Abuse of employee can lead to constructive dismissal

A constructive dismissal is a termination without the boss saying the words, “You’re fired”. Sometimes a constructive dismissal happens because the employer changes the terms of employment drastically and without appropriate advance notice. Sometimes, however, it results from abuse of the employee.
But where is the line between legitimate criticism of an employee’s performance and abuse that justifies the employee walking out the door and suing for a severance package? The courts have said that the test is an objective one. Where the conduct of a manager is such that a reasonable person in those circumstances should not be expected to persevere in the employment, a constructive dismissal has taken place. The courts have also said that an employer is entitled to be critical of the unsatisfactory work of its employees and to take appropriate disciplinary measures but that there is a limit. If the employer’s conduct passes far beyond the bounds of reasonableness and the circumstances become intolerable, the employee may consider themselves constructively dismissed.
That’s the position a man we will call Sam found himself in. He had worked for a fitness club in Ottawa for six years and was the general manager. What had been an initially successful club was feeling some strain because the equipment and facilities were deteriorating and head office would not spend the money needed to keep up with the competition.
Despite that, the revenue for Sam’s club was growing but not as fast as expences.  In Sam’s sixth year, the recreation manager resigned because he was fed up with the ever-changing compensation plan dictated by head office. In his resignation letter he said that the only reason he had stuck around for as long as he had was because of Sam and his leadership.
Sam ended up in a telephone conversation with one of the owners of the chain of fitness clubs that went very badly. The boss called him every name in the book and blamed the recreation manager’s resignation on him. He accused Sam of taking a two-week vacation without authorization, which was false. Out of nowhere he claimed that Sam had been overpaid and owed the club $15,000.00. He said the club’s poor financial performance was Sam’s fault and that he would get lawyers involved if he found out that Sam had caused the company to lose business. At that point, Sam understood that he was being fired. He picked up the dictaphone on his desk and started taping the conversation which only got worse. After being falsely accused of a number of things, being called a number of names and threatened with legal action, not surprisingly Sam said that he could no longer work for the company.
Suddenly, the boss was concerned. He had no one else to run the club and needed Sam to stick around for at least 30 days to make a transition. He told Sam that if he did not stick around for 30 days he would not pay him monies he was owed under his employment contract and that the lawyers would be after him. He called him a moron repeatedly as well as a wop.
Eventually, this case ended up in front of a judge. The company claimed Sam resigned and Sam claimed that his treatment was so abominable that he was constructively dismissed. The judge found that Sam had no intention of resigning when he made the phone call to speak to his boss on this fatal day. He just bought a new home and his wife was pregnant. He just leased a new vehicle. The judge found that the boss was a bully. The court found that this conversation with the boss “brought home to Sam the impossibility of his continuing to work in an environment where his employer yelled at him, called him all kinds of names, falsely accused him of ruining his business, refused to have a dialogue or engage in reasonable, civil conversation, told him repeatedly how useless he was, made threats and generally treated Sam in a way that no employee should be subjected to.”
The employer had in fact held back $10,000.00 of money it owed to Sam under his terms of employment and only admitted that they should have paid it to him when the trial was beginning. Sam was awarded his unpaid wages and seven months’ pay in lieu of notice after his six years of service. The employer had to pay part of Sam’s costs for bringing the legal action.
This was not the first time Sam’s boss had been a bully. Just because you put up with abuse before doesn’t mean you have to put up with it forever. I suspect this case was over as soon as the judge heard the tape of part of the conversation in the courtroom and the way Sam’s boss treated him. Unfortunately, people that are being abused in a workplace rarely have the foresight to record the conversations and it’s difficult to portray just how bad the treatment was without that hard evidence.
As published in The Hamilton Spectator, September 6, 2011
Ed Canning
Ed Canning
P: 905.572.5809