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Sticking it Out: Consequences and Cautions regarding Resignation

The Ontario Court of Appeal’s Decision in Persaud v. Telus Corporation, 2017 ONCA 479

Background

The applicant, Jan Persuad (the “Applicant”) brought a claim for constructive dismissal against her former employer, the respondent, Telus Corporation (the “Respondent”). The Applicant also sought damages for intentional infliction of mental suffering and inducing a breach of contract. The Applicant worked for the Respondent for seven (7) years as the Java Developer on the Product Development team.
 
The Appellant resigned two (2) days after her mentor resigned from his employment with the Respondent.   
 
The trial judge dismissed all grounds of the Applicant’s claim. The Applicant appealed the trial judge’s decision. 

 Issue

Did the trial judge err in his dismissal of the Applicant’s claim for: (a) constructive dismissal; (b) damages for intentional infliction of mental suffering; and/or (c) damages for inducing a breach of contract?

Ontario Court of Appeal’s Decision

(a) Constructive Dismissal
 
The Applicant submitted that she was driven to resign because of a significant change in her working conditions, specifically an increase in hours. The Applicant also argued that the work environment was poisoned. As such, the Applicant sought damages for constructive dismissal in accordance with the principles from Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10. The trial judge found that although the grounds of significant change in working conditions and a poisoned work environment can lead to damages for constructive dismissal, it is not always the case. The trial judge found that this case did not amount to constructive dismissal. Specifically, the trial judge “found that the appellant did not leave her employment because of changes to her working conditions.” (para 6). Further, the trial judge concluded that: “an employee cannot claim damages for constructive dismissal when there is no causal link to the reason for the resignation, even if there has been a unilateral change to an essential claim of the contract.” (para 7 citing para 35 Persaud v Telus Corporation, 2016 ONSC 1577)
 
The Appellant argued that the trial judge erred in concluding that the reasons for resignation must be linked to the constructive dismissal. The Court disagreed with the Applicant’s position. The Court found that the requirement for a causal link is an essential element for a breach of contract claim.
 
The Appellant also argued, in the alternative, that a causal link could have been found, if the trial judge had considered in combination the change to the working conditions as well as the distressing departure of her mentor. The Court did not find that the trial judge erred in law with respect to her assessment of the change in working conditions. The trial judge stated that an employee is entitled to a reasonable amount of time to assess the change in conditions, however an extended time period will preclude a claim for constructive dismissal. This is trite law. The Court found that the trial judge’s assessment of the evidence with respect to the Applicant’s change in working conditions, specifically an increase in workload occurred in 2002 and remained until her resignation in 2004. This extended period of time gave the Applicant ample opportunity to raise concerns about the increase in workload. The Court found that these evidentiary conclusions by the trial judge were sound based on the evidence presented.  As such, the Court found no overriding or palpable error with the trial judge’s finding with regard to constructive dismissal.
 
(b) Intentional Infliction of Mental Suffering
 
The Court first assessed the trial judge’s summary of the law relating to the tort of intentional infliction of mental distress. Citing paragraphs 138-139 of the trial judge’s decision, the Court found that the following summary was an apt summary of the relevant law (para 20):
 
The required elements of the tort of intentional infliction of mental suffering are (i) the conduct was flagrant and outrageous; (ii) the conduct was calculated to cause harm; and (iii) the conduct resulted in a visible and provable illness or injury.
 
With respect to the second requirement that the conduct is calculated to cause harm, the defendant must intend to cause such harm, or, such harm must be known by the actor to be substantially certain to follow from his or her behaviour. As an intentional tort, this element cannot be satisfied on an objective standard of "reasonable foreseeability" or "recklessness". [Citations omitted.]
 
The Appellant’s tort claim was based on the Respondent producing a report after the Applicant resigned. The Respondent, shortly after the Appellant’s resignation, experienced software glitches to the program the Applicant had been responsible. An investigation into the cause of the glitches found that there had been sabotage to the program. A report was produced and it concluded that either the Applicant or her mentor had created the sabotage. A copy of the report was sent to the police. The Applicant argued that the report was improperly done and that it was not possible for her to have done the sabotage. The Appellant did not present any expert evidence to support this statement. The trial judge found that there was no foundation that the Respondent acted in ‘bad faith’ or in an ‘unfair’ manner, or engaged in any conduct that was ‘flagrant and outrageous’ with respect to the report and investigation. The Court found that the trial judge arrived at this conclusion after an extensive review of the evidence. Specifically, the Court found that the trial judge’s conclusion was well founded. The Court did not find that the trial judge made an error of law or a palpable or overriding error with regard to the facts.
 
(c) Inducing a Breach of Contract
 
Again, the Court first looked at the trial judge’s statements with respect to the principles of law. The trial judge, citing Correia v. Canac Kitchens, 2008 ONCA 506 and 1670002 Ontario Limited (Canadian Professional Recruiters) v. Redtree Contract Carriers Ltd., 2014 ONCA 501, found that there are four elements that a plaintiff must establish for a finding of inducing a breach of contract had occurred. The four elements are as follows (para 26):
 
1.   The defendant had knowledge of the contract between the plaintiff and the third party;
2.   The defendant's conduct was intended to cause the third party to breach the contract;
3.   The defendant's conduct caused the third party to breach the contract; and
4.   The plaintiff suffered damages as a result of the breach.
 
In or around January or February 2005, a third party was given an opportunity to provide services to the Respondent in Edmonton. The proposal was predicated on the Appellant providing her services through her consultant company. The Respondent’s representatives in Edmonton interviewed the Appellant. After an exchange of materials between the Appellant’s consulting company and the third-party the Appellant signed an agreement. No evidence was presented to the trial judge to support that the third-party had signed the agreement. The Appellant was advised by the third-party that the Respondent had decided not to employ the Applicant’s consulting company on the project.
 
The trial judge found that the Appellant had not discharged her onus of proof that there was a valid and enforceable contract. The trial judge also found that even if there was a contract with a third party and that the Respondent knew about the contract, the Appellant did not prove that the Respondent intended to cause a breach the contract.
 
The Court did not find an error in law, nor a palpable or overriding error with regard to the facts regarding the trial judge’s conclusions.
 
(d) Conclusion
 
The appeal was dismissed in its entirety.

Our Thoughts

Employees should be weary about accepting or appearing to accept changes to the terms of their employment. If an employee is unsatisfied with the changes, it is advisable to clearly convey their displeasure with the changes that are essential to the terms of their employment; otherwise, it will likely be considered tacit consent of those changes. The above discussion also provides guidance to employers with respect to potential liabilities when an employee resigns after a change in said employee’s duties.

Further, the above discussion outlines the conditions required to satisfy claims of intentional infliction of mental distress as well as inducing a breach of contract. It is important to reflect on the burden of proof a plaintiff carries when brining any civil claim.
 
The above article is for general information purposes only and does not constitute legal advice. If you have concerns with regard to the foregoing issues, please make an appointment with one of our lawyers or a qualified legal practitioner elsewhere.