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WRONGFUL DISMISSAL - Evidence - Constructive dismissal

Monday, June 03, 2019 @ 10:53 AM  

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Appeal by the employer from a judgment that found the respondent employee was constructively dismissed. The respondent was a long-time account executive with the appellant. In 2015, the appellant created a new position of business development specialist and wanted the respondent to take the position. It gave guarantees and assurances about compensation. The respondent felt he was constructively dismissed and quit. The trial judge refused to allow the appellant to cross-examine the respondent on 2015 sales data that the appellant submitted would demonstrate the respondent’s income as the business development specialist would have been more than that of his previous position on the basis the evidence was irrelevant. She found the respondent was constructively dismissed by way of the appellant’s unilateral decision, which negatively affected his compensation and changed his duties. She concluded the respondent did not fail to mitigate his losses by staying with the appellant in the new position because his compensation would have decreased. She ordered the appellant to pay $103,616 based on a reasonable notice period of 16 months.

HELD: Appeal allowed; respondent’s action dismissed. The trial judge committed serious legal errors in restricting the cross-examination of the respondent on actual sales results and her decision to bar the introduction of the evidence. The evidence was relevant to whether the respondent was constructively dismissed and to mitigation. The trial judge erred in her application of the legal tests for constructive dismissal and the duty to mitigate. Her approach did not appreciate the magnitude of the unilateral change in terms of employment that satisfied the test for constructive dismissal and whether the appellant’s unilateral changes to the terms of employment were so substantial as to demonstrate an intention not to be bound by the employment contract. The appellant evinced no intention to no longer be bound by the employment contract. The respondent was not constructively dismissed and failed to mitigate his damages.

Clarke v. Halifax Herald Ltd., [2019] N.S.J. No. 168, Nova Scotia Court of Appeal, D.R. Beveridge, L.L. Oland and C.A. Bourgeois JJ.A., April 26, 2019. Digest No. TLD-June32019001