Employee goes too far with constructive dismissal threat

Employee didn’t like changes to job and threatened legal action; employer took it to mean she didn’t want to work there anymore

A Nunavut employer did not constructively dismiss an employee when it made minor changes to her job duties and it was the employee’s threat of a constructive dismissal suit in response to those changes that ended the employment relationship, the Nunavut Court of Appeal has ruled.

Sarah Kucera was hired on July 1, 2009, as an executive assistant to the president of Qulliq Energy Corporation, a Crown corporation responsible for the delivery of electrical power in the territory of Nunavut. The president’s office was in Iqualuit and Kucera moved from Toronto to take the job.

Before too long, Kucera began having difficulties with Qulliq’s director of human resources, who was based in another town. When they met, the director of HR said there were concerns about the trustworthiness of the corporate legal counsel and the corporate secretary — two people with whom Kucera worked closely.

In early September 2009, Kucera forwarded an email she had received from the director of HR about arrangements for a board of directors meeting to the corporate secretary. The director of HR reprimanded Kucera for passing along the email and reminded her of their conversation about the corporate secretary’s suspect trustworthiness.

Functional review led changes in duties

In the fall of 2009, Qulliq conducted a functional review of its staff and some positions, including Kucera’s, were downgraded. Kucera's salary and annual raises weren’t affected, but her duties related to the collection and distribution of briefing notes for the minister were changed.

When the corporate secretary position became vacant, Kucera assumed its duties for a six-month probationary period. At the end of the six months, she received positive evaluations and a salary increase for performing the additional duties.

Unfortunately for Kucera, her relationship with the director of HR continued to worsen, though it seemed overall the corporation respected her — Kucera was asked to be a part of Qulliq’s bargaining team for the next round of negotiations with the union.

In April 2010, the director of HR drew up a complaint of harassment against Kucera — of which Kucera was not aware at the time it allegedly happened. The HR director proposed mediation but Kucera declined, saying it was a “sham” because the proposed mediator reported to the HR director.

In June, Kucera received a letter from the president of Qulliq that addressed her job expectations, clarified her terms of employment and outlined the process for performance reviews and dealing with complaints. Soon after, while she was on vacation, she received an email advising her the position of corporate secretary — in which she had expressed an interest — was posted but would close before she returned. When Kucera did return from her vacation, she discussed it with the president. He agreed to extend the date for applications but Kucera ultimately decided not to apply for the job.

Kucera was uncertain of her future with Qulliq and took sick leave. During her sick leave, she consulted with a lawyer regarding a potential lawsuit against the corporation for the changes to her job.

On Aug. 5, Kucera’s lawyer sent a letter to Qulliq outlining “the removal of core duties from her position and a process of progressive marginalization from the decision making process of the corporation.” The letter listed several events including “significant changes in terms of her duties, responsibilities and reporting structure, such that her overall authority and position with the corporation have been diminished.” It concluded by stating that Kucera was in position to sue for constructive dismissal and, if Qulliq didn’t want to continue with her employment, she would be willing to negotiate a termination package. Kucera also indicated that, in the event Qulliq wanted to end the relationship, she would be willing to stay in her position for as long as necessary for negotiations for a severance package to take place and were making progress.

Qulliq replied by denying any actions to marginalize and change the nature of Kucera’s duties and said she was expressing “not only your unwillingness to remain loyal and committed to your employment… but also demonstrates clear insubordinate behaviour such that Qulliq is unable to continue to place any level of faith in your intentions any longer.” The corporation said its trust and confidence in Kucera, which was essential to the position of executive assistant to the president, was irreparably broken and the threat of a constructive dismissal suit provided just cause for dismissal. Qulliq terminated Kucera’s employment effective Aug. 23.

Kucera filed her lawsuit for constructive dismissal and Qulliq responded by arguing her letter asserting constructive dismissal was “for the sole purpose of extracting severance payment from (Qulliq) in the face of her own resignation.”

The Nunavut Court of Justice agreed with Qulliq, finding Kucera had not been constructively dismissed and her letter was a repudiation of the employment relationship, which allowed Qulliq to terminate the employment relationship. Kucera received a salary increase for taking on extra duties and her salary didn’t change from the downgrade of her position. In addition, the employer should have some flexibility to restructure a position in response to changes in circumstances and the only aspect of Kucera’s job that really changed was spending less time on preparing materials for the Minister of Energy — but not a complete loss of that responsibility, said the trial court.

Kucera also claimed her working environment was hostile, but the trial court found the difficulties between Kucera and the HR director were simply the result of an interpersonal conflict that wasn’t enough to create conditions leading to constructive dismissal — especially since the relationship between them was professionally supportive of Kucera at times.

Employee’s letter repudiated employment contract: Court

The trial court also found Kucera’s letter wasn’t an attempt to resolve her differences with Qulliq but made clear she no longer wanted to work there. There was no option in the letter for things to be resolved and for Kucera return to work permanently, said the trial court.

In addition, the trial court agreed Kucera’s position made her privy to sensitive and confidential information and required a significant amount of trust by her employer. The letter from Kucera's lawyer essentially eliminated a chance Qulliq could trust her again and therefore was a repudiation of the trust-dependent employment relationship, the court said.

Kucera appealed to the Nunavut Court of Appeal, arguing that the trial court, in finding no constructive dismissal, failed to determine whether she was dismissed without cause.

The appeal court agreed with the trial court’s findings that the letter from Kucera’s lawyer was not an attempt to resolve the differences Kucera had with her employer and the only option it provided for was to negotiate a severance package — and that she would continue to work for Qulliq only until an agreement on a severance package was reached.

“At no point does the letter indicate that Ms. Kucera is prepared to remain in her employment; this is not the letter of an employee who was ready, able, and willing to continue in her current position,” said the appeal court. “Rather, it was the letter of an employee who had purported to impose unilaterally upon the employer a new agreement — that she would continue in her current position only so long as, first, the employer participated in negotiations designed to bring about an end to the employment relationship, and secondly, such negotiations appeared to the employee to be ‘making progress.’”

Both courts also noted Kucera had sent copies of the letter to members of the board as well as the Minister of Energy, which was an attempt on her part to politicize the matter and was “incongruous with a continuing employment relationship.”

The appeal court upheld the trial court’s finding that Kucera’s letter was a repudiation of the employment contract and Qulliq’s response the next day was an acceptance of that repudiation. As a result, there was no constructive dismissal, said the appeal court.

The appeal court also found once the trial court determined there was no constructive dismissal and Kucera instead repudiated her employment contract, there was no need for it to examine the issue of whether Kucera was dismissed without cause.

The appeal court upheld the trial court’s decision that there was no constructive dismissal and it was Kucera who terminated her employment.

For more information see:

Kucera v. Qulliq Energy Corporation, 2015 CarswellNun 12 (Nun. C.A.).

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