Asking an employee to hand company property back – including a cellphone and company-issued vehicle – did not amount to constructive dismissal in one case involving an Ontario employer.
BT began working for Modern Heating Brantford in February 2000 as an installer of HVAC equipment and a service technician. It’s a small company that has eight employees, owned by Tom Kirby and Wanda Kirby.
In July 2019, BT’s employment was terminated. He was 53 at the time. His total compensation package, including bonus entitlements, was about $95,000 annually. He participated in a group benefits plan that included long-term disability (LTD) benefits but not short-term disability (STD).
On March 13, 2019, BT’s wife sent a text message to the Kirbys indicating he was facing health challenges.
On March 6, BT had injured his wrist punching a solid oak cabinet. He was frustrated with difficulties with mould he had encountered in one of his houses, and its effect upon his wife’s health. He went off work sick on March 14 and never returned.
He did not received STD benefits, and declined to use vacation time. Instead, he went on EI benefits.
On April 24, BT’s wife met with Tom Kirby at a Tim Horton’s restaurant to share some of the difficulties her husband was facing. She asked Tom not to contact BT.
On July 2, 2019, the Kirbys met with BT at the behest of Tom Kirby. He told them he was not ready to return and the Kirbys let him know that, in these circumstances, obtaining LTD benefits might not be easy.
On July 12, BT told his doctor not to fill out LTD claim forms.
BT met with the Kirbys again on July 24. They wanted a return-to-work plan and confirmation from a physician that he was indeed fit to return to the job. The Kirbys recorded this meeting without BT’s permission. During the discussion, they asked him to return the keys to the Modern Heating work van he had and to return his company-issued cellphone.
Although the Kirbys said they were unhappy he was doing jobs on the side without permission, they told him twice during the meeting that he was not being fired.
Tom Kirby said it was not his intention to terminate BT, but everything changed a few days later when a demand letter arrived from his lawyer. No termination letter was ever provided to BT.
BT sought 24 months’ pay – or about $190,000. He also claimed entitlement to LTD damages caused by his wrongful dismissal. He also claimed that Modern Heating failed to accommodate his disability to the point of undue hardship.
The employer said it never terminated BT. It submits he represented to the company that he was not able to continue with his duties due to medical reasons, and never provided proof he is now capable of returning either on a full-time or part-time basis. BT never disclosed what, if any, accommodation he might require to return to work.
It short, the Kirbys said BT voluntarily left his employment and chose not to return.
Issue one: Was BT constructively dismissed?
The burden is on the employee to prove constructive dismissal, as per Potter.
The employee must meet one of the two tests.
Test one: The first is where any employer has, by a single unilateral act, breached an essential term of the contract of employment. This has two steps. The employer’s conduct must be found, assessed on an objective basis, to constitute a breach of the employment contract; and, assessed from the perspective of a reasonable person in the same circumstances as the employee, the conduct must be found to substantially alter an essential term of the contract.
In this case, BT said taking away his service vehicle and phone breached an essential term of his employment contract. The court disagreed.
“Modern Heating employees did not have a right to a company cellphone or use of a service truck for private purposes as a condition of employment,” it said.
“The vehicle was a service vehicle, whose purpose was to transport tools and equipment to jobsites to allow employees to complete their assigned tasks, and for employees to be available for emergency on call service when required. Its essential purpose was to benefit Modern Heating, not the individual employees. There was no general entitlement to use it for personal use. It was a service vehicle provided to complete work tasks, not a perk of the job.”
The same logic applied to the cellphone, and neither the vehicle nor phone were part of his compensation package.
He never reported the use of the vehicle as a benefit on his income tax return, and such a benefit was never attributed to him by Modern Heating.
Test two: The second branch allows for constructive dismissal to be made out where there has been a series of acts that, taken together, show that the employer no longer intended to be bound by the contract.
The focus of enquiry is not on a single act of the employer, but, assessed from the perspective of a reasonable employee, on the cumulative effect of past acts by the employer that establish that the employer no longer intended to be bound by the contract. This requires that a reasonable person in the employee’s situation would have concluded that this was the employer’s intention.
“(BT) was advised twice by the defendant that he was not fired. Modern Heating continued to pay the premiums for his benefits,” the court said. “On July 25, 2019, subsequent to the important meeting on July 24, 2019 upon which he grounds his claim, the plaintiff advised his physician Dr. Prowse that he had not been fired. (BT’s) own actions following the July 24 meeting suggest that he did not consider he had been terminated, up until the issuance of a lawyer’s demand letter. “
Issue two: Was there just cause for dismissal?
In this case, this issue was moot – as the court found there was no constructive dismissal. But even if there had been, the court said Modern Heating had cause to terminate his employment for cause.
“I find that (BT) breached his employee’s duty of loyalty. He frequently solicited business from his employer’s customers to his own benefit,” the court said. It pointed to text messages with a customer who asked whether the quoted price was a BT price or a Modern Heating price.
“The price agreed upon was a lower price, paid in cash to the plaintiff, from which Modern Heating derived no benefit. His explanation for this makes no commercial sense,” the court said.
In addition, BT’s actions exposed Modern Heating to significant potential liability. He affixed new gas installation tags that indicated Modern Heating as the contractor. These jobs were unknown to the defendant, but the defendant could have been liable for any damages arising from faulty installation.
“This demonstrated a capricious disregard for Modern Heating’s commercial interests,” the court said.
Issue three: Damages
Since there was no wrongful dismissal, no damages were warranted.
It also dismissed the notion of punitive damages.
“Punitive damages are restricted to advertent wrongful acts that are so malicious and outrageous that they are deserving of punishment on their own: Keays v. Honda Canada Inc., 2008 SCC 39. The facts of this case demonstrate no such conduct. Courts should only resort to punitive damages in exceptional cases and the employer’s conduct here was not sufficiently egregious or outrageous to warrant such damages. Punitive or exemplary damages are not appropriate in this case,” the court said.
Issue four: Did Modern Heating discriminate against BT on the basis of his disability?
Apparently, some of the conversation recorded by the Kirbys with BT focused on mental health and depression – and not in a good way.
“The comments of Tom and Wanda Kirkby in the video which captured what they discussed while observing BT using the tools in the company workshop for his own benefit were unfortunate comments made out of frustration, but never manifested in any actual discrimination against BT,” the court said.
“The attitudes they expressed concerning mental illness such as depression captured on the video were regrettable, and do not accord with a contemporary and appropriate understanding of the effects of depression as a mental illness, but they were made in the context of a private discussion amongst family members, and were not coupled with disciplinary actions against the plaintiff. There has been no evidence presented of discriminatory actions by the defendant.”
Further, BT failed to participate in the collaborative process of accommodation. He had an obligation to provide some medical documentation, and did not.
The court said no damages under the Ontario Human Rights Code were warranted.
For more information, see Tuinhof v. Modern Heating Brantford Ltd., 2022 ONSC 3418 (CanLIII)