Audit, Compliance and Risk Blog

Constructive Dismissal Claims Due to Employer Conduct

Posted by STP Editorial Team on Thu, Jul 21, 2016

Bullying.jpgManagers who abuse employees and employers who tolerate such abuse may be subject to law suits and face significant financial penalties if their actions are found to constitute constructive dismissal.

In a recent decision by the Ontario courts, Boucher v. Wal-Mart,1 employer conduct was found to constitute constructive dismissal where an employee was subject to repeated and persistent verbal abuse by the employer.

It is an implied term of any employment contract that an employer may not make changes to the duties, status, and remuneration of an employee so substantial as to amount to a repudiation of the employment contract. One form of constructive dismissal occurs where the employer’s conduct generally shows that it no longer intends to be bound by the contract. An employee is not required to work in an atmosphere of hostility, embarrassment, or humiliation, and where an employee is subjected to such abuse, he or she may be entitled to treat the contract as at an end and bring an action for constructive dismissal.

Boucher was employed as an assistant manager at a Walmart store. After Boucher refused to falsify a temperature log at the request of her supervisor, Pinnock, he became abusive towards her, belittling and demeaning her in front of coworkers. Boucher lodged a complaint with senior management and the complaint was leaked to Pinnock. When he found out, he berated Boucher, and “subjected her to an unrelenting and increasing torrent of abuse.” He would call other employees over so he would have an audience when he castigated her, calling her stupid and swearing at her. He would yell at her about the state of the store in front of customers. Other employees testified that Pinnock had turned ferocious towards Boucher, and that his treatment of her was humiliating. His bullying lasted about six months.

Despite substantial evidence of this abuse, Walmart’s investigation concluded that Boucher’s complaints were unsubstantiated, and that she was attempting to undermine Pinnock’s authority. They notified her that she would face discipline for making unsupported complaints. Pinnock was never even cautioned for his conduct.

Boucher suffered significant damages due to Pinnock’s conduct and Walmart’s failure to address her complaints. She was stressed, could not eat or sleep, lost weight, had abdominal pain, and vomited blood. Her colleagues testified that she had transformed from a fun-loving, lively, positive leader to a defeated and broken person. When the human resources manager warned Pinnock to relent because Boucher was looking ill, he said, “not until she [expletive] quits.”

Boucher finally did quit, filed a wrongful dismissal action, and was ultimately awarded a total of $410,000.2

STP has recently published an update to its publication  Employment Law: Solutions for the Canadian Workplace and also publishes the following related guides:

1 Boucher v. Walmart, 2014 ONCA 419.
2 An Ontario Superior Court jury awarded Boucher a total of $1,450,000 in damages. The Ontario Court of Appeal upheld the jury’s compensatory damages awards, but reduced the total damages to $410,000.

Tags: Employer Best Practices, Employee Rights, Canadian, directors, directors & officers