Canadian HR Reporter

N E W S 8 www.hrreporter.com Never say never: $1.3 million awarded for constructive dismissal A recent appeal court decision involving a worker who waited two years to sue for constructive dismissal highlights the challenges for employers when it comes to changes in the employment relationship, writes Sarah Dobson IT might have taken him two years but an employee's decision to claim constructive dismissal was permissible, according to the Court of Appeal for Ontario in denying the appeal of a decision that awarded $1.3 million in damages. So, what's the takeaway for employers? "Don't get too comfortable [thinking] that the situation is all resolved without having a very hard look at the circum- from the funeral home that he had stored there, Gary Eide changed the locks, without notifying McGuinty. Later, McGuinty found out that his desk had been moved to the basement and that his picture along with ones of his brother, father and grandfather had been removed. In September 2013, McGuinty started a two-week medical leave with a note from his doctor. He also sent a hand- written note to Gary and Steve Eide in which he stated: "I wish to make clear I am on medical leave and am not step- ping down from my position as general manager." The general manager later emailed Eide to say there were commissions owing to him and he would provide an update on his medical status and "continued absence from work-related stress." Eide indicated that McGuinty was on "an unsupported absence from work" and said that, if the general manager did not return to active employment in accordance with the contract, benefit coverage would cease. McGuinty never returned to work and there were no further communications until his statement of claim was issued in September 2015. stances of the individual who has been affected by the change and, in partic- ular, whether the change that you have made may have contributed to their inability to actually respond to the change," says Rob Sider, head of the labour, employment and human rights group at Lawson Lundell in Vancouver. Background of case Grant McGuinty was a 55-year-old third-generation owner of the McGuinty Funeral Home in North Bay, Ont. who sold the business in 2012 to a company controlled by Gary and Steven Eide. McGuinty signed a transitional consulting services agreement (TCSA) to work as general manager at the funeral home for a 10-year period, with no provisions dealing with early termi- nation. Unfortunately, a lack of trust devel- oped between McGuinty and Gary Eide. For example, Eide arranged for an employee to track the amount of time McGuinty spent at the office and required him to complete time sheets. He also told the general manager that he could no longer use the company vehicle for personal use. After McGuinty removed furniture Courts weigh in In 2019, trial judge Robbie Gordon concluded that the funeral home's course of conduct would have led a reasonable person in McGuinty's posi- tion to conclude that his employer no longer intended to be bound by the terms of the TCSA. He also rejected the funeral home's argument that the extended period of time during which McGuinty was on sick leave without notice should be understood as condoning the employer's conduct. "What is required for condonation or acquiescence is acceptance of the new situation, which may be inferred by the employee's willingness to remain in the altered position for a significant time period, absent other mitigating factors," said Gordon. "It cannot be said that [McGuinty] willingly remained in his position subject to the conduct of [the funeral home] for the inter- vening period. The evidence is clear that he did not and could not return to work during that period of time due to depression and anxiety caused by that very conduct." McGuinty was awarded $900,000 in salary, $108,000 for vehicle expenses, $90,000 in benefits, $9,000 for a golf membership and $167,000 in commis- sions for the remainder of his contract. And in December 2020, Justice Grant Huscroft of the appeal court agreed, NUMBERS ADD UP FOR CONSTRUCTIVE DISMISSAL Source: McGuinty v. 1845035 Ontario Inc. (McGuinty Funeral Home), 2020 55 Age of Grant McGuinty, general manager, in signing transitional agreement 2012 Year McGuinty sold his funeral home to new owners Gary and Steven Eide 10 Years Length of his fixed-term agreement with no early termination provisions $1.3 million Total damages for constructive dismissal, including salary and commissions

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