Opportunity knocks but worker doesn’t answer (Legal view)

Sobeys manager felt 2 jobs offered after restructuring amounted to demotion
By Jeffrey R. Smith
|Canadian HR Reporter|Last Updated: 01/26/2012

A grocery store chain that eliminated a long-time employee’s position and offered her a different position at another location did not constructively dismiss her, the Nova Scotia Supreme Court has ruled.

Debbie Gillis, 47, joined Sobeys as a cashier when she was a teenager and worked her way up at the company over 28 years, eventually holding management positions and becoming a food experience manager as part of the marketing department at the Sobeys head office in Stellarton, N.S.

Gillis didn’t have any disciplinary issues during her tenure and she received several positive performance appraisals.

In 2009, the vice-president of marketing wanted the department to restructure, to increase efficiency and meet the 2010 marketing budget — with the stipulations there was to be no increase in management-level positions or any negative impact on existing employees.

The management team presented a proposal in February 2009 that didn’t affect Gillis’ position.

However, on March 30, 2009, the vice-president of marketing and vice-president of HR met with Gillis and told her that her position had been eliminated but they wanted to maintain the employment relationship with her.

Gillis was offered a choice of two positions — assistant store manager at a store in Truro, N.S., or demo co-ordinator at the head office. Both positions had lower salaries but Sobeys offered a one-time lump sum payment to make up the salary difference in her first year. Her vacation and benefits would stay the same.

Sobeys indicated it wanted to make the organizational changes as soon as possible and asked for Gillis’ decision within two days. Gillis was caught off-guard by the meeting and felt “devastated, shocked and very angry.”

She came to work the next day for a short time but eventually went home and didn’t return. On the deadline Sobeys gave her, Gillis wrote to the company to say the short deadline to make such an important career decision was “unfair and unreasonable” considering her length of service and value to the company. She asked for another week to decide, to April 7, and Sobeys agreed.

Gillis had problems with the assistant store manager position in Truro because she had a child and didn’t think she could manage the hours. She spoke to her babysitter about expanding the hours but it wasn’t feasible. Gillis didn’t explore other child-care options because she felt the position was a demotion. She didn’t consider the demo co-ordinator position because she felt it was even more of a demotion and a more significant drop in pay.

She felt both positions were demotions that would be “humiliating and embarrassing.” A few days later, Sobeys received a letter from Gillis’ lawyer and it placed her on unpaid leave. The company said it preferred to discuss employment matters with her directly and reiterated the deadline for her decision.

Sobeys stated that if Gillis did not return to work, it would consider her to have resigned. If that was the case, Gillis would be given a one-time payment of $23,104, equal to the salary-difference payment for the assistant store manager position. Gillis didn’t respond and Sobeys proceeded with the severance. Gillis sued for constructive dismissal.

The court found Gillis’ position was eliminated in a legitimate restructuring plan for business reasons, so Sobeys was within its rights to take that action. However, the demo co-ordinator job was a demotion and had a significant drop in salary, of about one-half, found the court. Because of this, only the assistant store manager position was a reasonable offer to avoid constructive dismissal.

The assistant store manager position was not a demotion, said the court, as it involved more responsibilities, more employees and a competitive, though lower, income. And the lump-sum payment would keep Gillis’ salary at the same level for one year following her transfer to ease the transition.

There was no reason for Gillis to feel embarrassed and humiliated by taking this job because it wasn’t unusual for Sobeys employees to move from head office to store positions and there would be an opportunity to become a manager quickly, said the court.

“If Ms. Gillis had been able to put aside her emotional responses, she should have realized this would not be a ‘step back,’” said the court.

Gillis also could not use child care as a reason to refuse the job, said the court. Sobeys often accommodated the family needs of employees and it was likely her hours as an assistant store manager would not affect her too much. If she had seriously considered the job, Gillis might have realized there would be some accommodation, said the court.

Sobeys wanted to maintain the employment relationship with Gillis, it said. The assistant manager position it offered was a reasonable solution following the elimination of her position and did not change the fundamental terms of her long-standing employment.

As a result, there was no constructive dismissal and Gillis resigned her employment, found the court.

For more information see:

Gillis v. Sobeys Group Inc., 2011 CarswellNS 833 (N.S. S.C.).

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a sister publication to Canadian HR Reporter that looks at workplace law from a business perspective. For more information, visit www.employmentlawtoday.com.

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