Kucera v. Qulliq Energy Corporation, 2014 NUCJ 2

nunavuumi iqkaqtuijikkut NUNAVUT COURT OF JUSTICE La Cour de justice du Nunavut Citation: Kucera v. Qulliq Energy Corporation, 2014 NUCJ 02 Date: 20140117 Docket: 08-10-749-CVC Registry: Iqaluit Plaintiff: Sarah Kucera -and- Defendant: Qulliq Energy Corporation ________________________________________________________________________ Before: The Honourable Madam Justice S. Cooper Counsel (Plaintiff): Phillip G. Hunt Counsel (Defendant): Richard M. Beamish Location Heard: Iqaluit, Nunavut Date Heard: June 10-13, 2013 Matters: Common law constructive dismissal. REASONS FOR JUDGMENT (NOTE: This document may have been edited for publication)

I. INTRODUCTION [1] The Plaintiff [Kucera] was hired as Executive Assistant to the President and Chief Executive Officer [the President] of the QulliqEnergy Corporation [QEC] effective July 1, 2009. QEC is a crown corporation responsible for the delivery of electrical power to theterritory. Kucera worked for QEC until early August, 2010, at which point the employment relationship came to an end. Kucera claimsthat she was constructively dismissed from her position while QEC claims that through her conduct Kucera repudiated the employmentcontract and, as a consequence, was dismissed for cause. A.

Preliminary Matters [2] An issue arose when counsel sought to cross-examine a witness on an evidence

summary, commonly called a “will say”, provided inaccordance with Rule 326 of the Rules of the Supreme Court of the Northwest Territories, R.N.W.T. R-010-96, as duplicated forNunavut by s. 29 of the Nunavut Act, S.C. 1993, c.28 [Rules]. A discussion of the purpose and proper use of evidence summaries isworthwhile. [3] Rule 326 provides as follows:

(2) Where an action has been entered for trial, each party shall, on or before the tenth day before the trial, serve on every other party anevidence

summary in respect of each witness intended to be called on any issues of fact to be decided at the trial.

(3) Subject to subrule (4), the intended witness shall sign the evidence

summary and verify the truth of its contents. [4] Nunavut and the Northwest Territories are two of the few jurisdictions that require the exchange of evidence summaries prior to trial.In 2003, the Committee of the Alberta Law Reform Institute, Alberta Rules of Court Project, considered recommending the use ofevidence summaries. The Committee reviewed the use of evidence summaries in foreign jurisdictions and noted that in some instancesevidence summaries actually replace oral evidence in chief, thereby expediting the trial process.

In considering the use of evidencesummaries in the Northwest Territories, the Committee noted that they do not replace oral evidence and that if they were not provided ordid not fairly represent the evidence given by the witnesses, the opposing side might be granted an adjournment of the trial. TheCommittee recommended incorporating a practice similar to that of the Northwest Territories. In doing so, the Committee noted that thepurpose in exchanging evidence summaries is to prevent “ambush” at trial.1 [5] Pursuant to the Rules, an evidence

summary must be signed by the witness and acknowledged as being true. In Nunavut (Director ofChild and Family Services) v. S.Q and L.K., 2013 NUCJ 5, 2013 NUCJ 05 , the court found that evidence summaries that werecontained in a trial brief rather than as stand-alone documents verified to be true by the witness did not comply with Rule 326. Thissuggests that verification by the witness is an important aspect of evidence summaries.

[ 6 ] Although an evidence

summary is a statement given under compulsion, in that it is required by the Rules , it is nonetheless in the prior nature of a statement of a witness reduced to writing. While the primary purpose of evidence summaries may be to allow counsel to properly prepare for trial and to ensure that neither side is taken by surprise that does not mean that the statement cannot or should not be used for other purposes.

Those who argue that evidence summaries should be exchanged on a “without prejudice” basis point out that they are generally written by lawyers and not the witnesses and as such, it would be unfair to permit cross-examination on them. They also argue, as was argued in this case, that a party who provides detail in the evidence summaries is prejudiced for doing so as opposed to a party that provides only very general, broad statements.

It seems, however, that the same arguments in relation to affidavits, which are also normally prepared by lawyers, which provide varying degrees of detail and with which witnesses are cross-examined on with regularity. It is also not unusual for pleadings, which are most certainly drafted by lawyers and not signed by witnesses, to be put to witnesses. Further, the remedy for such prejudice is in Rule 326(6); the party may be granted an adjournment to prepare cross- examination on the basis that the evidence

summary, because it was lacking detail, did not fairly represent the evidence of the witness. [ 7 ] In my view, abusive or unfair cross-examination on an evidence

summary is protected against in the same way abusive or unfair cross-examination generally is protected against; by having the court control the process. Further, counsel are generally adept at determining the types of inconsistencies that are important and that it would be effective to cross-examine on. They understand that cross-examination on minor inconsistencies or matters that may not really be inconsistencies will not advance their case and may actually detract from it. On the other hand, if a witness signs an evidence

summary, acknowledges it as being true, and on a crucial point, resiles from or contradicts that position at trial, it would be unfair to not allow the inconsistency to be brought to the attention of the court. II. FACTS [ 8 ] Kucera was living and working in Toronto with her long-term partner when she responded to an online advertisement for the position of Executive Assistant to the office of the President/CEO of QEC. The position of President and CEO was a combined position, with responsibilities for both the Presidential and CEO roles being held by one person.

The advertisement described the position as providing administrative and secretarial support to the President/CEO. The duties were described as including special assignments on a variety of projects; managing document flow; editing Board papers for spelling, grammar, format and clarity; researching and responding to inquiries; and more. [ 9 ] Kucera was interviewed twice by telephone and was brought to Iqaluit for a face to face interview. During the interview process she was made aware that QEC was undergoing changes and was in a state of flux.

This interested her as she viewed it as a situation that would provide her with opportunities. The President was impressed with her enthusiasm and felt she would fit in well in the changing environment. [ 10 ] Kucera was offered the position by letter dated May 15th, 2009. The position was a non-union position, classified at Grade G, Step 2 on the pay scale, with an annual salary of $72,618.00 and an annual northern allowance of $12,846.00. Her start date was July 1, 2009. [ 11 ] Both Kucera and her partner resigned from the positions they held in Toronto. Kucera's partner is a precision machinist.

Although he had been with the same employer in Toronto for 11 years, the couple understood that he would have good prospects in the North. They put their personal items in storage and bought a vehicle specifically for the North, which they sent up by sealift along with some other items. [ 12 ] QEC is decentralized, meaning that some of its departments are in communities outside of the Territorial capital of Iqaluit. Kucera was to work in a small office in Iqaluit, along with the President/CEO, the Vice- President, Corporate Legal Counsel and the Corporate Secretary.

The QEC departments of Human Resources and Finance are based in Baker Lake.

[ 13 ] Although he had been with QEC in other capacities for 19 years, the President had only been in the position three months when Kucera commenced her employment. He had never had an Executive Assistant before and was perhaps unaccustomed to having such support. Further, in response to the recommendations in an Auditor General Report, QEC was in the midst of a major review of its operations. A consultant had been retained to undertake a functional review of its operations to determine if restructuring of the organization would improve efficiency.

Following the functional review, the consultant and a six person committee, composed of three union and non-union employees, carried out an evaluation of all the non-union positions. Presumably under the direction of the Board of Directors, they then formalized all job descriptions. As a result of this process it was to be expected that there might be changes or even the elimination or creation of departments or positions.

While Kucera was advised that QEC was in flux at the time of her hire she was not advised that these specific reviews were underway. [ 14 ] At the request of the Director of Human Resources, Kucera accompanied the President to Baker Lake during the first week of her employment. It was felt that this would give Kucera a good opportunity to meet some of the people she would be working closely with in supporting the office of the President. In addition to attending meetings throughout the week with the Director of Human Resources and others, Kucera also attended a dinner party at the Director’s home.

During this week the Director expressed concerns to Kucera about the trustworthiness of the Corporate Legal Counsel and the Corporate Secretary, two people who Kucera would be required to work closely with and who would be in close physical proximity to her in the workplace. [ 15 ] The President was away on holidays after the Baker Lake meetings, so the Director of Human Resources assigned Kucera to carry out a project.

During the first 6-8 weeks of her employment Kucera called the Director of Human Resources many times for direction and assistance, including assistance on how to deal with the Corporate Secretary. Kucera was having difficulty getting information from her. She was also concerned with the lack of direction she was receiving, the volume of work, and that she was expected to fulfill some receptionist and administrative support duties for the Vice-President.

The President or the Director of Human Resources addressed these concerns. [ 16 ] In early September there was email communication between Kucera and the Director of Human Resources regarding travel arrangements for upcoming meetings, including a meeting of the Board of Directors. In response to a request from the Director of Human Resources to make certain travel arrangements for one of the attendees, Kucera requested information from the Corporate Secretary. In doing so, she forwarded to the Corporate Secretary an email from the Director of Human Resources.

The Director of Human Resources responded firmly to Kucera that she was not to forward such emails and iterated concerns she expressed in Baker Lake regarding the trustworthiness of the Corporate Secretary and the Corporate Legal Counsel.

It seems that this had been an ongoing issue between Kucera and the Director of Human Resources, as Kucera forwarded the Director's firm email to the President with the comment that this was another example of the interactions with the Director of Human Resources that were causing her stress. [ 17 ] In early October, 2009, the Director of Human Resources was in Iqaluit for a Board Meeting. She received information from one of her staff that Kucera had expressed uncertainty about continuing on with QEC.

Upon receiving the information, the Director of Human Resources advised the President and Kucera was asked to meet with them. [ 18 ] There is a dispute over the nature of this meeting. Kucera testified that the issues regarding her workload and work she was getting from the Human Resources department were discussed. She testified that the Director of Human Resources became aggressive and continually asked her if she was resigning. She denies resigning during this meeting.

The President and the Director of Human Resources testified that Kucera had concerns regarding bonus pay that she thought she was entitled to and regarding the condition of her staff housing and its furnishings. They testified that during the meeting Kucera said that if her demands regarding these issues could not be met then she would have to leave her position. They took this as a resignation.

The President testified that the discussion went so far as to discuss how long Kucera would need to make the necessary arrangements to leave and that Kucera responded she needed two months. [ 19 ] Following the meeting the President and Director of Human Resources left a note for the Corporate Legal Counsel saying they needed to speak with him first thing the following day.

However, over the evening Corporate Legal Counsel spoke with Kucera and the following morning there was a further meeting between the President, the Director of Human Resources and Kucera, with Corporate Legal Counsel present, and the matter was resolved. According to the President and the Director of Human Resources, the resignation was retracted and it was understood that the terms of employment would continue as they had been. [ 20 ] On October 12, 2009, the President wrote a letter to Kucera in which job expectations were clearly set out.

According to the President, this letter was a follow up to the October 5th meeting. Kucera denies having received the letter.

[ 21 ] As mentioned, during this time and into the new year, QEC was undergoing a functional review and evaluating excluded positions. The position of Executive Assistant to the President was one of the positions being evaluated. The position was downgraded from a Grade G to a Grade F. The evaluations for all positions were available for employees to review. There were only three positions that were downgraded, that of Executive Assistant to the President, Corporate Secretary and Corporate Legal Counsel.

In addition to the concern that any employee would have when their position was downgraded, Kucera was concerned that she was now being grouped with two employees who she was told were untrustworthy and who she should withhold information from. In early December she sought information as to how the downgrade would impact on her salary and benefits. There is a dispute in the evidence as to whether she ever received a response.

The President testified that when he received an email from Kucera inquiring about the impact of the downgrade, he forwarded it to the Director of Human Resources to obtain the information needed to respond. Upon obtaining the information he discussed it with Kucera.

There is nothing to confirm that such a meeting took place and there are two subsequent emails from Kucera to Human Resources requesting the information suggesting that by that time at least she had not been provided with a response to her questions. [ 22 ] QEC’s evidence was that the downgrading would not affect Kucera’s pay and that she would be eligible for regular salary increases. The evidence was that the restructuring resulted in the bottom three pay grades from G being recatagorized into the top three pay grades of F.

This was contrary to Kucera's understanding of the situation, which was that the position had effectively been red circled and she would not be eligible for further salary increases. [ 23 ] The functional review also led to the creation of a new Department of Corporate Affairs. As part of the restructuring the President would no longer be responsible for preparing briefing notes for the Minister Responsible for the QEC. This function was now to be undertaken by the Director of Corporate Affairs.

As a consequence, Kucera's level of involvement in that process was diminished because departmental reports for the briefings would no longer go through her office. However, she would still be required to prepare briefing materials on behalf of the office of the President and CEO. [ 24 ] Because the Corporate Secretary position was vacant in December of 2009, Kucera took over the duties of that position in addition to her duties as Executive Assistant. She was performing these duties well.

It seems that there was some uncertainty as to whether that position would be filled or if consideration would be given to creating a position that combined the duties of Corporate Secretary and Executive Assistant to the President. In any event, Kucera expressed interest in assuming the duties of Corporate Secretary, by either assuming the duties in combination with her duties as Executive Assistant or by moving into the position of Corporate Secretary. [ 25 ] Although she was performing well at work, Kucera was experiencing stress and had sought assistance from the Employee Assistance Program.

On December 31st, 2009, she went to the hospital as the stress was impacting her physical health. Along with a prescription she was provided a referral to a Wellness Counsellor.

[ 26 ] In addition to the functional review and the position evaluations there were also evaluations that were directed at assessing how Kucera was performing in her position. One of these was a “360” review, where all excluded employees were anonymously evaluated by three co-workers. Kucera was concerned that she would not know which co-workers evaluated her. By this time her relationship with the Director of Human Resources had deteriorated to the point where Kucera was concerned that the employees selected to provide evaluations on her would be selected so as to ensure a negative evaluation.

In addition to the 360 review, Kucera was to undergo a performance appraisal at the conclusion of her six month probationary period. These two processes were completed by February and both were positive. [ 27 ] An aspect of the six month performance review was a review of salary. Kucera and the President discussed the performance review and an understanding was reached regarding a step up in her pay grade that would result in a specific increase in salary.

Following this meeting, on February 25th, 2010, Kucera received a letter from the President advising her that her pay grade was to be increased from Step 2 to Step 5. This letter did not reflect the agreement that had been reached in the meeting as it resulted in an increase of only $106.10, significantly lower than what had been agreed to. [ 28 ] Kucera intended to meet with the President to discuss her concerns regarding the letter but before having the opportunity to do so she had a chance meeting with the Director of Human Resources, who happened to be in Iqaluit at the time.

They discussed the content of the letter, the results of the various reviews and the pay grade. Following this discussion Kucera was upset as she felt undervalued by the organization and felt that she was being held back from advancing within the organization. [ 29 ] Ultimately, after following up with the President, Kucera's pay grade was upgraded to Step 6, resulting in a salary increase of $6,332.00, as agreed upon.

In addition, in recognition of the extra duties she had assumed as Corporate Secretary, she was given an additional $2,594.00 for as long as she continued to do that work. [ 30 ] Several months later, while reviewing her personnel file in response to a request she had made some time earlier, Kucera saw email correspondence relating to her performance review and salary increase. The Director of Human Resources had emailed staff in Baker Lake advising them of corrections that needed to be made to Kucera's pay grade, bringing it up to Step 6.

The email included the following: “...Needless to say she wasn't happy!!!:( “....Please ensure that the changes are made to Sarah's salary or I will face being shot in the face with 50 of her earrings.” [Joint Book of Documents, Tab 36 at paras 1-2] [ 31 ] Kucera testified that she was upset by the email as she felt that the exclamation marks and the emotive “:(“ made light of her concerns and that the comment regarding her earrings was offensive and hurtful. The Director of Human Resources testified that the email was intended to be a joke and was only intended for her immediate staff.

She testified that it was not intended to be hurtful and was not able to provide any context to the rather strange comment regarding earrings. [ 32 ] At the end of March, 2010, the Director of Human Resources asked Kucera to be part of the QEC bargaining team for upcoming negotiations with the Union. This was not a duty or responsibility in her job description. It was a reflection that she had earned the respect and support of her employer and might be considered as one of the unforeseen opportunities that Kucera had been anticipating at the time of her hire.

Unfortunately, the negotiations were delayed and had not commenced by the time Kucera's employment ended.

[ 33 ] On April 17, 2010, Kucera met with the President as she wanted to discuss ongoing difficulties she was having with the Director of Human Resources. Following this meeting the President took the concerns up with the Director of Human Resources. In response, the Director of Human Resources drew up a “complaint” against Kucera essentially alleging harassment. This document was never shared with Kucera nor was it placed on her personnel file.

Instead, it was treated as a private document to be used by the Director of Human Resources in a mediation which was to follow. [ 34 ] The Director of Human Resources travelled to Iqaluit for Board meetings approximately 3-4 times a year. Since a Board meeting was scheduled for May of 2010 the President arranged for the Director to come to Iqaluit early so that Kucera's concerns could be addressed. It was decided that a QEC employee with many years of experience in labour relations would attempt to mediate the differences between the parties.

The choice was a poor one, not because of anything to do with the skill of the mediator, but because in his position with QEC he reported to the Director of Human Resources. Under such circumstances it is hardly surprising that Kucera felt that the mediation was a sham.

If the goal of mediation is to achieve a resolution that satisfies the needs of both parties and leaves them with a sense that they have been treated fairly both in the process and in the result, this mediation was doomed to failure before it started. [ 35 ] Kucera did not want the mediation to proceed at that time as in her work life she was busy preparing for a Board meeting and in her personal life she was preparing for her wedding and honeymoon in June. In any event, the mediation did proceed and did not go well. Kucera prepared by itemizing the issues she wanted to discuss.

Those issues were: the comments made in Baker Lake in July, 2009 regarding the Corporate Legal Counsel and the Corporate Secretary; the fact that the self-appraisal she had done as part of the performance review process had been shared with others in the Human Resources Department; and the comments in the email on her personnel file that she found offensive. No resolution was reached.

There was some indication following the mediation that the Director of Human Resources might apologize to Kucera, however, an apology was never made and the mediator withdrew before there was any discussion of resuming the mediation. [ 36 ] On June 8, 2010, Kucera received a letter from the President titled “Clarifying the Terms of Employment within QEC.” The tone of the letter was stern and dealt with job expectations and the process of reviewing performance and dealing with complaints. The letter concerned Kucera.

She forwarded the letter to two Board members that she was close to and queried if they knew what was behind the letter. [ 37 ] Kucera was away from Iqaluit from June 21 to July 19, 2010 on annual leave. While she was away she received an email from the Corporate Legal Counsel advising her that the position of Corporate Secretary had been posted internally and the competition was closing before she was scheduled to return.

This concerned Kucera; her interest in applying for the position was well known and she felt that the position had intentionally been posted while she was away so that she would be precluded from applying. Upon her return to Iqaluit she raised her concerns with the President who told her that he would raise the issue with Human Resources and that she would not be precluded from applying. Although the President followed through and the date for applications was extended, Kucera decided not to submit an application.

[38] By this time Kucera was reconsidering her future with QEC. Notes from her Wellness Counsellor indicate that in May of 2010 shewas discussing looking for another job and commencing a lawsuit against QEC. She had also sought advice from a lawyer and waspreparing materials for him for a potential lawsuit. On August 3rd, Kucera met with her counsellor and sought direction on her plan tohave her lawyer send a letter to QEC and on whether she should be present in the workplace when it was received. [39] By this time Kucera had decided to try and negotiate a severance package with QEC.

On August 5th, Kucera was away from theoffice on sick leave and a letter was delivered to QEC on her behalf. The letter alleged that Kucera was constructively dismissed and thatshe would continue to work while a severance package was being negotiated. [40] On August 6th, QEC responded to the letter from Kucera's lawyer by terminating her employment. III. ISSUES [41] In these reasons, I will address the following issues: 1. Was Kucera constructively dismissed from her employment? 2.

If Kucera was not constructively dismissed, was the August 5, 2010 letter a repudiation of the employment contract which theemployer was entitled to accept? 3. If Kucera was not constructively dismissed or did not repudiate the employment contract, was she wrongfully dismissed? 4. If the answer to #1 or #3 is yes, what damages did Kucera suffer? IV. ANALYSIS A.

Was Kucera constructively dismissed from her employment? [42] Kucera relies upon the following in support of her position that she was constructively dismissed: * the downgrading of her position from a grade G to grade F; * the change in her duties regarding the preparation of briefing notes for the Minister; * not being provided with an opportunity to apply for the position of Secretary to the Board; and * a hostile work environment created by the Director. [43] The test to be applied in determining whether there has been a constructive dismissal is an objective test.

The leading case is Farberv Royal Trust Co., (SCC), [1997] 1 SCR 846 at para 26, [1996] SCJ No 118, wherein the court states: To reach the conclusion that an employee has been constructively dismissed the court must therefor determine whether the unilateralchanges imposed by the employer substantially altered the essential terms of the employee's contract of employment. For this purpose,the judge must ask whether, at the time the offer was made, a reasonable person in the same situation as the employee would have felt

that the essential terms of the employment contract were being substantially changed. [ 44 ] In determining that there has been a constructive dismissal it is not necessary for the court to find that the employer intended to force the employee to leave or that the employer acted in bad faith. [ 45 ] In assessing whether there has been a constructive dismissal some of the factors the court might consider are: * whether there was a demotion in position, prestige or status; * a reduction in salary; * a diminishment of responsibilities, including supervisory or managerial responsibilities; or * a hostile working environment such that it impedes the employee's ability to carry out her duties. [ 46 ] This, of course, is not an exhaustive list and there are other factors which may be relevant depending upon the circumstances.

The presence of one or more of the factors will not necessarily lead to the conclusion that there has been a constructive dismissal. The factors must be present to such a degree that they change the fundamental terms of the employment contract. Further, these factors should not be considered in isolation from each other. While any one factor alone may be insufficient to establish constructive dismissal, the cumulative effect may be sufficient. [ 47 ] It is important to consider the nature of Kucera's position within the organization to properly assess if there has been a constructive dismissal.

In many ways, the nature of the position is reflected in the title, Executive Assistant to the President and CEO. While the position involves much more than secretarial support, the core function is to provide administrative support to the President and CEO in the carrying out of his duties. The Executive Assistant does not have duties that are independent and separate from the office of the President.

As a consequence, one would expect that if the duties and responsibilities of the President change, so would those of his Executive Assistant. [ 48 ] As a result of the evaluation of excluded positions, the Executive Assistant position was downgraded from payscale G to F. The evidence from Kucera was that her position was one of only three positions that were downgraded as a result of the evaluation process, the other two being the position of Corporate Legal Counsel and Secretary to the Board.

She implied that she was now being targeted by the Director of Human Resources in the same way as Corporate Legal Counsel and Secretary to the Board. This was a legitimate concern given the undisputed comments made by the Director regarding those two individuals at the commencement of her employment with QEC.

Nevertheless, despite the position being placed in a different category, and the ongoing discussion regarding the appropriate paygrade within the category, Kucera received a salary increase of $6,332.00, to $78,950.00, for her duties as Executive Assistant and an additional $2,594.00 for her duties as Secretary to the Board. The net result was that effective January 1, 2010, six months after commencement of her employment, she received a total salary of $81,544.00.

[ 49 ] Although Kucera was satisfied with this salary increase she was concerned she would not be eligible for future increases as she understood her position had been “red circled”. She does not give any explanation as to why she came to this conclusion. There is no documentation to support such a conclusion and it is contrary to the evidence of both the President and the Director who testified that she would be eligible for future increases.

In this regard I accept the evidence of the President and the Director. [ 50 ] Kucera also relies upon a change in her responsibilities to support the proposition that she was constructively dismissed.

The job description she was provided when she accepted the position included the following: Establishes and maintains effective communication in working relationship with representatives of the Office of the Minister; Responsible for the Quilliq Energy Corporation and coordinates all ministerial briefing notes and inquiries in cooperation with the Board Chairperson; Reviews Presidents briefing intended for the Ministers Office for spelling, grammar, formatting and clarity. [Joint Book of Documents, Tab 2 at page 1] [ 51 ] In the spring of 2010, as a result of the functional review which had been ongoing since Kucera's commencement, a new division of Corporate Affairs was created.

The responsibility for preparing Ministerial briefing notes was transferred from the office of the President and CEO to Corporate Affairs. Senior management were directed to submit their ministerial briefing notes to the Director of Corporate Affairs rather than the President. I understand the impact that this had on Kucera was that she would no longer be receiving and coordinating the briefing notes from all departments but that she would continue to be involved in the preparation of briefing notes from the President's office.

Prior to the change in this aspect of her job Kucera estimated that this responsibility occupied her on a full time basis for 2-3 weeks prior to each sitting of the Legislative Assembly.

Given that she would continue to be responsible for preparing materials for the Minister from the office of the President it is reasonable to conclude that while the amount of time occupied on the task would be reduced, it would not be eliminated. [ 52 ] Employers must be allowed some flexibility to restructure the organization as circumstances demand without risking the potential for a claim of constructive dismissal in response to each change.

While I accept that Kucera would no longer carry the same level of responsibility in relation to this particular task as she had previously, it was the only aspect of her job description that changed as a result of the functional review. It was not a change that impacted her status within the organization. Further, I must consider that she assumed additional duties that included being part of the bargaining team for upcoming union negotiations (the negotiations were delayed and bargaining had not started by the time Kucera left) and the duties of Secretary to the Board.

These additional duties clearly demonstrate that the employer had a high level of confidence in her abilities and are reflective of the opportunities that Kucera anticipated might become available to her as a consequence of the changes QEC was undergoing when she accepted her position.

[53] A large part of the evidence before the court relates to difficulties in the relationship between Kucera and the Director of HumanResources.

Although not characterized as such by counsel, the argument, as I understand it, is that the working environment became sohostile that it impacted on Kucera's mental and physical health and her ability to fulfill her duties. [54] The court heard of the following specific incidents regarding the alleged hostile working environment involving Kucera and theDirector of Human Resources: * conversation in Baker Lake during first week; * direction to not provide information to Corporate Secretary – email suggests that there had been prior similar incidents but no evidenceon this; * discussion regarding the evaluation of her position & salary; * email with the “earring” comment; * the unsuccessful mediation; and * no opportunity to apply for the position of Corporate Secretary. [55] I accept that the relationship between Kucera and the Director of Human Resources was difficult.

While the Director clearly hadsignificant influence in the organization, perhaps too much, she had no supervisory role in relation to Kucera nor did they work in thesame office or even the same community. Their contact was somewhat limited simply by virtue of geography. Kucera's immediatesupervisor, the President, was in difficult circumstances as he was new to his position, was on a steep learning curve, and was calledupon to try and resolve issues between two staff members whose responsibilities included supporting the President in carrying out hisduties.

Any frustration about the situation he might have felt is understandable. [56] Further, despite the difficulties between Kucera and the Director of Human Resources, there were times when the relationship wasboth supportive and friendly. The Director arranged for an advance on Kucera's salary to offset expenses associated with her move. TheDirector supported Kucera's concerns regarding the expectation that she fulfill receptionist duties and assisted in addressing them.

Kucerawas granted special leave to facilitate her wedding and honeymoon and was authorized to attend two out of jurisdiction conferences inher first year of employment although the policy provided for only one. [57] A hostile working environment can form the basis of a successful constructive dismissal claim, however to do so the conflict mustgo well beyond interpersonal conflict, workplace disagreements, or criticism.

In Danielisz v Hercules Forwarding Inc., 2012 BCSC 1155at para 84, 1 CCEL (4th) 76 [Danielisz], the court held that Where unfriendliness, confrontations between co-workers, or some hostility and conflict occurs, it will not amount to constructivedismissal in circumstances where it does not prevent the employee from doing their work (See also King v Skyview Financial Advisors, (ONSC), 2006 CarswellOnt 3799 at para 23). [58] In my view the incidents relied upon by Kucera fall far short of what is required to substantiate a claim of constructive dismissalbased on a hostile working environment. [59] Finally, I have considered the cumulative effect of the downgrading of Kucera’s position from G to F (although accompanied by anincrease in salary), the change in some of the duties and responsibilities, and the difficult working relationship between Kucera and theDirector of Human Resources.

Having done so, I find that Kucera has not discharged the burden of establishing that she wasconstructively dismissed. B. If Kucera was not constructively dismissed, was the August 5, 2010 letter a repudiation of the employment contract which theemployer was entitled to accept? [60] On August 5, 2010, QEC received a letter from Kucera's lawyer which stated, in part: After reviewing all of the foregoing circumstances with our client we have advised her that she is in a position to pursue a claim for

constructive dismissal. In view of the fact that the Corporation does not wish to continue the employment arrangements that our clientpreviously enjoyed, our client is reluctantly prepared to enter into negotiations for an appropriate termination package. She is preparedto assist the Corporation by remaining in her present position and continuing to fulfill her overall responsibilities for as long asnegotiations continue and appear to be making progress, provided that it is understood that in doing so, she is not to be taken as havingwaived the legal consequences of the changes or condoned them.

The performance of our client's duties is, of course, subject to thelimitations imposed by her ongoing absence from the workplace on a certified medical leave. [Joint Book of Documents, Tab 75 at page 3]. [61] This letter was addressed to the President and copied to numerous people, including members of the Board of Directors and theMinister Responsible for the QEC. [62] QEC responded the following day by way of letter which disputed the contents of the August 5th letter and stated that it wasinsubordination and that the relationship of trust and confidence had been destroyed. “Considering the seriousness of your employmentoffence, as well as several previous indiscretions, Qulliq Energy Corporation has just cause for your direct dismissal.”2 Kucera'semployment was terminated as of August 20, 2010. [63] An employee can leave their employment by resigning or by repudiating the employment contract by engaging in conduct that isincompatible with the employment contract.

A number of cases have held that commencing a lawsuit against the employer is conductincompatible with the employment relationship and the employer can elect to accept the repudiation and thereby end the employmentrelationship (Suleman v British Columbia Research Council, (BC CA), [1990] 52 BCLR (2d) 138, 24 ACWS (3d) 508(BCCA); Zaraweh v Hermon, 2001 BCCA 524, [2001] BCWLD 1012 [Zaraweh]; Evans v Listel Canada Ltd., 2007 BCSC 299, [2007]BCWLD 4787). The application of the proposition is not universal and the matter is very much fact driven.

If it is clear that theemployment relationship is ending because the employer is winding up operations then the commencement of a lawsuit may not be arepudiation of the employment contract (Lewis v Terrace Tourism Society, 2010 BCCA 346, [2010] BCWLD 5670).

Also, in paragraph22 of Zaraweh the court stated that not all lawsuits filed by an employee are of the same nature so not all will lead to the conclusion thatthe employment contract has been repudiated. [64] Do the same principles apply when an employee states an intention to commence a lawsuit if a settlement package cannot benegotiated but has not yet commenced legal action? [65] In Larson v Galvanic Applied Sciences Inc., 2005 ABQB 238, [2005] AWLD 1350, the employee was a senior manager whoconsidered himself to have been constructively dismissed and advised the employer he wanted to negotiate a severance package.

Theemployer responded by advising that he was not constructively dismissed and that there was a position for him. The employee returnedto work, however things did not work out. The employee was put on paid leave while discussions regarding a severance package wereongoing. The employee was advised that if the matter was not resolved by a specific date that he would be expected to return to work.The matter was not resolved and the employee did not return to work as expected.

The employer, relying upon the allegation ofconstructive dismissal made some months earlier, purported to accept the repudiation of the employment contract. This case isdistinguishable from the current matter in that the conduct relied upon by the employer was dated and any repudiation by the employeeat that time, if there had been one, was not accepted by the employer. [66] In Danielisz, the employee wrote to the employer alleging constructive dismissal due to a change in her authority and hostileworking conditions.

The employer responded by setting out its expectations of the employee, at which time the employee went onmedical leave. If the allegation of constructive dismissal amounted to a repudiation of the employment contract it had not been acceptedby the employer at that time. The employee subsequently filed a complaint of constructive dismissal pursuant to the applicableemployment standards legislation. The complaint was withdrawn on the day the matter was set for mediation and the employee indicatedshe was not quitting but that she could not return to the same working environment.

The court held that the employee had made clear her

intention to seek some kind of compensation for constructive dismissal and that the employer, under such circumstances, was entitled toconsider that the employee had repudiated the employment contract. [67] In Grewal v Khalsa Credit Union, 2011 BCSC 648 aff’d 2012 BCCA 56, the employee wrote to the employer demanding, amongstother things, an apology from the employer. The letter also clarified that the employee had not resigned and sought direction on where toreport for work.

The employer took the position that the letter threatened legal action, which was incompatible with continuedemployment and which provided cause for dismissal without notice. The court, in finding that there was cause for dismissal, consideredthe letter in the context of other conduct by the employee. In determining the issue the court in paragraph 111 stated the employee was in a position of trust and responsibility. In order for her to perform her duties, it was essential that she retain the confidence of hersuperiors.

The . . . letter permanently undermined the employment relationship and made it impossible for (the employee and theemployer) to continue working together. [68] Kucera relies upon Schumacher v Toronto Dominion Bank, (ON CA), [1999] 120 OAC 303, 173 DLR (4th) 577[Schumacher], in which a long term, senior level manager whose responsibilities in the workplace had been seriously diminished, wroteto the employer alleging constructive dismissal and a desire to negotiate a severance package. The language in the “Schumacher letter” isidentical language to that in the August 5th letter from Kucera's counsel to QEC.

In Schumacher it was not necessary for the court toaddress the impact of the letter from Schumacher's counsel as it was held that there had been a constructive dismissal. However, thecourt did go on to address the issue. There is a distinction between this matter and Schumacher in that in Schumacher the employerentered into discussions with the employee.

As stated by the Court of Appeal in paragraph 29 of that case: While Schumacher's legal counsel had taken the position that Schumacher had been constructively dismissed, the evidence indicates thatthere were still ongoing discussions between the Bank and Schumacher which suggest that his continuing employment was within thecontemplation of both parties.(emphasis added) [69] While clearly the cases are fact-driven, there are some basic principles that can be drawn from them. It must be clear from thecircumstances, viewed objectively, that the employee intends the employment relationship to end.

Whether or not it is reasonable toexpect that the employee can return to the workplace, even for a short time, will depend on the position held by the employee and theharm done to the employment relationship. [70] By the time the August 5th letter was sent to the employer, Kucera's discontent in the workplace had been made known to theemployer. The August 5th letter was not an attempt to resolve differences. It did not leave available as an option that issues would beresolved and Kucera would return to the workplace indefinitely.

Kucera had decided that she no longer wanted to be employed by QEC.The August 5th letter was copied to numerous people, including members of the Board of Directors and the Minister Responsible forQEC. I view this as an attempt to politicize the matter and exert political pressure on QEC to resolve the matter in a manner favourable toKucera. The only issue to be resolved was the terms of her departure. [71] Kucera worked in the office of the President and for the Board of Directors and was privy to sensitive and confidential information.

The position required a high level of trust and required that she maintain the confidence of her superiors. It would have been impossiblefor this to have been achieved had there been a return to the workplace following the August 5th letter. Accordingly, I find that theAugust 5th letter was a repudiation of the employment contract which the employer was entitled to accept, and did accept. While theemployer responded by using the terminology of having terminated for cause, the entire circumstances must be considered to determineif this was a termination or an acceptance of a repudiation.

When read in its entirety, the letter uses language that better reflects anacceptance of a repudiation of the employment contract by the employee. V. CONCLUSION [72] Kucera was not constructively dismissed from her employment. The August 5, 2010 letter was a repudiation of the employmentcontact and QEC was entitled to accept it as such.

[ 73 ] Given Kucera was not constructively dismissed and the August 5th letter was a repudiation of the employment contract, it is not necessary to address the issue of whether Kucera was wrongfully dismissed or the issue of whether Kucera suffered damages. [ 74 ] If counsel wish to speak to costs they may do so by setting a date with the trial coordinator or agreeing to do so by way of written submissions. Dated at the City of Iqaluit this 17th day of January, 2014.

Justice Susan Cooper Nunavut Court of Justice 1 Alberta Law Reform Institute, “Discovery and Evidence issues: Commission Evidence, Admissions, Pierringer Agreements and Innovative Procedures” Alberta Rules of Court Project, Consultation Memorandum No. 12.7 (July 2003), online: University of Alberta <http://www.law.ualberta.ca/alri/docs/cm12-7.pdf>. 2 Joint Book of Documents, Tab 77 at para 5. --------------- ------------------------------------------------------------ --------------- ------------------------------------------------------------