the building, and did not return to work. Ms. Morland subsequently brought a claim for ‘constructive dismissal’ on the basis that she had endured enough abuse from her employer up until that point, and that it was unreasonable for her to be expected to continue in the employment relationship.

What is “constructive dismissal”?
Constructive dismissal is a term most often used to describe those situations where an employer unilaterally changes the terms of an employment contract without the employee’s consent, and the employee consequently leaves their employment within a reasonable amount of time. Constructive dismissal can also be used, however, where an employer’s conduct is so egregious that an employee cannot reasonably be expected to remain in the position.

The test for constructive dismissal resulting from an employer’s conduct was discussed in Shah v. Xerox Canada Ltd. (1998), 49 C.C.E.L. (2d) 30, and is as follows:

The test, I believe, is objective: it is where the conduct of the manager was such that a reasonable person in the circumstances should not be expected to persevere in the employment. As the particular circumstances are crucial, each case must be decided on its own facts…If the employer’s conduct in the particular circumstances passes so far beyond the bounds of reasonableness that the employee reasonably finds continued employment to be intolerable, there will, in my view, be constructive dismissal whether or not the employee purports to resign.

What is your ruling from the Bench? Was Morland constructively dismissed?
If you ruled that Kenmara did constructively dismiss Ms. Morland, you're right. The Ontario Superior Court of Justice found that she had been constructively dismissed from her employment with Kenmara. The Court held that Ms. Kenyon had created “a hostile work environment by continually using foul language and abusive conduct toward the plaintiff.” The Court held that the confrontation in March, 2004, was, in effect, the ‘straw that broke the camel’s back’.

Since Ms. Morland was a short term employee and had found a job 3 months after her termination, she was awarded 3 months salary in lieu of reasonable notice. However, the Court added another month for the abusive conduct that led to Ms. Morland’s constructive dismissal.

This case illustrates the importance of providing a workplace free of abuse and harassment. If not, employees may have grounds for constructive dismissal and additional notice for the abusive manner of termination, which can lead to serious financial consequences.

For more information see: Morland v. Kenmara Inc., [2006] O.J. No. 657 (S.C.J.).

Moira Goodfellow and Ryan Johnston are members of McInnes Cooper’s Regional Labour and Employment Law Practice Group. For more information, or to contact Moira, Ryan, or any member of McInnes Cooper, please visit www.mcinnescooper.com