At SpringLaw we work with a lot of tech companies and start-ups who are all about agility. These employers often include language in their contracts that speaks to being flexible with duties and rolling with the punches as the company scales. How flexible can employers expect their employees to be when it comes to having their roles and duties changed? And how important are these promises of agility in the employment contract? How much can an employer require an employee to change hats before risking a constructive dismissal claim? A case out of Nova Scotia sheds some light on these questions.
What is a constructive dismissal?
A constructive dismissal occurs when the employer alters the terms of the employee’s employment in a sufficiently drastic way that a reasonable person in the same situation would consider the contract to have been breached AND that a reasonable person would conclude that the employer no longer intends to be bound by the contract.
Classic examples of constructive dismissals include lowering an employee’s pay or changing their pay structure, requiring them to move to another city to keep their job, demoting an employee or creating or allowing a harassing or poisoned work environment.
The question of flexibility arises when an employer assigns an employee more or different duties.
Mr. Whalley held the position of Economic Development Manager for the Municipality of Cape Breton. His offer letter contained a general description of his job – “manages the implementation of economic plans, programs, and services for the municipality.” Once he was hired he was provided with an equally general job description, stating that he was responsible for the development of “an internal strategy that will enable the municipality to play a lead role in creating a self-sustaining, competitive economy in this region.”
For the majority of his career in this role – 15 years – Mr. Whalley ended up focusing his time on the development of the Port of Sydney. In 2015, after he began to voice concerns about ethical issues related to a leasing deal at the Port, Mr. Whalley was informed that the Port of Sydney project would be reassigned.
Mr. Whalley did something that few employees whose duties are changed actually do – he immediately resigned and sued the Municipality for constructive dismissal.
Job descriptions are not frozen in time
Mr. Whalley was not successful in his claim. The court found that he was not constructively dismissed but left his job of his own accord.
Justice Murray commented that there was no express or implied term of Mr. Whalley’s employment that required him to work on a particular file and that it was not reasonable of him to refuse to continue to work once the Port file was reassigned. Mr. Whalley’s duties were very broad and open to reasonable variation and not “frozen” at the time they were prepared.
Employers who expect their employees to be flexible should establish this expectation at the beginning of the employment relationship with language in the employment contract. While it is unlikely that a court will ever condone significant compensation changes as permissible based on language about agility, this decision suggests that employers should feel confident in changing up an employee’s duties where language is general and reflective of flexibility.