Moving an employee to fix a poisoned work environment
Question: If an employer wants to move an employee to a different position and department to try to fix a poisoned environment in his existing department, is there a risk of constructive dismissal? Or does the employer’s obligation to try to make things better for the other workers take precedence?
Answer: An employer must exercise caution when moving an employee from one position or department to another, even if the move is with the intention of fixing a poisoned work environment. When an employer makes any fundamental change to terms and conditions of employment, the employer runs the risk of being held liable for constructive dismissal.
For example, in a recent decision of the Ontario Court of Appeal (Chandran v. National Bank of Canada), a senior bank manager was informed that several employees had made unsolicited complaints about his behaviour and that, accordingly, he was to be transferred to either of two positions and have his supervisory responsibilities curtailed.
Chandran claimed constructive dismissal. The bank had claimed in the alternative that it had “just cause” if constructive dismissal was found, but it withdrew this alternative pleading. The Ontario Supreme Court of Justice found that “any reasonable person in (Chandran’s) position being presented with the disciplinary letter concluding that he was guilty of serious misconduct, being removed from his position, and offered positions of lesser grades, where the supervisory duties were removed, would conclude that the essential terms and conditions of employment were substantially changed.” The court rejected the Bank’s argument that, given the unsolicited complaints, the proposed transfer was reasonable and held that the right of an employer to transfer an employee is subject to the law of constructive dismissal.
In rendering the decision, the court distinguished the Manitoba Court of Queen’s Bench case of Dykes v. Saan Stores Ltd. In Dykes, the employer was said to have been justified in transferring an employee in response to complaints from other employees because the transfer was lateral (but would no longer involve supervisory responsibilities) and because the employee denied but did not challenge the complaints.
Employers clearly have a duty to identify and correct a poisoned work environment. In fact, an employer may be found to have constructively dismissed a harassed or bullied employee if the employer refused to take steps to address such allegations. However, an employer whose investigation reveals a poisoned work environment must fashion its response in keeping with other legal principles, such as constructive dismissal. If the remedy involves fundamentally changing the terms and conditions of the employment relationship, regardless of the reason, the employer opens itself up to liability for constructive dismissal.
Having said that, if the employee is the one creating the poisoned work environment, the employer may have just cause to support dismissing the employee. If the employer does not dismiss, but only transfers the employee, the employer could potentially use a just cause defence to any allegation of constructive dismissal.
For more information see:
•Chandran v. National Bank of Canada, 2011 CarswellOnt 2795 (Ont. S.C.J.).
•Dykes v. Saan Stores Ltd., 2002 CarswellMan 171 (Man. Q.B.).
