Question

Beauty Inc. is a company which produces and sells cosmetic products across Ontario (the "Company"). The Company has a total annual payroll of $3 million and 52 employees. Hanna started working at the Company in 2017 and Fred in 2010. They were both assigned to the packaging and labelling department with similar responsibilities as "Managers", though Fred has more experience and seniority as he joined the Company 7 years before Hanna. Hanna has been responsible for managing the packaging of products for men, whereas Fred has performed a similar function with regards to products for women. Both Hanna and Fred reported to the Senior Vice President, Operations, Amanda. Both work out of the Company's head office in Toronto. As part of an overall restructuring of its operations and organizational structure, the Company has now decided to promote Hanna to head a new position as Vice President, Packaging, overseeing all of the Company’s packaging and labelling activities. Amanda walks into Fred's office and tells him the news. She stresses that as part of the restructuring he will continue with his previous responsibilities (and same salary), but is now being asked to report to Hanna. Fred tells Amanda that he perceives this as a demotion and feels humiliated since he should have been promoted rather than Hanna. Riccardo, who has been working under Fred since he joined the Company in 2011, is privy to that conversation. He tells Amanda "this is nonsense", "I have no faith in your leadership", and "If Fred is out, I'm out". He leaves the office midday and goes home. Fred files a lawsuit against the Company for wrongful dismissal damages due to constructive dismissal. Riccardo shows up at work the next morning to find out a letter on his desk accepting his resignation. He then decides to sue the Company for wrongful dismissal damages.

a) In these circumstances, Fred will likely succeed in his lawsuit for constructive dismissal. True/False [0.5 mark] Explain your answer. [2.5 marks]

b) In these circumstances, Riccardo will likely success in his lawsuit for wrongful dismissal damages. True/False [0.5 mark] Explain your answer. [2.5 marks]

Answer 1

1. True, In these conditions, Fred 's case for constructive dismissal would definitely succeed. The employee is obliged to mitigate damages after lodging a claim for wrongful dismissal. Constructive dismissal, also called constructive discharge or constructive termination, occurs under employment law when an employee resigns because the employer creates a hostile work atmosphere. Because the resignation was not really voluntary, it is, in effect, an ending.

2. False, Riccardo is unlikely to succeed in his case for unfair dismissal claims under such circumstances. In law, unfair dismissal, also called wrongful termination or wrongful discharge, is a case where the employer has terminated an employee's employment contract, where the termination infringes one or more provisions of the employment contract, or a statutory clause or rule of labor law. An employee faces unfair termination if their job is terminated for unjust and unconstitutional purposes. False termination may also occur if an employer fails to follow its written termination of employment procedures.