The Manitoba Court of Appeal allowed an appeal by a plaintiff from the dismissal of his claim for wrongful dismissal.
The plaintiff was the general manager of new car sales of the defendant. He had been employed there for 19 years.He suffered from diabetes and partial blindness which was affecting his ability to work. In May of 2009, he owner of the defendant called the plaintiff to a meeting with other senior managers at which the plaintiff was directed to take a leave to absence and apply for long term disability benefits. The plaintiff was told that his job would be kept open until he returned. In fact, an employee was promoted to fill his position in June. In October 2009 the plaintiff found a job with another car dealership and the defendant terminated his employment. The plaintiff’s new job did not last and the plaintiff sued the defendant for wrongful dismissal.
The trial judge found that the plaintiff had quit his employment and dismissed the action.
The Court of Appeal found that the trial judge erred in law by failing to consider whether the defendant had constructively dismissed the plaintiff.
An employee is constructively dismissed when an employer makes substantial changes to the fundamental terms of the contract of employment and the employee resigns rather than accept the changes. The unilateral changes to the contract are considered a breach of contract by the employer which is the equivalent to a termination of employment.
In a claim for constructive dismissal, the initial onus is on the employee to prove the unilateral change to the contract. The onus then shifts to the employer to prove just cause or frustration of the contract by the employee.
In this case, the order by the employer that the employee take a leave of absence, without any discussion or plan for return to work, amounted to a constructive dismissal.
The defendant argued that the contract of employment had been frustrated as the plaintiff’s illness rendered him incapable of doing his job. The Court of Appeal noted that the question of whether an employment contract has been frustrated by illness depends on a range of factors including the length of employment, the nature of the employee’sduties and how long the employee is likely to remain disabled. Frustration becomes more difficult to establish as the length of employment increases. An employer who alleges frustration due to illness is expected to document its allegations with medical evidence.
In this case the defendant had only minimal information on the plaintiff’s medical condition. It did not have any meaningful discussion with the plaintiff on his condition or obtain medical reports on his treatment plan or prognosis. There was no medical evidence that the plaintiff was disabled from doing his job.
In the result, the appeal was allowed.The trial judge had provisionally assessed damages in the amount of $346,111.04.As no appeal had been taken from this assessment, the Court of Appeal awarded damages in this amount.