Demotion Led to Constructive Dismissal

by & Christina Catenacci

In Ciszkowski v Canac Kitchens, the Ontario Superior Court of Justice concluded that a long-term employee was constructively dismissed when he considered himself demoted upon his return to work from heart surgery. This demotion due to his disability created a serious erosion of the working relationship.

Facts of the case

Kazimierz Ciszkowski started working for Canac Kitchens, a division of Kohler Canada Co. in January of 1990 and eventually became the Contracts Project Manager in February 2000, reporting directly to Canac’s Chief Financial Officer.

There were four attempts to have Ciszkowski sign an employment agreement, which he refused to do as drafted.

Effective May 25, 2004, Ciszkowski went on disability leave due to a heart condition. He had heart surgery on June 30, 2004, which included a bypass and the repair of a defective valve. During this time, he received short-term disability benefits.

From March 14, 2005, to April 11, 2005, Ciszkowski returned to work on a graduated basis. He no longer reported to Canac’s Chief Financial Officer but to Aziz Poonawalla, the Credit Manager. When Poonawalla asked Ciszkowski to report to Edmund Peng, Contracts Supervisor, Ciszkowski objected and reported instead to Poonawalla for the remainder of his time at Canac.

He also was asked to perform tasks that he never had to perform before his leave. For example, in May of 2005, Peng asked Ciszkowski to update a database with information about insurance certificates and contractors’ licences. Ciszkowski did not like being asked to do this task and repeatedly asked for clarification.

Ciszkowski’s reaction to the changes to his job duties led to a series of meetings and corrective actions:

  • In June 2005, Ciszkowski received formal corrective action, though it was classified as a confirmation of verbal discussion, the least serious form of corrective action. The meeting addressed Ciszkowski’s unprofessional and confrontational behaviour with other employees, and set out corrective actions for each point.
  • Also in June 2005, a number of other issues were addressed during a meeting, including the need for Ciszkowski to make up the time he had missed due to his attendance at doctors’ appointments. The biggest point was the need to provide sufficient notice of the time being taken off to attend medical appointments.
  • Again in June 2005, there was a meeting where no formal corrective actions were taken, but there were several issues raised including: workplace attitude and demeanour; the continued refusal to sign an employment agreement; the interactions with Peng; an email exchange regarding a contract; and the need to make up the hours of work that he had missed due to medical appointments.
  • On January 6, 2006, Ciszkowski received a second corrective action. This time it was a written warning. The main issue was identified as insubordination because of not presenting doctors’ notes, leaving early and not providing enough notice to plan workload management prior to doctors’ appointments.

Then, things got even worse. On January 6, 2006, at some point prior to the corrective action meeting, Herman Vijayakumar (a co-worker) was the target of a joke, where he was handed a toilet seat as an employee award in mockery of Canac’s service award. Vijayakumar emailed Ciszkowski that afternoon, stating that he was “disappointed with the joke you made in the morning” and asked him not to repeat it. It turned out that it was not Ciszkowski who handed him the toilet seat.

Ciszkowski responded to Vijayakumar’s email of January 6, 2006, on January 9, 2006. He also forwarded the email from Vijayakumar to the human resources department and asserted that he fully expected HR to deal with this situation in a fair and unbiased manner.

Shortly after Ciszkowski sent these two emails, he was told by other employees that he did not look well. Others suggested that he should leave work immediately and go see a doctor. Ciszkowski left work that morning.

When he returned that day after seeing the doctor, he was given a third corrective action, again a written warning. The issues to be addressed were listed as insubordination and unproductive work environment, and it listed several behavioral issues regarding leaving work without prior approval and playing practical jokes. There were action steps to correct the issues as well.

Ciszkowski left work on January 11, 2006. He told HR that he had been feeling ill and emotional and was also complaining of chest pain. He never returned to work at Canac.

Ciszkowski was subsequently diagnosed with a major depressive disorder with a marked anxiety component and suppressed anger. Ciszkowski was experiencing symptoms conforming to a post-traumatic stress response in relation to his experiences at work. The doctor concluded that he was not able to work and psychiatric intervention was required.

As a result, Ciszkowski qualified for long-term disability on November 27, 2006, retroactive to May 13, 2006, the date following his 119-day qualifying period.

Canac then terminated Ciszkowski’s employment by way of letter dated May 29, 2008, because the company was in the midst of shutting down its operations in Canada. He has not returned to work in any capacity, with any employer, as of the date of trial.

Consequently, Ciszkowski launched a wrongful dismissal action. Given that he had worked with Canac for 18 years, he wanted damages for lack of reasonable notice of termination. He also asked for damages for the tort of intentional infliction of mental suffering, damages for the bad faith manner of his dismissal and an award of punitive damages against Canac.

In response, Canac argued that the limitation period had expired and there was frustration of the employment contract. The company also sought a proportional reduction in any award of damages for wrongful dismissal.

Decision

The court found:

  • Credibility: Neither Ciszkowski’s nor Poonawalla’s testimony could be believed and relied upon to any large degree. Ciszkowski’s allegations of bad faith were largely incredible. The court concluded that Ciszkowski “presented a one-sided, myopic version of the events leading up to his termination.”
  • Conspiracy: Poonawalla did not conspire to begin a campaign of spying on Ciszkowski. Any surveillance was done to watch all employees. Similarly, the toilet seat prank was not done to single out Ciszkowski and selectively discipline him—other employees were also dealt with because of the prank.
  • Constructive dismissal: Ciszkowski was constructively dismissed when he returned to work in April 2005. Not only was there a change in reporting structure, but he was demoted regarding the tasks he was to perform and responsibilities. These were significant unilateral changes and he never accepted them—he felt demoted and repeatedly asked for the reasons. These significant changes constituted a fundamental change to his employment. Also, Ciszkowski’s claim for constructive dismissal as of April of 2005 was not statute-barred. The limitation period had not expired.
  • Wrongful dismissal damages: Ciszkowski was entitled to damages for wrongful dismissal. Given the factors set out in Bardal, a notice period of 18 months was warranted in the circumstances. It was important to remember that Ciszkowski was employed with Canac for 18 years. His official title was Contract Project Manager, and he had been in that role since at least 2000. Before his constructive dismissal, he reported directly to Canac’s director of finance, attended managerial meetings and supervised at least one employee. He was a mid-level manager and was in his mid-fifties at the time. Since Ciszkowski already received 6 months’ pay, he was entitled to a further 12 months’ pay in lieu of notice.
  • Moral damages: Ciszkowski was not entitled to compensatory moral damages for the bad faith manner of his dismissal. Canac’s repeated requests for proof of doctors’ appointments was not a campaign of harassment that was aimed at forcing him to quit; it was just company policy to ask for this information.
  • Additional damages: Similarly, Ciszkowski was not entitled to damages for the intentional infliction of mental suffering because the actions of Canac and its employees did not rise to the level of “flagrant and outrageous” conduct, nor were they calculated to cause the type of harm that Ciszkowski suffered.
  • Punitive damages: Ciszkowski was also not entitled to any punitive damages. Canac’s failure to pay Ciszkowski his statutory minimum payments until January of 2014 was a factor in favour of awarding punitive damages as against Canac, but it was not sufficient reason on its own.
  • Frustration of contract: There was no frustration of contract because of the long-term disability, either at the time of the constructive dismissal in April 2005 or the effective termination date in January 2008. Furthermore, subsequent doctors’ reports did not clearly claim that he was permanently disabled as of those dates. Simply put, at the relevant time, there was no post-termination medical evidence that established Ciszkowski was totally disabled and would have been unable to return to work within a reasonable period of time as of May, 2008, or at any time prior to that date. The disability was clearly prolonged, but doctors treating and diagnosing him continued to recommend various courses of treatment and to express varying degrees of optimism regarding his prospects for recovery. Ciszkowski was entitled to treat his contract as ended in 2005.
  • Proportional reduction of damages: There was not to be any proportional reduction of the damages. The evidence was that Ciszkowski and Canac mutually paid for his STD and LTD insurance benefits. The contract with Manulife provided for a clawback, but that was strictly between Ciszkowski and Manulife. Given that there was no express provision precluding double recovery, it was reasonable to assume that an employee would not willingly negotiate pay for a benefit that would allow an employer to avoid responsibility for a wrongful act.
  • Therefore, Ciszkowski was entitled to damages for wrongful dismissal.

    What can be taken from this case?

    As can be seen in this case, changes in reporting structure, job duties, managerial requirements, constitute a fundamental change of the employment agreement, and will likely lead to a finding of constructive dismissal, particularly where there is objective evidence. But every case is different and the facts of the individual case are considered when making this type of decision.

    Employers need to realize that when an employee does not accept unilateral changes to an employment agreement, something needs to be done to terminate the relationship. An employee that does not accept this type of change does not deserve to be punished, harassed or called insubordinate. As the court mentioned, Canac dragged its heels in order to avoid paying a severance package. This could have been avoided had the employer simply acknowledged that Ciszkowski did not accept the new terms, terminated him and paid out a severance package.

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