1. Recent Developments in the Law of Constructive Dismissal HRPA HR LAW CONFERENCE October 22, 2014 Jeffrey S. Percival, Head of Employment & Labour Practice Group

2. Constructive Dismissal The employer does not fulfill the essential obligations of the employment contract (Farber v. Royal Trust SCC 1997) The employee can treat the contract as at an end and sue for damages (note employee duty to mitigate – Evans v. Teamsters SCC 2008)

3. Recent Issues & Developments 1. Unilateral increases to employees’ duties 2. Temporary layoffs due to financial difficulties 3. Failure to pay a negotiated bonus 4. Indefinite paid suspensions

4. Unilateral Increases to Duties Damaso v. PSI Peripheral Solutions Inc. (ONSC, 2013)  Does an employee’s eventual resignation following an employer’s unilateral increase in his or her duties amount to constructive dismissal?  The Court found that while employers are entitled to some flexibility, significant additional duties cannot be unilaterally added to an employee’s original responsibilities

5. Temporary Layoffs due to Financial Difficulties Trites v. Renin Corp. (ONSC, 2013)  Can a financially struggling employer impose a temporary layoff on an employee without an express/implied term in the contract?  Court held that the employee had not been put on a “temporary layoff” within the meaning of the ESA, as there was no continuation of benefits or other substantial payments

6. Failure to Pay a Negotiated Bonus Piron v. Dominion Masonry Ltd. (BCCA, 2013)  Does an employer’s failure to pay a large bonus to an employee amount to constructive dismissal, despite the bonus not being an explicit term of the contract?  While oral negotiation of the bonus was not included in the contract, the right to payment of a bonus was implicitly conferred through verbal negotiations

7. Indefinite Paid Suspensions Potter v. New Brunswick Legal Aid Services Commission (NBCA, 2013)  Appeal to the Supreme Court of Canada was heard in May 2014 - reserved  Issues:  (1) whether indefinite paid suspension amounts to constructive dismissal – NBCA upheld no  (2) whether an employee may treat the employment contract as repudiated and sue the employer while under indefinite paid suspension – NBCA upheld no

8. Questions?