June 9, 2014
Print

It has long been the case that a demotion or significant reduction to an employee’s duties or remuneration can amount to a constructive dismissal. However, a recent decision shows that an Employer unilaterally increasing an employee’s responsibilities and duties can also, in the right circumstances, lead to a finding of constructive dismissal.

In the recent December 2013 case of Damaso v. PSI Peripheral Solutions Inc., the employee worked as a computer technician and software analyst who was responsible for servicing and maintaining printers. There was a signed job description describing the objective of the employee’s role as being to ‘service the in-house LAN networking, other related software and hardware issues and to provide service for PSI printer product line’. After 10 years, the employer unilaterally changed the employee’s job to that of an IT Administrator, and added numerous responsibilities on top of his usual duties. Not surprisingly, the employee became overwhelmed with the suddenly increased workload, and raised the issue with management. In response, the Company hired a contractor to take over the IT duties, told the employee he would not receive a raise, and changed all the network passwords to prevent him from accessing the network without prior Company authorization. Shortly thereafter, the employer terminated the employee by providing a termination letter that specified t he would receive 12 months’ working notice at his current salary. The letter then set out further job responsibilities including information technology, software service administration and ongoing support with automation customers. After receiving the letter, the employee became ill and sought treatment for anxiety, mood issues and depression. The employee started a lawsuit arguing that he had been constructively dismissed, and that the employer had acted in bad faith.

The Ontario Superior Court of Justice allowed the action finding the employee had been constructively dismissed. The Court noted that while employers were entitled some flexibility in management as their business needs evolved; this flexibility did not allow an employer to demand that an employee continue to perform all the duties set out in a signed job description while piling on significant extra duties. The Court found that new duties overwhelmed the employee such that he was unable to complete all tasks as a result of the increased workload. He was thus constructively dismissed.

The Court also rejected the Employer’s argument that the employee had failed to mitigate his damages by failing to return to work after receipt of the termination letter. While the employee’s salary would stay the same if he had returned to work (in other words he would suffer no financial loss), the Court found that the working conditions had been dramatically altered and that he would face an environment of hostility, embarrassment and humiliation. It was therefore unreasonable to expect the employee to return to work. As a result, the employee was awarded 12 months’ notice. The Court however, rejected the employee’s claim for bad faith damages, holding that conduct did not meet the threshold of an egregious display of bad faith required by the Supreme Court in Honda Canada v. Keays.

This decision illustrates that businesses need to be careful when significantly increasing an employee’s duties. Adding significant duties unilaterally without consultation, and while also not providing the employee with greater compensation, may be a recipe for a possible constructive dismissal claim. This will particularly be the case if the Employer also creates conditions that are detrimental to the employee in the performance of their job. If an employee can show they are overburdened by their new duties, that it’s objectively impossible to meet the employer’s requirements, and that they face a hostile environment in the workplace if they stay, the employee may take the position they have been effectively dismissed, and owed their notice entitlements.

This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2017 Nelligan O’Brien Payne LLP.

Service: Employment Law