Be Wary of Resigning and Claiming Constructive Dismissal

One of the biggest risks an employee can take during his or her career is to resign and claim constructive dismissal. Susan Bolibruck recently took this risk and lost… badly. The decision in her case, Bolibruck v. Niagara Health System, 2015 ONSC 1595, is a cautionary tale for any employee who is considering quitting his or her employment to claim constructive dismissal.

A constructive dismissal occurs when an employer makes a substantial change (or changes) to the terms of an employee’s employment without the employee’s consent. The changes must be significant and go to the very root of the employment contract. The employee has the option of treating his or her employment as having been terminated.  The employee resigns and demands that the employer provide a severance package.

A former employee claiming constructive dismissal bears the evidentiary burden at trial of proving, on the balance of probabilities, that a constructive dismissal has occurred. If the former employee fails to prove that a constructive dismissal has occurred the employee will not be entitled to any award of damages and, as the loser of the court action, will likely be ordered to pay a portion of the employer’s legal costs.

Taking a constructive dismissal case to trial is, therefore, an all or nothing bet. In Ms. Bolibruck’s case, Justice Nightingale reviewed the facts and came to the conclusion that the changes to Ms. Bolibruck’s job were not significant enough to trigger a constructively dismissed.  As a result, he dismissed her action and order her to pay a portion of Niagara Health System’s (“NHS”)’s legal costs.  She will, obviously, also be required to pay her own legal costs.  Although we do not know the total legal costs for this action, Ms. Bolibruck will probably be responsible for paying costs in excess of $100,000.00 and possibly closer to $175,000.00.  A significant amount for an individual approaching retirement age.

If Ms. Bolibruck would have won Justice Nightingale wrote that he would have awarded her damages representing a notice period of 24 months.

Ms. Bolibruck started her career with NHS as a nurse in 1975.  She was obviously successfully in her job and was eventually promoted to one of seven health program directors (“HPD”) positions of the defendant’s amalgamated hospital system in the Niagara region (“NHS”).  Justice Nightingale went into great detail about the events that led to the disaster of Ms. Bolibruck leaving her employment and claiming constructive dismissal.  A heavily summarized version of those key events and facts are as follows:

  • there were a number of significant organization changes that occurred at the hospitals that formed NHS;
  • it was common for the individuals who held senior positions at NHS to see their duties and responsibilities change;
  • Ms. Bolibruck alleged that her manager made rude and derogatory comments about her and questioned her decisions. However, the judge preferred the contrary evidence given by her manager;
  • NHS made a decision to change Ms. Bolibruck job responsibilities. She was given responsibility for regional emergency care, internal and long-term care programs as well as a sepsis program and would continue in her role as the lead in the “LEAN” initiative. It was Ms. Bolibruck’s position that these roles were difficult, time-consuming and “no win” responsibilities;
  • the judge accepted that NHS’s evidence that Ms. Bolibruck’s new responsibilities were of critical importance to the hospitals and that her new role would be high profile. He accepted NHS’s evidence that management believed Ms. Bolibruck would be very effective in her new role. The judge did not accept Ms. Bolibruck’s evidence that she was not being given meaningful work because she would no longer be responsible for clinical work;
  • in her new position, Ms. Bolibruck would maintain her same salary and benefits and title as a Director. Her reporting responsibilities would be not just to a Vice President (like she had in the past) but now would also directly to the Chief Planning Officer;
  • the situation ultimately deteriorated to the point where Mr. Bolibruck took a medical leave of absence to consider her position and take care of her health. She decided there wasn’t going to be a continued role for her at NHS and it was not in her best interests to return; and
  • Ms. Bolibruck’s lawyer sent a letter in July 2011 which took the position that Ms. Bolibruck had been constructively dismissed. In response, NHS disagreed and confirmed that they sincerely wanted her to return and that the role proposed was still available to her.

The risk that an employee takes when claiming constructive dismissal is further highlighted by the fact that Justice Nightingale held that had Ms. Bolibruck been constructively dismissed from her employment, she would have been required to mitigate her damages by returning to work for NHS.

Ms. Bolibruck’s experience should be a warning to any employees who believe that they have been constructively dismissed.  Quitting and claiming constructive dismissal should be an employee’s last option in all but the most serious of cases.  Employment lawyers are often skilled at coaching employees on how to prod their employers into terminating their employment without cause thereby entitling the employees to a severance package. This strategy avoids the need for the employee to take on the risk of resigning from his or her employment and claiming a constructive dismissal.

It is apparent that Ms. Bolibruck failed to build a case for constructive dismissal prior to resigning.  At trial, she claimed that she was forced to work in a poisoned work environment and was mistreated by her manager. However, Ms. Bolibruck appears to have failed to sufficiently document the adverse treatment and, ultimately, the judge preferred the evidence of her manager who denied Ms. Bolibruck’s allegations.  

Given the risks involved when claiming a constructive dismissal, it really should be an employee’s last option in all but the most egregious of cases.