The Cost of Constructive Dismissal

Date: 2007
Author: Daniel A. Lublin
Publication: Metro

Cumulative demotion leads to damages

Not many men have both good fortune and good sense. ~ Titus Livy
Jean-Louis Drapeau was the consummate company man.  But when his job was gradually eroded, his loyalty quickly turned to fury.  Believing that his demotion was tantamount to a dismissal, Drapeau fled and then proceeded to sue his ex-employer.  His belief was vindicated at trial.
For six years Drapeau worked hard to satisfy his employer’s thirst for sales, helping to bolster profits by nearly 400%.  Despite his all-star figures, Drapeau’s employer, Spielo Manufacturing, had formed a different view – slowly chipping away at Drapeau’s authority and status.
Drapeau’s undoing at Spielo began after a major reorganization left him with a reduced role.  Drapeau complained to the CEO, Jon Manship, but to no avail.
Later, Drapeau was told not to attend an important planning meeting.  Slowly, his authority regarding other employees was diminished.
But the straw that broke the camel’s back occurred when his supervisor’s assistant was sent to tell him that he was no longer authorized to sign documents on behalf of Spielo.  Feeling humiliated, and unable to carry on, Drapeau considered that the cumulative reductions to his job were, in effect, tantamount to his dismissal.
Recently, a judge in New Brunswick agreed with Drapeau and awarded him damages for constructive dismissal.  The cumulative effect of the changes to Drapeau’s job had fundamentally changed the nature of his position.  Drapeau was entitled to treat himself as dismissed and recover his losses – including his legal fees.
The lessons for employees are indispensable:

  • Courts don’t confine the doctrine of constructive dismissal to a single or readily identifiable change to an employee’s job.  In Drapeau’s case, the cumulative effect of various job alterations led to the inescapable conclusion that he had been demoted.
  • Where changes are imposed, not every employee can simply pack up his or her belongings and place a call to their lawyer’s office.  To do so flirts with disaster.  The changes must be obvious, negative and substantial – and must be so in the eyes of the judge, not just the litigants.
  • An employee who consents to or condones significant changes can not cry foul if the aftermath proves less than desirable.  The Judge rejected Spielo’s assertion that by lingering after the reorganization, Drapeau had simply agreed to the changes.  Some form of protest must be registered.
  • Employees with valid grievances may even have to remain in the altered position or risk having their damage award reduced or negated altogether.  In order to prevent employers from succeeding with this legal defence, specialized employment counsel should always be consulted.