Was promotion constructive dismissal?

This instalment of You Make the Call takes a look at a case where an employee turned down a promotion and subsequently lost his job. The British Columbia Supreme Court was faced with the question of whether the worker quit or if he was constructively dismissed.

Howie Parks worked at the Vancouver International Airport Authority from May 1, 2000, to Dec. 2, 2003, in a middle management position. He was the superintendent for Airport South. On Nov. 18, 2003, Parks was told he was being promoted to the position of shift manager, airport operations, as part of a reorganization that involved a number of management employees. He was also told that due to the number of people involved in the shuffle, the change was not optional.

Parks did not view the change as a promotion and had concerns about the pay, hours of work and job description. His old position had him working Monday to Friday from 7 a.m. to 4 p.m. The hours for the new position weren’t set, but it was expected he would be available around the clock seven days a week.

His former base salary was $69,500 plus a fixed bonus of $4,500 per year and $5,000 in shift premiums for a total of $79,000 per year. Parks said this amount was guaranteed. In the new position, his base salary was the same but it was unclear if the shift premium would remain and the bonus could range from zero to 15 per cent of his salary. He would also be responsible for supervising 30 more employees.

On Dec. 2, following discussions with his supervisors, Parks said he would not accept the new position. His employment was terminated.


You make the call

Was Parks constructively dismissed?
OR
Did he resign from his position by not taking the promotion?

If you said Parks was constructively dismissed, you’re correct. The B.C. Supreme Court said an employer cannot make fundamental and unilateral changes to a contract of employment unless such changes are specifically permitted by the contract of employment.

“This principle applies even if the change is a promotion,” the court said.

While employers are free to reorganize and restructure their businesses as they see fit, they must reach a new contract of employment with employees who are fundamentally affected by the reorganization or give adequate notice to them (unless the contract of employment specifically permits it).

Parks took the position that the proposed promotion would have resulted in severe fundamental changes to his contract of employment, including material changes to the compensation structure, the days and hours worked and the imposition of additional duties.

“I agree with Mr. Parks that it was reasonable to infer that what he was being offered was a job where the remuneration could potentially be more than he was making, but could also potentially be less,” the court said. “He was required to trade a more certain base salary for a potentially greater bonus.”

The court said the changes in his duties, compensation and hours were sufficient to constitute a breach of the fundamental terms of his employment. And there was no negotiation and no choice for Parks in the matter.

The court awarded him five months’ salary of $31,041.67. It also awarded special damages of $1,621.77 for his medical expenses because the Airport Authority stopped his benefits immediately after termination.

The court refused to deduct anything from that amount for his failure to mitigate his damages by finding another job. Parks didn’t start looking for work immediately, but the court said that was understandable because he was upset and the dismissal happened just before Christmas. When Parks began his job search, he quickly found a position with the RCMP at a salary of $69,271 and was shortly promoted to a position paying more than $85,000.

For more information see:

Parks v. Vancouver International Airport Authority, 2005 CarswellBC 3519 (B.C. S.C.)

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