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Not reinstating employee to pre-leave position may constitute constructive dismissal

I recently read an interesting case coming out of Ontario’s Small Claims Court of all places. Bray v Canadian College of Massage and Hydrotherapy, the Ontario Superior Court of Justice, Small Claims Court concluded that, when an employee returned from maternity leave and was not reinstated to her original position with the same hours and salary, this constituted constructive dismissal and discrimination on the grounds of sex and family status.

In a nutshell, Kelly Bray was employed with the Canadian College of Massage and Hydrotherapy beginning in December 2004. Her duties included three components: teaching classes (she led classes rather than acting as a TA), supervising clinics and supervising outreach programs.

At the College, she had consistent hours over the years averaging about 25 hours per week. She also had her own private practice at a clinic like other instructors to supplement her main source of income at the College.

In October 2012, Bray went on maternity leave for one year. Her anticipated return to work in October 2013 would be one month into the September 2013 term.

Between May to August 2013, the College’s Director of Education, Tatum Johnson, went about setting the schedule for the September 2013 term. During this time when emails were flying about, Bray was omitted from the distribution list.

On July 10, 2013, at 1:29 p.m. Johnson emailed Bray the draft schedule for the September 2013 term. Bray responded at 2:45 p.m. asking, “Will I be leading treatments again when I come back?” Johnson responded at 2:47 p.m., “No I have you in as TA for that. You will be leading Palp 2 when you return.”

Bray responded at 3:12 p.m. stating:

(My) understanding of the labour laws is that I am supposed to be reinstated to the position I held when I went on mat leave which means I should be leading treatments.”

Johnson’s response at 3:22 p.m. concluded with the following statement:

Let’s see how this term goes and see if you find it ok with even being in 4 classes and having to be a mother at the same time. It will be a big adjustment.”

Bray reacted to that email by filing a complaint with the Ministry of Labour over the Internet. Bray and Johnson never discussed the subject of the complaint.

Bray’s maternity leave ended in September 2013 and she returned to work as anticipated, for the start of October 2013.

Her schedule for the September 2013 term as set by Johnson was reduced to 19 hours per week from 25. Bray never asked for this reduction.

Furthermore, she was not returned to the lead teaching position for the Treatments 1 class, and this class involved 7.5 of her 25.5 hours per week. Instead, she was given the TA position for that class and not the lead, and her overall hours were reduced to 19 per week. Her gross weekly pay was reduced by one-third, from $832 to $558.

If that were not enough, Bray felt that the atmosphere at work once she returned was “very strange”, “odd” and that she felt that she “never fit back in.” She noticed that other employees, including Johnson, did not talk to her as much as before.

In early November 2013, about five weeks after her return to work, the Ministry of Labour contacted Bray to ask that the complaint she had filed in July be put in writing in the form of a summary of the events. She did so on November 9, 2013.

The next thing you know, on December 16, 2013, Johnson sent Bray a letter by email regarding the next term stating:

Dear Kelly: We will not be able to put you in the schedule for classes, clinic or outreach for this upcoming term.”

In response, Bray sent an email to Johnson that day about 45 minutes later, asking:

I would like to know, based on what grounds, have I been removed from classes, clinic and outreach.”

Johnson responded by email a little over two hours later, stating:

Hello Kelly,

You are not being removed, at this time we simply do not require your services for this upcoming term. I will be making the May schedule in January, if you would like to be considered for that term please still send in your availability.

Thank you”

Consequently, Bray consulted legal counsel, withdrew her complaint to the Ministry of Labour, and commenced a wrongful dismissal action in Small Claims Court.

She argued that, after nine years of working with the College, she was constructively dismissed, which constituted a reprisal in response to her making a complaint to the Ministry of Labour. The College also discriminated against her because she was a new mother. She claimed damages in lieu of reasonable notice, damages for discrimination and reprisal, aggravated damages and punitive damages. Since this was Small Claims Court, the total amount claimed is limited to $25,000.

The College denied all aspects of the claim and argued that Bray resigned from her position. Further, it argued that Bray failed to mitigate her damages. Interestingly, the College made a creative argument halfway through the litigation that the scheduling of Bray for zero hours that term was a disciplinary measure in response to her dishonesty.

Decision

The court found:

  • Bray was constructively dismissed effective January 1, 2014, by virtue of the letter dated December 16, 2013. The employment agreement made no reference to layoffs and she had never been laid off before in her nine years of employment. On her return from maternity leave, her hours were unilaterally reduced from 25 hours to 19 hours and responsibilities increase, causing her income to be reduced by one third. Then, effective January 1, 2014, her hours and income were reduced to zero. This layoff was indefinite. The court rejected the College’s arguments that Bray resigned, or this unilateral action was a form of progressive discipline. It was never communicated to Bray that this was a form of discipline, and Bray was entitled to treat it as a constructive dismissal.
  • Bray was entitled to damages, and there was no exclusion of the common-law requirement for reasonable notice. Damages were not limited to the statutory minimums under the Employment Standards Act. There was nothing in the agreement or the employee handbook that supported this position. Given the circumstances, she was entitled to eight months of common law notice. There was no evidence of a failure to mitigate damages, so damages were not to be reduced.
  • The court did not have jurisdiction to award damages for a reprisal. As a result, the claim was dismissed.
  • Bray was entitled to $20,000 in damages for injury to feelings, dignity and self-respect as a result of discrimination on the grounds of sex and family status. Bray suffered adverse treatment on her return from maternity leave (a reduction in job responsibilities, hours and wages), and sex and family status were factors in this adverse treatment. It was clear that she never asked for this kind of treatment. The discriminatory approach led to the complaint to the Ministry of Labour. Consequently, the Human Rights Code violation led to liability for discrimination.
  • Bray could not show that the court should award aggravated damages. There was no medical evidence of mental distress.
  • Bray was entitled to an award of punitive damages in the amount of $5,000 because of the College’s bad faith conduct. This was a rare and exceptional award, but it was warranted in the circumstances. The College was not forthright, did not satisfactorily investigate her complaint and never discussed any potential discipline because of her complaint to the Ministry of Labour. The court stated, “I find that the failure to disclose this matter to Ms. Bray, involving as it did a question of her honesty, and failing to give her an opportunity to respond, was a violation of the duty of good faith performance of a contract.”

Therefore, this conduct toward Bray cost the College a total of $42,700, where Bray was entitled to receive $25,000 plus interest (due to the monetary jurisdiction of the court).

What can employers take from this case?

As can be seen from this case, it is never a good idea to act as this employer did.

Employers are encouraged to educate themselves and their employees on the proper treatment of employees who take maternity leave and the employment standards requirements of reinstatement to the original or similar position. Likewise, they are encouraged to educate themselves about human rights requirements including the proper treatment of employees who become pregnant and who return to the workplace. Employers (and all others in the workplace including managers) must understand and respect the grounds of sex and family status.

Employers are also recommended to be honest with their employees, especially if they are about to implement a disciplinary measure. Employees need to know that they are being disciplined, why they are being disciplined and the implications for the future. It is not acceptable to say after the fact that poor treatment of an employee was because of a mysterious disciplinary response. Moreover, Ontario employers cannot lay off employees suddenly without any warning. Employers who want to have the possibility open to them to lay off employees must make employees aware of this possibility at the beginning of the relationship in the employment agreement. Otherwise, a sudden reduction of hours and wages will be viewed as a constructive dismissal. The failure to be honest, reasonable and forthright in dealing with employees, particularly at the time of termination, can lead to sanctions far greater than common law damages in lieu of reasonable notice.

In the same degree, Ontario employers who want to limit the amount of termination notice to the statutory minimums set out in the Act must make this extremely clear at the beginning of the relationship and put it in writing in the agreement. Otherwise, there is no exclusion of the common law reasonable notice requirements. It is not acceptable to refer to an employee handbook that may be lurking around the office that no employee has ever seen. On the contrary, a term like this needs to be in the employment agreement.

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Christina Catenacci

Christina Catenacci, BA, LLB, LLM, was called to the Ontario Bar in 2002 and has since been a member of the Ontario Bar Association. Christina worked as an editor with First Reference between February 2005 and August 2015, working on publications including The Human Resources Advisor (Ontario, Western and Atlantic editions), HRinfodesk discussing topics in Labour and Employment Law. Christina has decided to pursue a PhD at the University of Western Ontario beginning in the fall of 2015.Read more
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