Canadian Employment Law Today

March 1, 2017

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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Constructive dismissal – What would a 'reasonable person' think? Changes by employer must be more than 'less-than-ideal' for employees BY RONALD MINKEN WHEN FUNDAMENTAL changes are implemented by a company, many employ- ees rightly raise concerns about whether this is constructive dismissal. But what about the working environment — can a less-than-ideal working environment re- sult in a constructive dismissal situation? In Lawrence v. Norwood Industries Inc, the Ontario Superior Court of Justice de- termined that a working environment that was "far from ideal" was insufficient to con- stitute constructive dismissal and, more importantly, not the true reason for the em- ployees' refusal to return to work. A husband and wife, Kenneth and Syl- via Lawrence, had worked for Norwood Industries, a provider of portable sawmills and forestry equipment in Kilworthy, Ont., for about 15 years. Sylvia was informed by Norwood that she, along with all warehouse employees, would now be required to start work at 7 a.m. instead of 8:30 a.m. Kenneth was unaffected by this change as he worked in the office. Sylvia informed Norwood that she would not agree to begin work earlier than 8:30 a.m. A few weeks later on a Friday, Sylvia re- ceived a letter of reprimand for arriving late to work, declining to work overtime, and her overall attitude. Sylvia refused to sign the letter of reprimand and informed Norwood that she would not take direc- tion from the new warehouse manager as she had been with Norwood longer than the new manager and "he could not tell her what to do." Norwood informed Sylvia that she needed to change her attitude and ac- cept the new policies being implemented by the company. Sylvia became upset and when Kenneth became aware of the situa- tion, he was also upset. e following Monday Kenneth in- formed Norwood that he and Sylvia would not be returning to work but did not provide a reason. Kenneth and Sylvia later brought an action for constructive dismissal, alleg- ing that the warehouse conditions were un- safe — due to clutter of products, the pres- ence of mice and bats including some feces, fluctuating temperatures and undrinkable water in the bathroom — and that the con- duct of Norwood, including providing the letter of reprimand, constituted fundamen- tal changes to their employment resulting in their employment being constructively dismissed. e court held that while the working conditions were less than ideal, they were not as extreme as described by Kenneth and Sylvia in the action. Further, neither Kenneth nor Sylvia raised concerns to Nor- wood about the working conditions while they were employed. Accordingly, the court determined that the working conditions were not the real reason for their refusing to return to work — the letter of reprimand was the true reason. e court noted that to establish a case of constructive dismissal, the Lawrences were obligated "to prove on a balance of probabilities that a reasonable person in their position would have concluded that the conduct on the part of Norwood when viewed objectively constituted a funda- mental change to the terms of employment to justify a conclusion that they were con- structively dismissed from their employ- ment." e court noted that while Sylvia subjec- tively viewed that she was being treated un- fairly by Norwood, the letter of reprimand was an appropriate response to her insub- ordination by her refusal to follow the in- structions of the new warehouse manager. Further, Sylvia's refusal to return to work after receiving the letter of reprimand was not an appropriate response from an objec- tive standpoint. e court determined that a "reasonable person" would not have con- cluded that Norwood's conduct constitut- ed a constructive dismissal and therefore, the action on behalf of both Kenneth and Sylvia was dismissed. Lessons for employees Any concerns about the working environ- ment or other changes being proposed by an employer should be promptly raised by an employee. e failure to object to working conditions and changes in a prompt manner and while still employed may have a negative impact on the em- ployee's entitlements later on. Employees must be very careful that they can estab- lish that a "reasonable person" would ob- jectively view the conduct of an employer as giving rise to a constructive dismissal situation. A subjective response by an employee will likely be insufficient to meet the ob- ligation on an employee to prove a case of constructive dismissal. Further, some- times disciplinary action by an employer is warranted and will not be viewed as in- appropriate by the courts. Lessons for employers Employers should be aware that dis- ciplinary action may be taken against employees when required and, if done appropriately, this should not result in a constructive dismissal situation. Em- ployers should ensure that a working environment is safe for employees and to promptly address any concerns raised by employees regarding the working en- vironment to avoid any claims for con- structive dismissal. For more information see: • Lawrence v. Norwood Industries Inc., 2016 CarswellOnt 14939 (Ont. S.C.J.). Canadian HR Reporter, a Thomson Reuters business 2017 Canadian Employment Law Today | 3 Cases and Trends ABOUT THE AUTHOR RONALD S. MINKEN Ronald S. Minken is a senior lawyer and mediator at Minken Employment Lawyers, an employment law boutique in Markham, Ont. He can be reached at Ron gratefully acknowledges Sara Kauder and Kyle Burgis for their assistance in preparation of this article. The working conditions weren't the real reason the workers refused to return to work — the reprimand for insubordination was.

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