Constructive Dismissal

Duty to Provide Employment

The B.C. Court of Appeal considered this issue of whether the removal of active employment duties may lead to a constructive dismissal claim. 1 Two authorities had been submitted by the employer to advance this submission, which the Court of Appeal noted, were seemingly stale dated, yet the Court considered this proposition in any event. Even were these cases reflective of current law, these decisions, the Court noted, excepted two classifications.

The first of these qualifiers were cases where there is a benefit to the employee in performing the duties, such as an actress or radio or television performer. The second is a position by which the employee receives additional compensation, referring in this instance to bonus payments, by the performing of the contract.

In this case, the Court found both exceptions applied to the plaintiff. The decision concluded that the plaintiff’s reputation depended upon his performance in the job and further that his bonus payments also depended on the same.

The Court also found that the contract contemplated that the plaintiff would have duties to perform. The Board may be able to amend them, but not eliminate them. The Board, in appointing a management committee to run the day to day functions of the company, breached the contract.

This decision was argued unsuccessfully, at trial, in Potter. The trial applied the “traditional common law principle” that there was not necessarily a duty to provide work. The exceptions, as above, were noted and not applied by the trial decision.

The Supreme Court of Canada set new law on this subject, although it did state that its decision was not based solely on this issue. It stated that the former law was outdated and not to be followed: 2

In my view, even if the exceptions under which an employer would be required to provide an employee with work do not apply, the employer does not have an unfettered discretion to withhold work. To the extent that the proposition that the employer’s discretion is absolute was ever valid, it has been overtaken by modern developments in employment law.

The Court referenced the now famous words of the former Chief Justice, obiter when first stated, as follows:

Work is now considered to be “one of the most fundamental aspects in a person’s life, providing the individual with a means of financial support and, as importantly, a contributory role in society. A person’s employment is an essential component of his or her sense of identity, self-worth and emotional well-being” (Reference re Public Service Employee Relations Act (Alta.), 1987 CanLII 88 (SCC), [1987] 1 S.C.R. 313, at p. 368). 

The decision continued:

Thus, it is clear that the benefits derived from performing work are not limited to monetary and reputational benefits.

This may not be determined as a general rule. There may be situations where an employer may reduce workload due to a shortage of work, that is, for legitimate business reasons. The principle that the employee must show one of the two exceptions was discarded:

However, I reject the proposition that an employer can refuse to provide work to an employee to whom the exceptions discussed above do not apply — let alone suspend and replace such an employee — for just any reason. That would undermine the non-monetary benefit all workers may in fact derive from the performance of their work. It would also be inconsistent with the employer’s duty of good faith and fair dealing that has been gaining acceptance at common law…

Potter was a case of an administrative suspension, which results in different considerations from the typical case where the employee is stripped of their active responsibilities, with no assertion of the right to suspend. One would expect that such action in this context would be more severely judged.

Potter was decided in March of 2015. Earlier cases should not be considered as authoritative.