The test required is to show a fundamental or substantive change. In this respect, it is  similar, if not identical, to that required, in concept, in a constructive dismissal argument, albeit in the reverse direction.

Both submissions involve the same basic precept, show a reason why the existing relationship has been dramatically altered to such a degree that a remedy may follow, based on a finding that the status quo no longer prevails.

Hence in this context, the moving party must show a fundamental change, not merely a change in title or an insignificant increment in responsibilities.

The Supreme Court of Canada defined the test for a constructive dismissal in its 1997 decision in Farber v Royal Trust, as follows:

Thus, it has been established in a number of Canadian common law decisions that where an employer unilaterally makes a fundamental or substantial change to an employee’s contract of employment -- a change that violates the contract’s terms -- the employer is committing a fundamental breach of the contract that results in its termination and entitles the employee to consider himself or herself constructively dismissed.  The employee can then claim damages from the employer in lieu of reasonable notice.

The principle is the same. In either instance, the plaintiff seeks a remedy based on the assertion that the original contract no longer applies.

Madam Justice Blair considered this issue in Wernicke v Altrom, a decision made in November of 2009. It is to be noted that the claim failed for other reasons, and hence this ratio is strictly obiter, but nonetheless is informative.

Precedent cases were reviewed, such as Dolden v Clark Simpkins in which the plaintiff was hired as a part-time assistant earning a modest wage to a business manager, earning more than five times her starting salary. ¹

Similarly in Schmidt v Amec, as referenced in Wernicke, the trial judge described the revisions effected changed the position “dramatically” while the company’s business was changing “radically”.

In the same decision of Schmidt, Madam Justice Gerow wrote that “the substratum of the Agreement…had completely disappeared and it can be inferred that the Agreement was never intended to apply to the circumstances that existed at termination”. The test, as was cited in Schmidt was “fundamental change”.

The test used by the Ontario Court of Appeal in Wallace v TD Bank, comments in which are noted above, was “where an employee’s level of responsibility and corresponding status has escalated so significantly”. ²

On the facts in Wernicke, the evidence was found not to support a substratum argument. The change in title from controller to Chief Financial Officer was not seen as fundamental, given the initial job description of responsibility for the entire accounting and financial function. There was no corresponding change in compensation. The title change was seen to be reflective only as a recognition and appreciation.