Alberta court refuses summary judgement bid in constructive dismissal case again car dealership

Parking lot of a car dealership. Photo: HR Law Canada/Canva

An Alberta court has denied summary judgement in the case of two former finance and insurance (F&I) business managers at Varsity Chrysler Dodge Jeep Ram, a car dealership

The plaintiffs, RJ and TB, had appealed for partial summary judgment in their actions for constructive dismissal. They argued that changes made by Varsity in 2018 to the commission structure and work hours constituted a fundamental breach of their employment contracts.

The dispute centers around a memorandum issued by Varsity management in February 2018, which altered the commission structure and work hours for F&I managers. RJ and TB claimed these changes significantly decreased their compensation and increased their work hours, effectively constituting a constructive dismissal.

Varsity Chrysler Dodge Jeep Ram Ltd, on the other hand, argued that the changes were within its rights as an employer and that the contracts included an implied term allowing such alterations based on operational needs. The company disputed the plaintiffs’ interpretation of the terms of their employment contracts.

The case hinged on the interpretation of various memos and pay plans issued by Varsity over the years, which detailed the commission structure for F&I managers. The court found that there was a history of unilateral changes to the pay plans, and evidence suggested that the plaintiffs had accepted these changes in the past. This raised questions about whether the 2018 changes were indeed a breach of an invariable fundamental term of employment.

The plaintiffs’ case was further complicated by inconsistencies and gaps in their evidence and testimony, particularly regarding the expected commission percentages and actual commissions received during periods when there were different numbers of F&I managers.

Given the complexities and interconnections between the issues of constructive dismissal and the calculation of damages, the court determined that partial summary judgment was not appropriate in this case.

The court emphasized that resolving the constructive dismissal claim separately from the damages claim could lead to inconsistent findings and would not significantly expedite the trial process.

As a result, the court declined to grant summary judgment, leaving the plaintiffs and Varsity to proceed to a full trial to resolve their dispute. The judge expressed concern about the time and resources already spent on the litigation and offered to conduct a Judicial Dispute Resolution if both parties agreed, in an effort to assist in advancing the action.

For more information, see Johnson v Varsity Chrysler Dodge Jeep Ram Ltd, 2023 ABKB 544 (CanLII)