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Push and pull factors in constructive dismissal

Isn’t it the employee’s choice to leave or stay?

By Jeffrey R. Smith

Scenario: An employer knows of somebody who’s available that it really wants to fill a certain position. However, there’s already somebody in that position and that employee doesn’t really want to leave. The employer knows the available candidate would be better in the position and it would be better for the business. Is there an easy way to get the existing employee out of the way? Probably not, unless the employer wants to terminate the employee outright and pay all the necessary amounts of money in lieu of notice. Even shifting the employee to another position could be trouble.

If the employer wants to avoid dismissal costs, the existing employee could be shifted to another position. But it must tread lightly, because if it could be seen as a make-work job or something below what the existing position is, it could be a case of constructive dismissal — even if the employee’s salary doesn’t change. Or should it matter as long as the employee is still being compensated the same?

Three years ago, Nissan Canada moved a senior manager of sales and sponsorships into a new role, which it created for him, called senior manager of vehicle participation programme. Immediately after, a former Nissan executive was brought back to fill the sales and sponsorships position.

The employee’s salary in the new job remained the same, but he wasn’t given a budget or specific job description. Also, where he had several employees reporting to him before, he had none in the new position. What rankled him the most was that he had to vacate his office and move to a cubicle where everyone could see him. Though Nissan told him it would arrange for office space, nothing ever came of it.

After a couple of months, with still no defined role or budget, the employee filed for constructive dismissal. The Ontario Superior Court of Justice agreed with him, finding that even though his pay didn’t change, the employee visibly lost status in the company and went from a leadership position to one with no management responsibilities. Though the employment contract mentioned the possibility of transfers, the new position didn’t fit within those parameters and was in fact a demotion, said the court (Jodoin v. Nissan Canada Inc., 2013 CarswellOnt 12416 (Ont. S.C.J.)).

Constructive dismissal can be a tricky thing. Of course, employers want to be able to have control over their business and staffing and have who they want in their positions. And they can, but they can’t circumvent their termination obligations by putting someone in an undesirable job and hope he quits. On the other hand, wrongful dismissal damages are meant to cover the loss employees experience between losing one job and finding another. Ultimately, people work to support themselves and their families.

If an employee is moved to a position he doesn’t like but is still getting paid the same — and no active attempts by the employer to make the employee miserable — should it be the employee’s option to keep working or look for another job without liability on the employer’s part?

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective. He can be reached at or visit for more information.

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Jeffrey R. Smith

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective.
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