Constructive dismissal or an expected part of the job for company with multiple offices?
Question: We are an Ontario employer with eight different locations. The furthest two sites are each within one hour’s drive of the next closest. Due to funding and/or service requirements, from time to time we move an employee’s base office with usually one month notice. Is this considered constructive dismissal? How should this be handled?
Answer: There is a constructive dismissal any time one of the parties unilaterally makes a change to the employment contract that fundamentally alters the employment contract without providing reasonable notice of the change.
The change must be unilateral. Generally it is the employer who wants to unilaterally alter the contract. The only significance of that fact is that the employee will usually have the burden of proving there was a constructive dismissal.
The change to the employment contract must also be fundamental. The geographic transfer must be such that the contract between the parties has been fundamentally altered. For example, if the move is across the street it is not a fundamental change.
There must be an actual change to the contract. If there is an express term in the contract that an employee will be required to move around as part of her employment, then she has agreed to the transfer and cannot argue the contract has been altered. If there is no such express term, then a court may still find there was such an implied term in the contract if employee movement is common as part of the job.
The Saskatchewan Court of Appeal in Jim Pattison Industries Ltd. v. Page reviewed all of the circumstances to determine whether or not an implied term requiring the employee to transfer to a different location existed and other courts will do the same in similar circumstances. According to Ellen E. Mole in Wrongful Dismissal Practice Manual, some of the relevant factors to consider when determining whether an implied term exists include:
•The size, number of branches, area of operation, home base and number of employees of the employer.
•The importance of job transfers within the employer's business structure — whether transfers are a way of life.
•The level at which the employee is employed and her job history with the employer, including whether the employee has acquiesced to prior job transfers;
•The absence of undue hardship to the employee and the existence of good faith on the employer's part.
The most important facts here are that there are eight locations; there is a one hour drive to get to the furthest sites; any transfer is a result of operational requirements; transfers occur somewhat regularly; and there is one month’s notice provided. Any legal assessment based on these limited facts is not conclusive and should not be acted upon. Action should only be taken after consulting a lawyer who is aware of all the relevant facts in the province where the employer is located. Understanding that the assessment is based solely on these limited facts, there may not be a constructive dismissal.
Even if there is not an express term in the employment contract, there may be an implied term. This is because the distance is not significant and there would be a limited disruption to the employee’s life. For example, if the employee is married and has children, she could co-ordinate a viable plan to ensure the children do not have to change schools and her partner would not have to find a new job. Also, the transfer is a result of the company’s operations requirements, so to maintain effective operation and remain competitive, transferring employees is required.
The fact there are eight office locations and transfers occur somewhat regularly between them suggest that if the employee has already been transferred once, then she has, in a sense, already acquiesced to such a change in the employment circumstances. If she has not yet been transferred, then she will have likelyseen other employees transferred and she should expect to be transferred at some point as part of being an employee for this company.
Of course, there is never a guarantee a court will not find a constructive dismissal. For example, if the transfer is in conjunction with other changes in the employment situation, such as a demotion or a decrease in pay, these factors would increase the likelihood there would be a finding of constructive dismissal. In addition, if the transfer involves significant hardship to the employee, this also increases the chances there would be a finding of constructive dismissal.
In answer to the second part of the question, some things an employer can do, either alone or in combination, to decrease the risk of a constructive dismissal are:
•Include a provision in the employment contract including transfers as a term of employment.
•Do not transfer an employee as part of a demotion or pay decrease;
•Provide assistance for any hardship that occurs to the employee, including paying for some of the moving expenses or a bonus to assist in a familial relocation and assistance for increased travel expenses.
For more information see:
•Jim Pattison Industries Ltd. v. Page, 1984 CarswellSask 139 (Sask. C.A.).
Brian Kenny is a partner with MacPherson Leslie and Tyerman LLP in Regina. He can be reached at (306) 347-8421 or [email protected].
Answer: There is a constructive dismissal any time one of the parties unilaterally makes a change to the employment contract that fundamentally alters the employment contract without providing reasonable notice of the change.
The change must be unilateral. Generally it is the employer who wants to unilaterally alter the contract. The only significance of that fact is that the employee will usually have the burden of proving there was a constructive dismissal.
The change to the employment contract must also be fundamental. The geographic transfer must be such that the contract between the parties has been fundamentally altered. For example, if the move is across the street it is not a fundamental change.
There must be an actual change to the contract. If there is an express term in the contract that an employee will be required to move around as part of her employment, then she has agreed to the transfer and cannot argue the contract has been altered. If there is no such express term, then a court may still find there was such an implied term in the contract if employee movement is common as part of the job.
The Saskatchewan Court of Appeal in Jim Pattison Industries Ltd. v. Page reviewed all of the circumstances to determine whether or not an implied term requiring the employee to transfer to a different location existed and other courts will do the same in similar circumstances. According to Ellen E. Mole in Wrongful Dismissal Practice Manual, some of the relevant factors to consider when determining whether an implied term exists include:
•The size, number of branches, area of operation, home base and number of employees of the employer.
•The importance of job transfers within the employer's business structure — whether transfers are a way of life.
•The level at which the employee is employed and her job history with the employer, including whether the employee has acquiesced to prior job transfers;
•The absence of undue hardship to the employee and the existence of good faith on the employer's part.
The most important facts here are that there are eight locations; there is a one hour drive to get to the furthest sites; any transfer is a result of operational requirements; transfers occur somewhat regularly; and there is one month’s notice provided. Any legal assessment based on these limited facts is not conclusive and should not be acted upon. Action should only be taken after consulting a lawyer who is aware of all the relevant facts in the province where the employer is located. Understanding that the assessment is based solely on these limited facts, there may not be a constructive dismissal.
Even if there is not an express term in the employment contract, there may be an implied term. This is because the distance is not significant and there would be a limited disruption to the employee’s life. For example, if the employee is married and has children, she could co-ordinate a viable plan to ensure the children do not have to change schools and her partner would not have to find a new job. Also, the transfer is a result of the company’s operations requirements, so to maintain effective operation and remain competitive, transferring employees is required.
The fact there are eight office locations and transfers occur somewhat regularly between them suggest that if the employee has already been transferred once, then she has, in a sense, already acquiesced to such a change in the employment circumstances. If she has not yet been transferred, then she will have likelyseen other employees transferred and she should expect to be transferred at some point as part of being an employee for this company.
Of course, there is never a guarantee a court will not find a constructive dismissal. For example, if the transfer is in conjunction with other changes in the employment situation, such as a demotion or a decrease in pay, these factors would increase the likelihood there would be a finding of constructive dismissal. In addition, if the transfer involves significant hardship to the employee, this also increases the chances there would be a finding of constructive dismissal.
In answer to the second part of the question, some things an employer can do, either alone or in combination, to decrease the risk of a constructive dismissal are:
•Include a provision in the employment contract including transfers as a term of employment.
•Do not transfer an employee as part of a demotion or pay decrease;
•Provide assistance for any hardship that occurs to the employee, including paying for some of the moving expenses or a bonus to assist in a familial relocation and assistance for increased travel expenses.
For more information see:
•Jim Pattison Industries Ltd. v. Page, 1984 CarswellSask 139 (Sask. C.A.).
Brian Kenny is a partner with MacPherson Leslie and Tyerman LLP in Regina. He can be reached at (306) 347-8421 or [email protected].
