Constructive Dismissal? – What Would a “Reasonable Person” Think?


When fundamental changes are implemented by a company, many employees rightly raise concerns about whether this is constructive dismissal. But what about the working environment – can a less than ideal working environment result in a constructive dismissal situation? In Lawrence v. Norwood Industries Inc., [2016], O.J. No. 4987 (“Lawrence”), the Ontario Superior Court of Justice determined that a working environment that was “far from ideal” was insufficient to constitute constructive dismissal and more importantly, not the true reason for the employees’ refusal to return to work.

In Lawrence, a husband and wife, Kenneth and Sylvia, had worked for Norwood Industries Inc. (“Norwood”) for approximately 15 years. After approximately 15 years of employment, Sylvia was informed by Norwood that she, along with all warehouse employees, would now be required to start work at 7:00 a.m. instead of 8:30 a.m. Kenneth was unaffected by this change as he worked in the office. Sylvia informed Norwood that she would not agree to begin work earlier than 8:30 a.m. A few weeks later on a Friday, Sylvia received a Letter of Reprimand for arriving late to work, declining to work overtime and her overall attitude. Sylvia refused to sign the Letter of Reprimand and informed Norwood that she would not take direction from the new Warehouse Manager as she had been with Norwood longer than the new Manager and “he could not tell her what to do”. Norwood informed Sylvia that she needed to change her attitude and accept the new policies being implemented by the company. Sylvia became upset and when Kenneth became aware of the situation he also became upset. The following Monday Kenneth informed Norwood that he and Sylvia would not be returning to work but did not provide a reason. Kenneth and Sylvia later brought an action for constructive dismissal, alleging that the warehouse conditions were unsafe (due to clutter of products, the presence of mice and bats, including some feces, fluctuating temperatures and undrinkable water in the bathroom) and that the conduct of Norwood, including providing the Letter of Reprimand, constituted fundamental changes to their employment resulting in their employment being constructively dismissed.

The Court held that while the working conditions were less than ideal, they were not as extreme as described by Kenneth and Sylvia in the action. Further, neither Kenneth nor Sylvia raised concerns to Norwood about the working conditions while they were employed. Accordingly, the Court determined that the working conditions were not the real reason for Kenneth and Sylvia refusing to return to work – the Letter of Reprimand was the true reason. The Court noted that to establish a case of constructive dismissal Kenneth and Sylvia were obligated “to prove on a balance of probabilities that a reasonable person in their position would have concluded that the conduct on the part of Norwood when viewed objectively constituted a fundamental change to the terms of employment to justify a conclusion that they were constructively dismissed from their employment.” The Court noted that while Sylvia subjectively viewed that she was being treated unfairly by Norwood, the Letter of Reprimand was an appropriate response to Sylvia’s insubordination by her refusal to follow the instructions of the new Warehouse Manager. Further, Sylvia’s refusal to return to work after receiving the Letter of Reprimand was not an appropriate response from an objective standpoint. The Court determined that a “reasonable person” would not have concluded that Norwood’s conduct constituted a constructive dismissal and therefore, the action on behalf of both Kenneth and Sylvia was dismissed.

Lessons for Employees

Any concerns about the working environment or other changes being proposed by an employer should be promptly raised by an employee. The failure to object to working conditions and changes in a prompt manner and while still employed may have a negative impact on the employee’s entitlements later on. Employees must be very careful that they can establish that a “reasonable person” would objectively view the conduct of an employer as giving rise to a constructive dismissal situation. A subjective response by an employee will likely be insufficient to meet the obligation on an employee to prove a case of constructive dismissal. Further, sometimes disciplinary action by an employer is warranted and will not be viewed as inappropriate by the Courts. Employees should obtain legal advice before they refuse to return to work so that a proper assessment can be made before action is taken by the employee that may not be in their overall best legal interests.

Lessons for Employers

Employers should be aware that disciplinary action may be taken against employees when required and if done appropriately, this should not result in a constructive dismissal situation. Employers should ensure that a working environment is safe for employees and to promptly address any concerns raised by employees regarding the working environment to avoid any claims for constructive dismissal. For guidance when these situations arise, it is recommended that employers obtain the advice of an experienced employment lawyer as to how best to proceed prior to responding to any concerns raised.

Minken Employment Lawyers is your source for expert advice and advocacy on today’s employment law issues. Whether you are an employer or an employee, we can help. Contact us to see how.

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