If locations are close, is it easy to move employees between them?
Question: Our company has two retail locations in the same mall. Can we unilaterally transfer employees between the locations without any consideration, since the locations are so close together?
Answer: Not necessarily. This question requires consideration of the law of constructive dismissal. A constructive dismissal occurs when an employer makes a unilateral and fundamental change to terms or conditions of employment without providing reasonable notice of that change to the employee. A constructive dismissal amounts to a repudiation of the employment by the employer, whether or not intentional.
The test for determining whether an employee has been constructively dismissed is an objective one (a reasonable employee in like circumstances) and essentially a question of fact. The employee’s perception of the employer’s conduct is not determinative. Rather, the court must ask whether a reasonable person, in a similar position as the employee, would have concluded the employer had substantially changed an essential term of the employment contract.
In this instance, a court would likely find this unilateral change was minimal and not fundamental. The change of location within the same mall will not, on its own, result in any breach of an essential term of the contract. A change of location to another mall could be a fundamental change. An employment standards decision that illustrates this point is Vincent v. Group 4 Falck Canada Ltd., where the employer changed the employment location from Niagara Falls to Mississauga, Ont., or Hamilton. The new location would require a commute from Niagara Falls to either of these locations and meant additional expenses that would be borne by the employee. This, the Ontario Labour Relations Board said, amounted to a constructive dismissal.
But a different product and different opportunity for commission income, even if the commission structure was the same, could lead to finding that fundamental change has occurred.
Even if there are factors that would tend to support a substantial change, employees are under an obligation to mitigate their losses by staying on the job (Evans v. Teamsters) or accepting an offer of alternative employment. Although determinations as to whether an employee has mitigated her losses is done on a case-by-case basis, where there is no animosity between the parties, even when the change results in a demotion, an employee has a positive obligation to accept continued employment. A decision that illustrates this point is Loehle v. Purolator Courier Ltd., where an employee was found constructively dismissed but no damages were awarded. The Ontario Superior Court of Justice found the employee failed to mitigate his damages, because a reasonable person would have accepted the position offered, notwithstanding the demotion, until alternative employment elsewhere was obtained. The court noted that searching for a comparable position with another company while working should be less difficult than searching during a period of unemployment.
For more information see:
•Vincent v. Group 4 Falck Canada Ltd. (Aug. 11, 2006), Doc. 3801-05-ES (Ont. L.R.B.).
•Loehle v. Purolator Courier Ltd., 2008 CarswellOnt 3636 (Ont. S.C.J.).
•Evans v. Teamsters, Local 31, 2008 CarswellYukon 22 (S.C.C.).
