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Constructive Dismissal

There are certain circumstances where a worker can consider their employment terminated without notice even though their employer has not expressly let them go.

This is known as constructive dismissal. It may appear that the worker quit or resigned, but in law the employer is deemed to have fired or terminated their employment.

In unionized workplaces termination of employees is covered by the collective agreement. Unionized employees can grieve the actions of an employer but cannot sue for constructive dismissal.

Toxic Work Environments

Generally speaking, a toxic or poisonous work environment in relation to sexual harassment can be the result of a single, serious incident or a pattern of behaviour that impacts the workplace as a whole. As such, it has a negative impact on workers and may make continued employment in that workplace intolerable. Employers that allow a toxic work environment to develop fail to meet their obligation to ensure the health, safety and well-being of their workers.

Generally speaking, constructive dismissal must involve an employer changing the fundamental terms of the employment relationship without the worker agreeing to the changes. Actions that may lead to a finding of constructive dismissal include things like...

  • a demotion
  • a wage or salary reduction
  • altering the worker's job description or working conditions
  • allowing a toxic work environment

There are occasions where a single incident can be serious enough to give rise to a claim of constructive dismissal. In other cases, it may involve a pattern of behaviour or a number of incidents.

Not every change to an employment relationship will amount to constructive dismissal. While the change must be fundamental or substantial, what this actually means will depend on the circumstances.

What the Courts are Saying

In the case of Colistro v. Tbaytel, the plaintiff had worked for a telecommunications company for close to twenty years. At one point during the plaintiff's employment her immediate supervisor had been fired for sexually harassing her and other co-workers. Eleven years later the company decided to re-hire him as Vice-President of the marketing department.

Upon learning of this re-hiring, the plaintiff informed her boss that she felt ill and went home. Later that evening, along with her husband, she met with her boss to relay her concerns and the circumstances of the earlier sexual harassment complaint. A few days later she informed her boss that she was "not eating or sleeping, was vomiting and on the verge of a nervous breakdown." She provided a note from her doctor advising that she would be off for one month due to stress.

The company discussed the matter internally and made the decision to go ahead with the re-hiring of the harasser. They noted that they took the "allegations" seriously and would discuss "appropriate behaviour" with him.

The plaintiff did not return to work and was ultimately diagnosed with Post Traumatic Stress Disorder (PTSD) and depression. She then sued for constructive dismissal and intentional infliction of mental suffering.

At trial the court found that the plaintiff had been constructively dismissed and awarded her damages equal to 12 months' pay in lieu of notice and an additional $100,000 for bad faith in relation how the matter was addressed. Her claim for intentional infliction of mental suffering was dismissed. The Court of Appeal agreed with the trial judge's findings.

The Court of Appeal noted that the company knew the plaintiff’s earlier harassment complaint was "more than an allegation." The Court also found that the company's position on the re-hiring was demeaning, dismissive and re-victimized the plaintiff and minimized the past conduct of the harasser in the eyes of the plaintiff and other employees...

The plaintiff bears the onus of establishing that [the employer's] conduct made her continued employment with them intolerable, taking into account accommodation proposals made. I am satisfied on a balance of probabilities that an objective reasonable bystander, aware of all the facts, would find that [the plaintiff's] continued employment with [the company] in these circumstances was intolerable....

[The company's] conduct toward [the plaintiff] was flagrant and outrageous. I also find that [the company's] treatment of the plaintiff was grossly unfair, unduly insensitive and in blatant disregard of her interests. The Court has the benefit of extensive expert medical evidence which establishes that the plaintiff suffered actual damages as a direct result of the way in which she was treated by [the company] at the time of her dismissal.

It's important to note that at the end of the day, while the plaintiff was successful in her claim regarding constructive dismissal, the lawsuit cost her more than she was awarded as she was ordered to pay legal costs to the other parties in relation to her failed claim of intentional infliction of mental suffering.

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The Shift Project is funded by the Department of Justice and delivered by the Public Legal Education Association of Saskatchewan (PLEA).