In Brake v. PJ-M2R Restaurant Inc., the Ontario Superior Court of Justice found that a 62 year old Store Manager with approximately 13 years of service was entitled to 20 months’ notice as a result of constructively dismissing the employee’s employment.
Background
While the employee began working for McDonald’s restaurants in 1986, she began working for the employer PJ-M2R Restaurant Inc. in 1999. From 2000 to 2010 the employee received excellent performance reviews. However, in 2011 the employee received her first negative employment review. The employee was caught by surprise by this negative performance review as she was not provided with any indication that her employment was at risk or her performance as a Store Manager had negatively changed.
In 2012, the employee received a further negative performance review, and as a result, was placed on a progressive discipline program.
Following the conclusion of the progressive discipline programme, the employer took the position that the employee’s employment had not improved and provided the employee with two options: accept a demotion or resign.
The employee refused to accept a demotion and left her employment. Shortly thereafter, the employer sent the employee a letter informing that the employee’s employment was terminated for cause.
The employee initiated legal proceedings against the employer claiming constructive dismissal and seeking her common law notice entitlements.
Decision
The Ontario Superior Court of Justice found that the employer had “unilaterally made a substantial and fundamental change to [the employee’s] employment contract and in doing so constructively dismissed her without cause”. As a result, the Court stated, “Given [the employee’s] age, length and nature of employment, the manner in which she was dismissed by the employer, the low likelihood that she will ever attain a similar managerial position and the impact on her of being unjustly dismissed in the context of her character, reputation and circumstances” the employee was entitled to notice period of 20 months.
Lessons for Employers
Employer should be aware of this decision as it demonstrates the importance of properly addressing performance issues at the workplace. While performance reviews and progressive discipline plans are important tools that an employer can use to address performance issues at the workplace, they will not necessary permit an employer to terminate an employee’s employment for cause or allow a fundamental unilateral change to be made to an employee’s employment. Should an employer be experiencing performance issues with respect to an employee, they should obtain the advice of an experienced Employment Law Lawyer.
Lessons for Employees
While not all unilateral changes made by an employer will result in constructive dismissal, employees should be aware that the changes referred to above were found to entitle the employee to damages. As a result, employee should ensure that they obtain legal advice from an Employment Lawyer in the event that they are faced with a unilateral change at the workplace to determine whether such changes are tantamount to a constructive dismissal. Failure to do so in a timely manner may negatively impact on an employee’s ability to obtain damages resulting from such changes.
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