An assessment must be made of the gravity of the breach to determine if it has reached termination grade. This is the second component of the Type A test in Potter. One Ontario case in 2007 looked to the extent of the change in total compensation which had been effected by the employer. 2
In the same case, the court determined that a change in reporting structure would not have been sufficient to allow for a termination finding, nor was this a factor to be assessed in the entirety of the assessment. The analysis requires an assessment of whether the new position, objectively viewed, shows a sufficient reduction in status to be considered a demotion. 3
The test for whether there has been a sufficient reduction in status to amount to a demotion is objective and many factors are to be taken into account in assessing relative status in an organization. Although the final outcome of this argument was that there was no demotion, the trial judge did state:
Similarly, in this case, the reduction of duties in combination with the reduction in remuneration made it reasonable for Mr. Doran to conclude that he was constructively dismissed. The reduction in duties would also have impacted on Mr. Doran’s ability to earn the maximum AIP available to him and had the potential to further restrict his compensation.