Archive of the categories: Constructive dismissal

In Ontario, for an offer of working notice to a constructively dismissed employee to be considered for mitigation purposes, the employer must prove the offer was clearly made AFTER employee refuses to accept changes

  • The case is here: Farwell v. Citair, Inc. (General Coach Canada), 2014 ONCA 177
  • Employee was moved to a different, inferior, position within the employer’s business
  • Employee refused to accept the change and told the employer he was treating the reorganization as a constructive dismissal
  • Employee sued for constructive dismissal
  • Employer argued the employee failed to mitigate his damages when he refused to accept the new position
  • Court found there was no evidence that the employer extended the offer of re-employment (ostensibly, the new position) to the employee after the employee claimed he was constructively dismissed
  • The Court said this was fatal to the employer’s argument regarding the employee’s failure to mitigate.
  • The Court stated:

[t]o trigger this form of mitigation duty, the [employer] was therefore obliged to offer [the employee] the clear opportunity to work out the notice period after her refused to accept the position […] and told the [employer] he was treating the reorganization as constructive and wrongful dismissal” (para 20).

As is typical in these situations, it appears there was no follow-up after the employee balked at the reorganization.  The employer may have saved itself a lot of money by making it very clear to the employee that he would be able to work out the notice period in the new position (although this is questionable, given the trial judge’s finding that the employee was acting reasonably when he refused the new position).  

Employment contract contained no term guaranteeing minimum amounts of work. No constructive dismissal for failure to provide work: Bonsma v Tesco Corporation, 2013 ABCA 367 (CanLII)

  • The case is here
  • Employee was employed as a top drive supervisor and entered into written employment contract with employer
  • The contract set out rates of pay but did not expressly set out any minimum amount of work to be provided in a given period of time
  • Employee resigned his position after working only 4 hours over a four month period
  • Trial Court found there was no guarantee on the part of the employer to any top drive supervisor to provide any minimum amount of work in the field
  •  Court of Appeal, at paragraph 15, confirmed trial Court’s finding there was no implied term guaranteeing a minimum amount of work:

A term of an employment contract will be implied in fact only where it represents the parties’ intentions at the time the agreement was signed; Glover v SNC Lavalin1998 ABQB 752 (CanLII), 1998 ABQB 752 at para 16, 229 AR 41. The trial judge’s factual findings did not support the drawing of an inference that the parties intended that a minimum work guarantee should be implied into their employment relationship. The evidence relating to the parties’ intentions at the time the contract was signed included evidence: that the work was cyclical; that other employees did not expect a minimum amount of work each year; that some employees worked for other employers or themselves during down times; and that there was a pattern of long gaps in work assignments given to other employees.

  • Further, at paragraphs 16-17:

This evidence does not support the conclusion that a guarantee of a minimum amount of work was necessary pursuant to the business efficacy test – i.e. that the contract would not have been workable otherwise; see Grover v Stirling Bond, [1935] 3 DLR 481, [1935] SCJ No 50; Piggot Construction Ltd v WJ Crowe Ltd, [1963] SCR 238, 28 DLR (2d) 9.

Such an implication was also not available pursuant to the officious bystander test – i.e. that the term was so obvious that it goes without saying that the parties must have intended it to form part of their contract; see Shirlaw v Southern Foundaries (1926) Ltd., [1939] 2 KB 206 at 227; Reigate v Union Manufacturing Co (Ramsbottom), [1918] 1 KB 529 at 605.

  • Appeal dismissed

Somewhat surprising decision if considered without attention to the particular circumstances of this employee.  In my experience, the majority of employment relationships are distinguishable from this situation based on the parties’ expectations and practices regarding minimum amounts of work.