Canadian Employment Law Today

May 1, 2013

Focuses on human resources law from a business perspective, featuring news and cases from the courts, in-depth articles on legal trends and insights from top employment lawyers across Canada.

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CELT May 1 2013:celt 467.qxd 13-04-29 10:43 AM Page 2 May 1, 2013 Ask an Expert with Brian Johnston Stewart McKelvey, Halifax Have a question for our experts? Email ■ TERMINATION: Quitting employee changes mind Question: What should we do if an employee clearly resigned — with a written resignation and repeated confirmation — but was later diagnosed with depression and anxiety and claimed she wasn't thinking clearly? It wasn't evident at the time she had any mental health issues, her position has been filled and we have no positions available for which she's qualified. Answer: Presumptively, if an employee resigns, it ends the employment relationship. However, there can be exceptions. It is well known that sometimes employees change their minds. In the unionized context, arbitrators focus on whether the employee's resignation represented the employee's true intent. Arbitrators have suggested the act of quitting embraces both a subjective intention to leave employment and some objective conduct which manifests a continuing effort to carry out that intention (U.E., Local 512 v. Anchor Cap & Closure Corp. of Canada). Resignations made under duress, emotional turmoil and stress or by persons whose mental condition deprived them of the capacity to make such decisions may be treated as not having had the true intention to resign. In N.B.U.P.P.E. v. New Brunswick (Department of Public Safety), an employee who 2 was suffering depression was not held to her resignation. In this instance, if the employee was unionized, an arbitrator would likely allow the employee to rescind her resignation, but due to the fact the position had been filled, the employee would likely be put on a leave. It should be considered undue hardship for the employer to have to dismiss the replacement employee whom it hired in good faith. With respect to a non-unionized environment, the treatment of a revoked resignation is a little different. In Kieran and Ingram Micro Inc., the Ontario Court of Appeal said an employee may revoke a resignation so long as the employer has not relied upon it to its detriment. Detrimental reliance is not a condition existing in labour arbitration. In a more recent decision, Reid v. Stratford General Hospital, an employee who had worked for the employer for almost 20 years submitted her resignation. The employee did not provide any reasons for the resignation in her letter — she had been experiencing a great deal of stress, both in her personal and professional life. The employee's resignation was accepted by letter the next day which was received by the employee two days later. However, prior to her receiving this letter, the employee rescinded her resignation. She indicated she had resigned due to "extreme stress" and she actually had "no intention of resigning from a job in which (she had) invested 20 years." The employer refused the rescission of her resignation, at which point the employee claimed she had been terminated without notice and successfully sued. The court relied on a 1986 decision (Tolman v. Gearmatic Co.), where the British Columbia Court of Appeal said: "unless the employer acted to its detriment on the expressing of intention to resign, the plaintiff remained free to change his mind." The court in Reid relied on this statement and found, since the employer did not rely on the resignation to its detriment, the employer should have accepted the employee's rescission. Most likely, in this instance — a nonunionized setting — a court would find it would be undue hardship to have the employer place the employee on some form of leave or displace the most recently hired employee, when the employer had taken the employee at her word and relied upon her resignation to its detriment. Therefore, in this scenario, it is unlikely the employer would have to reinstate the employee. ■ CONSTRUCTIVE DISMISSAL: Demotion instead of dismissal for discipline Question: Can a demotion be used as discipline for serious misconduct if the alternative is likely termination, or could it still be constructive dismissal? Answer: Most employers will dismiss rather than run the considerable risk of a constructive dismissal lawsuit. Generally, any unilateral decision by the employer regarding a fundamental aspect of the employment relationship, absent an express contractual provision allowing such, can expose the employer to a claim of constructive dismissal. However, if the underlying reason for the employer's decision was serious enough that it could substantiate a just cause termination of the employee, such reason could arguably support a lesser disciplinary measure such as demotion. In 2001 the Supreme Court of Canada said the question of appropriate discipline is one of proportionality (McKinley v. BC Tel): "Underlying the approach I propose is the principle of proportionality. An effective balance must be struck between the severity of an employee's misconduct and the sanction imposed." If the employer can establish that a just cause dismissal could have been appropriate remedy — and there is a good chance such would be the case if the offence was a serious one, such as harassment or theft — then the employer should be able to establish that something short of dismissal, such as demotion, was just as, if not even more so, appropriate. Published by Canadian HR Reporter, a Thomson Reuters business 2013 Continued on page 8

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