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IS BAD BEHAVIOUR A CONSTRUCTIVE DISMISSAL?

A man named Larry worked for a wine producer for ten years.  Around Larry's seventh year of employment, he was promoted to Regional Sales Manager with approximately three sales representatives reporting to him.
 
For the first nine years of Larry's employment, his relationship with his immediate boss was a good one.  For reasons unknown, during the last year of his employment, things went quickly downhill. 
 
When the boss became angry because nobody had told him that the payroll department had failed to process some commissions, Larry suggested that nobody had told the boss because on other occasions when they had raised such issues the boss became angry.  This made the boss even angrier than usual and he accused Larry of lying and trying to create a diversion.
 
When the boss couldn't get a fax through to one of the sales reps because the rep's fax machine was broken, he vented his anger on Larry asking "What kind of a sales manager are you if I can't communicate with my own reps?" 
 
When the boss, without investigating the matter, received a complaint from a hotel that it was not getting enough attention from a sales rep with respect to a wine-making dinner, he asked Larry, "What use are you to the company if you can't do a simple thing like a wine-maker's dinner?"  Soon after this event, the boss sent Larry a fax telling him he should learn how to separate from facts from personal bias or otherwise people would conclude that Larry did not know what he was talking about.
 
What followed was a series of events where instead of talking to Larry, the boss would just yell at him, reminding him of who owned the company (the boss's family) and repeatedly screaming "F... you!"
 
During one meeting Larry was told that he was off his rocker and insane.  He was told he wasn't needed by the company and should think about a leave of absence. 
 
For the most part, Larry stayed calm throughout these meetings and tried to bring the tone of the conversation back to a civil level.  His efforts had little effect.  Larry was made to feel that the boss was looking for an excuse to beat up on him at every turn.  At one point, the boss suggested that he should take a demotion back to a sales rep and do what he was good at.  If Larry made any effort to explain a decision or action he had taken that was being criticized by the boss, he would be told that he was fumbling for an explanation and that he was lying.
 
Larry loved his job and for the first nine years of his employment had received glowing praise and outstanding performance reviews.  Suddenly, he was apparently the worst employee in the place.  Or so it seemed in the eyes of the boss.  Eventually, as things escalated, Larry made the decision he could not return to work.  He had his lawyer send a letter to the employer indicating that Larry considered himself to have  been constructively dismissed.
 
In 99.9% of the cases, constructive dismissal is usually about a significant demotion or reduction in wages or other concrete change to the fundamentals of the terms of employment.  While there have been a few cases in the history of Canada where employees have sued for constructive dismissal based on abusive treatment by management, those cases are rare.  The test in these cases is whether a reasonable person in a situation like Larry's would find the situation unbearable and that the abuse had reached the level where it was a fundamental breach of the contract.  How Larry felt as a result of this treatment is not particularly relevant.  How the average person would feel is what is important. 
 
Larry’s case went to court and the Judge spent 20 pages of the final decision reviewing all of the altercations. The court found that Larry was not treated with the civility, decency, respect and dignity that he was entitled to expect from his employer and that his treatment was of sufficient severity to constitute a breach of the employment contract. Larry was awarded 12 months pay in lieu of notice.
 
That, however, was not all Larry got.  The court found that the employer, by recklessly embarrassing and humiliating Larry, was guilty of unfair dealing.  Some of the screaming and yelling had happened in front of other employees.  As a result of this humiliation, the court awarded Larry an extra three months' pay in lieu of notice for a total of fifteen all together. 
 
Cases such as Larry's are rare.  He and his lawyer took a long shot and won.  It is extremely difficult to predict whether a judge will find a story such as Larry's to constitute a constructive dismissal, or will simply dismiss it as the usual back and forth between employer and employee.  The boss argued in Larry's case that the boss had always had a bit of a temper and that these altercations were nothing new.  They were part of the employment relationship.  While I am not suggesting that the court made the wrong decision in Larry's case, on a different day with a different judge, Larry could easily have lost.
 
It is always my advice to employees or employers who consult me with respect to a situation similar to Larry's that the employer's treatment must reach the level of outrageous before it can be assumed with any certainty that a court will find a constructive dismissal.  The problem, of course, is that outrageousness is often in the eye of the beholder.

 Ed Canning is a partner in the Labour & Employment Group at Ross & McBride LLP.

This article was originally published in the Hamilton Spectator, April 7, 2003.
 
Ed Canning
Ed Canning
P: 905.572.5809
ecanning@rossmcbride.com