In general, if an employee decides to leave their job of their own accord they are considered to have resigned. However, if an employee leaves their job because their employer substantially changes essential terms of their employment contract, they are considered to have been constructively dismissed. One way that employers can constructively dismiss employees is by permitting an abusive, intolerable work environment.
How can employers properly address workplace conduct to minimise the risk of constructive dismissal claims? This issue was addressed by the British Columbia Supreme Court in Baraty v Wellons Canada Corp.(1)
The claimant was employed by Wellons Canada Corp as the head of the estimation department. The estimation department had only two employees, the claimant and a subordinate.
To put it mildly, the claimant and subordinate's relationship was acrimonious. Over time, the claimant went to management and accused the subordinate of:
- doing outside work on company time;
- insubordination;
- physical intimidation;
- verbal abuse; and
- harassment.
Wellons investigated the claimant's claims and found that many of the accusations were unfounded. The investigation concluded that in one incident the subordinate had directed profanity toward the claimant. Wellons disciplined the subordinate for this.
The investigation also concluded that both men were to blame for the poor working relationship. Wellons brought in a coach in an attempt to improve the working relationship between the claimant and the subordinate; however, their relationship did not improve. As such, the claimant subsequently petitioned Wellons to terminate the subordinate for cause – Wellons refused.
A new general manager explored the possibility of integrating the estimations and sales departments. Based on these discussions, the claimant became convinced that a decision had been made to demote him. In fact, no final decision had been made regarding the integration of the departments. Further, integration would not have resulted in the claimant being demoted or any change to his remuneration, title or core responsibilities.
Frustrated by management's failure to discipline the subordinate and convinced that Wellons had decided to demote him, the claimant resigned and sued for constructive dismissal.
There are two branches, or general categories, of constructive dismissal:
- first, a single unilateral act that breaches an essential term of the contract; and
- second, a series of acts that when taken together show that the employer no longer intends to be bound by the contract.
The claimant claimed that both branches applied. The court concluded that there had been no constructive dismissal on either branch.
A constructive dismissal claim was premature because no decision had been reached to integrate estimations and sales. Further, integration would not have:
- changed the claimant's remuneration, title and core responsibilities; or
- resulted in the claimant's constructive dismissal.
There was no intolerable work environment which gave rise to constructive dismissal. The test for an intolerable work environment is a high one: whether a reasonable person in the circumstances should not be expected to persevere in the employment. An individual's subjective perception of the work environment will not be enough to establish constructive dismissal. Unfriendliness, confrontations between co-workers or even some hostility and conflict will not amount to constructive dismissal where an employee can still perform their work.
The court noted that this had not been a case of repeated insulting behaviour, nor had such behaviour been tolerated or condoned by management. Wellons treated the complaint seriously by disciplining the subordinate for using profanity and arranging for a career coach to assist the claimant and the subordinate. The court concluded that the subordinate's conduct had not reached the level where a reasonable person should not be expected to persevere in the employment.
This case not only offers a useful summary of the law on poisoned workplaces, but also offers employers several practical suggestions on how to reduce the risk of successful constructive dismissal claims:
- Implement a respectful workplace policy – this may be required by legislation in some jurisdictions. It also shows a commitment to a respectful workplace and may help to defend against a constructive dismissal claim, such as that made by the claimant.
- Treat complaints seriously – if an employer receives complaints from its employees it is important to take the complaints seriously and investigate them.
- Take action where there is wrongdoing – if an investigation reveals that an employee has engaged in behaviour that creates a hostile work environment, the employer should take steps (eg, discipline) to make clear that such behaviour will not be tolerated.
- Reaffirm a commitment to a respectful workplace – when complaints arise, the employer must make it clear to all affected parties that it desires to ensure a respectful workplace.
- Exercise care when modifying employment conditions – employers have, in certain circumstances, the managerial authority to modify employment conditions. However, modifications must always be analysed in their particular context in order to ensure that they do not trigger a constructive dismissal. It is prudent to obtain legal advice as to whether modifications substantially alter the essential terms of their employment.
Endnotes
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