Cousins. v. QEC, 2016 NUCJ 01

Nunavunmi Maligaliuqtiit NUNAVUT COURT OF JUSTICE Cour de justice du Nunavut Citation: Cousins. v. QEC, 2016 NUCJ 01 Date: 201602XX Docket: 08-11-404 Registry: Iqaluit Plaintiff: Chris Cousins and- Defendant: Qulliq Energy Corporation ________________________________________________________________________ Before: The Honourable Mr. Justice Paul Bychok Counsel (Plaintiff): Phillip G. Hunt, Esq. Counsel (Defendant): Richard M. Beamish, Esq. Location Heard: Iqaluit, Nunavut Date Heard: September 28, 2015–October 2, 2015 Matters: Common Law – Constructive Dismissal Action REASONS FOR JUDGMENT (NOTE: This document may have been edited for publication)

Table of Contents REASONS FOR JUDGMENT 1 I. INTRODUCTION 3 II. ISSUES 4 III. FACTS 4 IV. POSITIONS OF THE PARTIES 13 A. The plaintiff 13 B. The defendant 14 V. ANALYSIS 14 A. Was there a breach of the contract of employment? 15 B. Was the employer’s breach of the employment contract a substantial one, such that the employee had been constructively dismissed? 16 VI. Damages 18 A. Length of reasonable notice 18 B. Mitigation 20 C. Expenses 21 VII. CONCLUSION 21 I. INTRODUCTION [ 1 ] The plaintiff, Chris Cousins, started work as a Trades Helper with the defendant corporation in 1995.

He worked his way up the ranks and by January 2011, he had become the Maintenance Supervisor for the Qikiqtaaluk Region, making over $146,000.00 per year. In the Maintenance Supervisor position, the plaintiff was responsible for the operation of fourteen power-generating plants across Baffin Island. By all accounts, his was a success story: a Nunavut Land Claims Agreement beneficiary [beneficiary] who had succeeded in his profession despite being limited by a Grade 11 education. [ 2 ] The defendant corporation, Qulliq Energy Corporation [QEC], is a territorial Crown Corporation based in Iqaluit.

It is responsible for the provision of electricity to all twenty-five of Nunavut’s far-flung communities (Qulliq Energy Corporation Act, RSNWT 1988, c N-2 (Nunavut)). [ 3 ] Unfortunately, the plaintiff became obsessed with QEC’s implementation of

Article 23 of the Nunavut Land Claims Agreement [Article 23].

Article 23 provides for increased participation and representative levels of Inuit beneficiaries in employment positions with the government.

Article 23 applied to QEC. From about 2008 onwards, the plaintiff persistently challenged QEC management concerning

Article 23 and related issues which had no direct impact on either his position or his responsibilities. He involved himself in labour relations issues involving different employees despite the fact that the workplace was unionized. QEC had an operating Inuit Employment Plan Committee [Committee], whose function was to advise the corporation on

Article 23 employment issues. Regrettably, the Court heard that the plaintiff felt he was “too busy” to join and participate in this Committee. Management eventually began to characterize the plaintiff’s persistent

Article 23 “lobbying” (as they termed it) as behaviour meriting disciplinary action. Between June 2010 and January 2011, the plaintiff was disciplined four times. [ 4 ] The last disciplinary action culminated on January 14, 2011, with management issuing a written “Disciplinary Suspension – Demotion.” The plaintiff was suspended without pay for thirty working days. He was directed to take anger management training

before commencing with his new, lesser, non-supervisory responsibilities as a Plant Superintendent. On February 21, 2011, management sent a letter to the plaintiff stating that his new position would start on February 28, 2011. The plaintiff consulted a lawyer and returned to work on March 4, 2011. On March 9, 2011, he delivered a letter to management wherein he stated that he considered himself as having been constructively dismissed.

QEC replied in writing the next day, stating that the corporation had accepted his “resignation.” [ 5 ] The plaintiff has sued QEC for various categories of damages arising from this alleged constructive dismissal. QEC denies the claim. [ 6 ] The trial was held in Iqaluit from September 28 to October 2, 2015. The plaintiff and Joe Sageatook [Sageatook] testified on behalf of the plaintiff. David Clark [Clark], Peter Mackey [Mackey], Catherine Cronin [Cronin], and Francis Léger [Léger], testified on behalf of QEC. Judgment was reserved. II.

ISSUES [ 7 ] Was the plaintiff constructively dismissed by QEC? [ 8 ] If the plaintiff was constructively dismissed, is he entitled to damages? III. FACTS [ 9 ] The facts are largely undisputed. Counsel provided a two-volume Joint Book of Documents to assist the Court. The Court commends counsel for their cooperation in focusing the Court on the relevant documents and issues. [ 10 ] Some background is necessary to place this action into context. [ 11 ] The plaintiff unsuccessfully applied, twice, for promotion within QEC to the position of Director of Operations.

The first selection process culminated on July 1, 2009, with a letter from Mackey and Cronin to the plaintiff. Mackey was the President and CEO of QEC. Cronin was the Director of Human Resources [HR]. The letter informed the plaintiff that he was not the successful candidate, but applauded his “interest and courage” in wanting to further his career. The plaintiff was encouraged, among other things, to pursue a career development plan that included a Management Certificate Program at QEC’s expense. It also stated: “[w]e want you to achieve your career aspiration!” [Joint Book of Documents, vol.

I, Tab 19, 01 July 2009]. The plaintiff never followed up on this offer from QEC. The successful candidate in that competition was Mr. Tim Harris [Harris]. Harris was not a beneficiary. [ 12 ] Harris left the defendant’s employ the next year and the plaintiff applied again for promotion to the same position. Again, he was unsuccessful. He was advised of this by email on October 14, 2010. The successful candidate, Clark, was also not a beneficiary. [ 13 ] QEC filled another management position, titled Maintenance Manager, in June 2010.

The incumbent reported directly to the Director of Operations and the plaintiff reported directly to the incumbent. [ 14 ] The plaintiff’s difficulties with QEC began in earnest on June 2, 2010. The June controversy concerned Sageatook, who was a member of the local union executive and reported to the plaintiff. Sageatook was a beneficiary and the plaintiff’s friend. When Sageatook was passed over for promotion to the Maintenance Manager position, the plaintiff became angry. The successful candidate, to whom the plaintiff would be reporting, was Mr. Lee Brenton [Brenton]. Brenton was also not a beneficiary.

In an effort to understand this result, Sageatook exchanged a number of emails with Léger, a QEC labour relations leader. Sageatook’s emails focused on the fact that a non-beneficiary had been hired for the position. Sageatook alleged that Brenton’s appointment constituted a violation of

Article 23. These rather benignly worded emails irritated Léger, who found them to be “belligerent” and “disrespectful” [Joint Book of Documents, Tab 41, vol. I, 3 June 2010]. Léger asked the plaintiff, who was Sageatook’s direct supervisor, to intervene. The plaintiff refused to do so because he agreed with Sageatook’s concerns.

[ 15 ] On June 3rd, Léger emailed the plaintiff, asking him to convene a meeting to discuss Sageatook’s concerns. The meeting was to include the plaintiff, Léger, Sageatook, and Cronin. The plaintiff refused to convene the meeting because he agreed with the position taken by Sageatook. In an email sent to Léger later that day, the plaintiff asked: “[…] are we, or are we not following the law of the land?” [Joint Book of Documents, vol. I, Tab 41, 3 June 2010]. [ 16 ] There followed numerous internal emails involving the plaintiff, Sageatook, Léger, and Harris. To one degree or another, all these emails pertained to

Article 23 and QEC. Then, on June 14th, Harris sent a letter to the plaintiff. The letter advised that a “fact-finding meeting” had been convened for the next day. It was explained to the Court that fact-finding meetings were held, when necessary, to explore labour relations issues and to seek consensus as to how best to move forward. The letter from Harris set out the following management concerns respecting the plaintiff’s recent behaviour: 1. Refusing to address a reported violation of one of your employee’s obligations to treat a co-worker with respect, dignity and professionalism; 2.

Overtly and publicly stating that you & a few others in the plant were setting up a plan to get the HR department employees fired 3. Overtly and publicly criticizing [sic] and calling into question the professionalism, expertise, and business results of Director of the organization [sic] 4. Overtly criticizing [sic] alleged QEC illegal activities. 5. Overtly advocating one of your employee’s unsubstantiated criticism [sic] of QEC actions: 6. Overtly questioning QEC management. [Joint Book of Documents, vol.

I, Tabs 49-50, 14 June 2010] [ 17 ] The fact-finding meeting was held on June 15th and QEC decided to discipline the plaintiff. On June 23rd, a written “reprimand” was prepared by HR for Harris to send to the plaintiff.

Harris sent it on to the plaintiff a written “warning.” In the letter, Harris stated: While you articulated your views with clarity, passion and a strong and heart-felt sense of Justice [sic], you provided not [sic] factual basis for establishing a concrete relationship between those views and the issue at hand, being your failure to act, as a supervisor, to address serious misconduct on the part of one of your subordinate employees.

Not only did you not address your employee’s insubordination, you specifically “justify” his attitude based on your perception of him being treated unfairly. [Joint Book of Documents, vol. II, Tab 52, 21 June 2010] [ 18 ] This was not, however, the end of the matter. [ 19 ] On September 17, 2010, the plaintiff wrote to Cronin, stating: “[n]ow that we are all back from our summer vacations, I would like to have this written warning removed from my file [...].” He stated that the allegations made against him in June were false.

He noted that the June fact-finding meeting involving Sageatook had not led to any discipline against Sageatook. He requested a written apology for himself and Sageatook. He ended his letter by saying: “I do not see how defending Joe Sageatook in regards to

Article 23 of the [Nunavut Land Claims Agreement] can result in any discipline.” [Joint Book of Documents, vol. II, Tab 61, 17 Sept 2010]. [ 20 ] Three days later, on Monday, September 20th, the plaintiff’s immediate supervisor, Brenton, notified the plaintiff of another fact- finding meeting, to be held on Friday, September 24th. The purpose of the meeting was said to be an exploration of “the topics raised” by the plaintiff in his September 17th email to Cronin. Brenton advised the plaintiff that “discipline may result from our discussion.” [Joint Book of Documents, vol.

II, Tab 63, 20 Sept 2010]. [ 21 ] The fact-finding meeting was duly held that Friday, September 24th. The meeting was attended by the plaintiff, Léger, and Brenton. Léger wanted an explanation as to why the plaintiff had written Cronin rather than his supervisor, Brenton. The plaintiff replied: “Well he wasn’t party to the ongoing problem in the beginning and I see that when I get written up for defending Joe’s actions in regards to

article 23 [sic] it relates directly to Lee Breton [sic], as it is the position that Lee has gotten that is in question. So it is a conflict. That is why I didn’t address it to Lee.”

[Joint Book of Documents, vol. II, Tab 65, Transcript of 24 Sept 2010 at p 4] [ 22 ] Léger responded by suggesting that the plaintiff’s decision to copy the letter of September 17th to both Sageatook and Cal Clark, who was Corporate Counsel at the time, had been an inappropriate breach of confidentiality. The following exchanges go to the heart of the ongoing differences between the parties: MR. COUSINS: Well if you read my written warning it states that a serious – that ‘I did not address serious misconduct on the part of one of your subordinate employees’. That would be Joe Sageatook.

So when the so-called serious misconduct fact finding [sic] meeting took place with Joe nothing came of it, no verbal warning, no written warning, no suspension, nothing of any kind. So why is it that I am given a written warning regarding an alleged serious misconduct on one of my subordinate employees? It just doesn’t add up. It does not add up. MR. LÉGER: Is it fair to say that you refused to participate in a disciplinary process regarding Joe? MR. COUSINS: I refused? I refused to agree that Joe did anything wrong. I didn’t see anything wrong in Joe’s email.

I went further to say that what we have done as a company by not following

article 23 [sic] of the Nunavut Land Claims Agreement was wrong.” Toward the end of the meeting, the following was said: “MR. LÉGER: [You] come back to what you are bringing up again, being the lack of respect that you perceive for

section 23. Why do you and I have to be discussing this in a conflictual context? […] MR. COUSINS: […] I don’t know how to say it. We wouldn’t have to keep doing this if QEC and if HR were doing what they say they are doing […]. To date I don’t see anything wrong with the way you have conducted that position. The issue is not how you do your job. The issue is why did Joe not get your job. So my thought is, well there was a failure in HR somewhere along the line. That is what I feel. MR. LÉGER: Lee, [Brenton] I would strongly advise that you do not engage in that discussion. I don’t think it is appropriate.

I think that is – essentially it is a problem we are having, Chris, is that you keep repeating this challenge to the corporation. These are corporate decisions. MR. COUSINS: I think it is a bit of a conflict. I mean it is not comfortable for me to sit here in front of my supervisor and defend somebody else who should have got [sic] that position. It is not, but that is the way it is. I mean I am not going to pretend it is not. [Joint Book of Documents, vol. II, Tab 65, Transcript of 24 Sept 2010 at pp 20-22] [ 23 ] On October 5th, Léger wrote a confidential report about the fact-finding meeting for Mackey.

In it, Léger wrote: [f]rom an HR/LR perspective, Chris’ attitude has significantly eroded QEC’s capacity building efforts and threatens the ability of co- workers to operate efficiently […] [i]t is my recommendation that Chris be demoted, for a period of six months, into a non-managerial position. His willingness to accept directions from his superior in his current position should be reassessed after six months. [Joint Book of Documents, vol. II, Tab 66, 5 Oct 2010] [ 24 ] Mackey did not accept Léger’s advice to demote the plaintiff. Instead, Léger sent an email to the plaintiff on October 7th.

The email reminded the plaintiff that Harris had asked him on June 3rd to bring the Sageatook controversy to a close, that he had failed to do so, and that his failure to do so was the only “basis of the letter of reprimand issued by Tim[.]” He continued:

As of today, not only will the reprimand letter stand on your record, but you are also advised that the attitude/behaviour you exhibited in the fact finding [sic] on Sept. 24, revisiting the same topics having formed the basis of a previous discussion with Tim, is still reprehensible, unjustified and will no longer be entertained. Lee is your supervisor, he deserves and needs your support as do all your colleagues and co-workers and you are fully expected to cease bringing your own views on political/philosophical issues in the way of discharging your duties as a responsible manager/supervisor.

Although warranted, further discipline will be withheld [sic], for the moment, in the expectation that you will show respect to your immediate superior, to your co-workers, individually and collectively, to the organization and to the public we all serve. [emphasis in original] [Joint Book of Documents, vol. II, Tab 68, 7 Oct 2010] [ 25 ] Meanwhile, tensions continued to simmer. [ 26 ] The QEC Board of Directors met in Iqaluit on December 3, 2010. After the meeting, the plaintiff, Sageatook, and two other beneficiaries who were employed at the Iqaluit plant, spoke with some of the Directors.

The four men wanted to air their concerns about the way QEC was implementing

Article 23. [ 27 ] Shortly after, Cronin reported that the reason for the nocturnal and unexpected visit to the Directors was because the plaintiff and Sageatook harboured grievances that they had not been promoted in the past. Cronin stated her belief that these four employees had also approached members of the Legislative Assembly of Nunavut with their complaints. Cronin said that she spoke for the HR department, stating that: “[t]he denigrating and destructive propaganda that they spread has affected QEC Iqaluit [sic] plant significantly, creating a significant divide between Inuit and non-Inuit.

The outcome of their behaviour has been devastating to our organization.” To make her point, Cronin appended to her report copies of confidential exit interviews from two former Directors, both of whom were said to have condemned QEC’s “racist” and “poisonous” work environment. Both former Directors were said to have sharply criticized QEC’s corporate culture of tolerating insubordinate behaviour by Inuit employees against non-Inuit management. [Joint Book of Documents, vol.

II, Tab 70, 3 Dec 2010] [ 28 ] The Court is not called upon to decide the merits, or otherwise, of the plaintiff’s ongoing concerns respecting QEC and its implementation of the policy and spirit of

Article 23. However, the Court finds that the plaintiff did persistently challenge QEC on this issue to the point of obsession. In turn, the plaintiff’s actions led to a growing frustration within QEC about the best way to manage him.

These ongoing issues also contributed to the gradual and inexorable development of a poisonous relationship between the plaintiff, his supervisors, and the HR management team. [ 29 ] It was against this backdrop that another simmering issue came to the forefront. [ 30 ] On December 10, 2010, Rick Hunt [Hunt], Manager of Health, Safety and Environment [HSE], reported to Cronin on the situation in the Baffin region. Plant inspections had been conducted throughout the area earlier in the year and various deficiencies had been identified.

Hunt reported that the plaintiff had failed to deal with the required corrective measures which had been identified throughout his area of responsibility. [ 31 ] On December 13, 2010, Léger emailed a written reprimand to the plaintiff which, he was told, would be placed on his personnel file “for [his] failure to discharge [his] duties in that respect.” [Joint Book of Documents, vol. II, Tab 72, 13 Dec 2010]. No fact-finding meeting was conducted before this reprimand was issued.

The plaintiff was given one week to provide an HSE update and action plan to resolve the various deficiencies which had been noted earlier. The plaintiff replied on December 17th, stating that he would attend to the issues after the Christmas break. He also apologized to Hunt and Brenton “for not addressing these issues promptly and with profession [sic].” [Joint Book of Documents, vol.

II, Tab 73, 17 Dec 2010]. [ 32 ] In the meantime, Clark, who was new to Nunavut and had been hired to replace Harris as the Director of Operations, was scheduled to take on his new role early in January 2011. [ 33 ] Brenton advised the plaintiff on January 6, 2011, that he was expected to submit his HSE report by the end of that business day. They met the next day. Their meeting was so tense that Brenton asked Clark to join them. The meeting continued to be very tense.

During this meeting, the plaintiff informed his two immediate supervisors that it was not his job to provide the requested HSE reports. He insisted that it was Brenton’s responsibility. He told them that “[he, the plaintiff] should be reporting to Joe,” referring to Sageatook. He also told his supervisors that they could find the required information on the shared computer drive. When testifying in court, Clark described the plaintiff as having been “defiant, uncooperative and disrespectful” at the meeting.

Unsurprisingly, QEC management and HR advisors were becoming increasingly exasperated with the plaintiff. [ 34 ] The die was cast two days later. On Saturday, January 8, 2011, the plaintiff, Sageatook, and two other QEC employees, all of whom were beneficiaries, went unannounced to the home of the Honourable Lorne Kusugak, the Minister responsible for QEC [Kusugak]. They arrived at the door of his residence in Iqaluit sometime after supper. The four men proceeded to tell Kusugak about a case of alleged racial discrimination against one of them. This allegation did not relate to the plaintiff.

Kusugak agreed to look into the situation. [ 35 ] Léger was summoned to Kusugak’s office on Monday morning, January 10th. Kusugak told Léger he was not pleased to have been contacted at home, outside of proper channels. He was reported to have characterized the four employees as “trouble-makers that need to be dealt with.” Within the QEC, these four employees had come to be known as the “four horsemen.” [Joint Book of Documents, vol. II, Tab 79, 12 Jan 2011].

The stage was now set for the fourth disciplinary action against the plaintiff, which is the reason for this action. [ 36 ] The plaintiff was advised two days later on Wednesday, January 12th, that a disciplinary meeting was being convened for Thursday, January 13th.

Léger told him that the meeting would be attended by himself, Clark, and Cronin to address the following matters: 1. disciplinary action that had previously bee [sic] withheld [sic], 2. [the plaintiff’s] failure to provide HS&E and/or operational reports or to provide them in a timely fashion and 3. [the plaintiff’s] continuing campaign to discredit QEC. [Joint Book of Documents, vol. II, Tab 77, 12 Dec 2011] [ 37 ] The plaintiff was also told that he could bring a representative as “discipline may ensue.” [Joint Book of Documents, vol. II, Tab 77, 12 Dec 2011]. [ 38 ] The meeting was held as scheduled.

The plaintiff was accompanied by a union representative as well as a lawyer, both of whom made clear, at the outset, that they would require more information from the employer in order to be able to advise the plaintiff. They asked for the necessary information and for an adjournment so they could advise their client. Léger refused on the basis that the plaintiff knew what the meeting was about. There was much discussion about what the meeting was intended to accomplish. The three-point agenda was canvassed.

In the final analysis, the meeting did not result in any consensus or resolution of the various outstanding issues. [ 39 ] A transcript was prepared of the meeting’s proceedings [Joint Book of Documents, vol. II, Tab 80, Transcript of 13 Jan 2011]. In it, Léger manifested the same aggressive attitude which had been the hallmark of his dealings with both Sageatook and the plaintiff. The plaintiff was certainly a difficult employee to manage.

The relationship, however, was further and irredeemably soured by the pointedly adversarial and aggressive tenor of the HR department’s dealings with the plaintiff from June 2010 to January 2011. [ 40 ] Two days after that meeting, on January 14th, 2011, Clark sent a written notice of “Disciplinary Suspension – Demotion” to the plaintiff, who was advised that he would be suspended without pay for thirty working days – from January 17 to February 25, 2011. According to QEC’s Progressive Discipline Policy [Policy], suspensions were limited to no more than ten working days.

The plaintiff was told that he was also required to attend and successfully complete an anger management course. More important to this litigation, the written notice stated that: As of February 28, 2011, on your return to the Operations workplace, you will be transferred to a non-supervisory position for which you are qualified. This transfer is dependent on whether a suitable position is available at that time and which does not cause a bumping action. This move will involve a corresponding adjustment in pay.

If an appropriate position is not available, you will be laid off and placed on O-priority hiring status. You will only be considered to return to a supervisory role after you have demonstrated that you do indeed understand and accept the important responsibility and accountability required in a supervisory role. You must prove that you are both willing and able to make the changes required in earning your right to return to an important corporate supervisory role.

The demonstration of your ability and willingness to move back into a supervisory role will be assessed on a monthly basis. [emphasis added] [Joint Book of Documents, vol. II, Tab 82, 14 Jan 2011]

[41] The suspension and demotion were confirmed in writing by Mackey on January 21st. [42] The plaintiff served his suspension. After some misadventure, he was able to find and complete an anger management courseacceptable to QEC. He returned to work on Friday, March 4th. He was required, upon his return, to move his office from the corporatemanagement floor to a downstairs cubby near the battery bank. He was also made aware, for the first time, of the specifics of his newposition as Iqaluit Plant Supervisor.

Clark told him that he had to sign the defendant’s offer respecting the demotion before he couldreturn to work. [43] On March 9th, the plaintiff delivered a lawyer’s letter to QEC, in which he said that he considered himself to have been“constructively dismissed” and that the “employment relationship is ended” [Joint Book of Documents, vol. II, Tab 110, 9 Mar 2011].Mackey replied in writing the next day and accepted what he termed as the plaintiff’s “resignation.” [Joint Book of Documents, vol. II,Tab 111, 10 Mar 2011]. IV. POSITIONS OF THE PARTIES A.

The plaintiff [44] The plaintiff’s action is based upon two arguments. First, Counsel for the plaintiff says that a demotion constitutes a constructivedismissal per se. There is neither an express nor an implied contractual right for this employer to demote its employee. He argues that thediscipline was “ultra vires the disciplinary tool bag” available to the employer by reason of its own Policy. Counsel argues that demotionwas consequently unavailable to the defendant employer.

The result, he continues, was a constructive dismissal pursuant to Farber vRoyal Trust Co, (SCC), [1997] 1 SCR 846, 145 DLR (4th) 1 [Farber]. [45] In the alternative, Counsel for the plaintiff argues that the four disciplinary actions taken against him were disproportionate to hisimpugned conduct. In the circumstances of this case, this discipline constituted the constructive dismissal of the plaintiff. [46] The plaintiff claims damages totalling the equivalent of 24 months’ pay in lieu of notice, as well as certain incidental expenses. B.

The defendant [47] Counsel for QEC characterises the action as a “discipline case which is a distinct type of constructive dismissal case.” It argues thatit had just cause to terminate the plaintiff’s employment, but instead chose to try to “save” and “rehabilitate him.” Counsel for thedefendant states that the “Disciplinary Suspension – Demotion” of the plaintiff on January 14, 2011, was “effective discipline within thediscretion of the corporation.” Counsel argues that the plaintiff was not dismissed constructively, but that he “quit” his employment. [48] Furthermore, Counsel for QEC argues this demotion was intended to be a temporary, and not a permanent, change in status.

Counselacknowledges that QEC’s own Policy does not include a provision to demote. The Court is urged to imply a condition into the contract ofemployment giving the defendant the right to demote its employee in the circumstances of this case. Therefore, Counsel argues theplaintiff’s action should fail. [49] The defendant also argues that the plaintiff failed entirely to mitigate his damages, and that any award should therefore be reducedby fifty per cent. V.

ANALYSIS [50] The onus is on the plaintiff to prove, on a balance of probabilities, that QEC’s demotion of the plaintiff constituted his constructivedismissal.

[51] The law pertaining to the constructive dismissal of an employee by an employer was outlined by the Supreme Court of Canada inFarber at para 33: Thus, it has been established in a number of Canadian common law decisions that where an employer unilaterally makes a fundamentalor substantial change to an employee’s contract of employment – a change that violates the contract’s terms -- the employer iscommitting a fundamental breach of the contract that results in its termination and entitles the employee to consider himself or herselfconstructively dismissed.

The employee can then claim damages from the employer in lieu of reasonable notice. [52] This constructive dismissal principle was recently applied in Potter v New Brunswick (Legal Aid Services Commission), 2015 SCC10, [2015] 1 SCR 500 [Potter]. [53] The Court, in its legal analysis, must apply a two-part test: 1. Has a breach of contract been proven? 2.

If the answer to the first question is yes, the Court must then determine whether that breach substantially altered an essential term orterms (Farber at paras 34, 37). [54] The analysis is an objective one: would a reasonable person, at the time the breach occurred and in the same circumstances as theemployee, have felt that an essential term of the employment contract had been substantially changed? (Farber at paras 39, 60). A. Was there a breach of the contract of employment? [55] The foundational facts are not in dispute.

The plaintiff began his employment with QEC as a Trades Helper in January 1995 andhad moved into increasingly more responsible positions since then. At the dawn of January 2011, the plaintiff occupied the position ofMaintenance Supervisor for the entire Qikiqtaaluk Region; a post he had occupied, with some modifications in responsibilities, since2005. [56] The parties agree that QEC’s Policy formed a part of the plaintiff’s contract of employment. The Policy dealt expressly with theprogression of discipline for cases of misconduct.

Except in cases of “extremely serious” misconduct, the disciplinary measures availableto supervisors were stated to be “progressive,” and the measures would “normally” take the following form: counselling for a firstoffence, a written warning for a second offence, suspension or probation for a third offence, and termination for any subsequent offence. [57] Although the definition

section of the Policy defines the term “demotion,” it does not appear elsewhere in the Policy. [Joint Book ofDocuments, vol I, Tab 25] [58] The Policy formed part of the contractual relationship between QEC and the plaintiff in a unionized setting. The Policy applied, atall material times, to both unionized and excluded (managerial) employees of QEC. All employees were entitled to rely upon that Policyas both a guide and a safeguard. There is no evidence before the Court which suggests that demotion was understood generally to be anavailable option for the defendant employer.

Courts should be especially cautious in implying terms into employment contracts whichare the fruit of collective bargaining and detailed negotiations between the contracting parties. [59] Courts are loath to imply terms into an employment contract “unless it is necessary to give business efficacy to the contract.

Thewillingness of a Court to imply terms into the contract is understandably restrictive” (Carscallen v FRI Corp, at para49 (ON SC), 42 CCEL (3d) 196, aff’d (ON CA), 52 CCEL (3d) 161). [60] It is not necessary on the evidence to imply such a term here in order to facilitate business efficacy in the employee-employerrelationship. The Policy is clear, unambiguous, and understandable. It has been relied upon and followed by QEC for many years.

[ 61 ] On its face, the “Disciplinary Suspension – Demotion” of the plaintiff in January 2011 constituted a breach of the employment contract between the parties. B. Was the employer’s breach of the employment contract a substantial one, such that the employee had been constructively dismissed? [ 62 ] The second branch of the Potter analysis requires the Court to determine whether a reasonable person would have concluded that the change in the term, or terms, imposed by QEC were substantial ( Potter at para 34 ). QEC unilaterally imposed the demotion upon the plaintiff, effective February 28, 2011.

This demotion constituted a substantial change in the essential terms of the employment relationship in the following ways: 1. The plaintiff was not permitted to return to work unless and until he signed QEC’s “offer” of re-employment; 2. The plaintiff was to be transferred from a supervisory to non-supervisory position, with a concomitant loss of responsibility and status; 3. The demotion was contingent upon there being, within the corporation, a “suitable position […] available at that time”; 4. The demotion was contingent upon the proposed demotion not causing “a bumping action”; 5.

The demotion, if effected, would be for an indeterminate period of time; 6. If there were to be no “appropriate position” available, the plaintiff was to be laid off and placed on “O-priority” hiring status; 7. This potential lay-off was to be indeterminate in duration; 8. The demotion, if effected, would result in “a corresponding adjustment in pay,” that is, a lower salary; and, 9.

The plaintiff would lose status as his office would be moved from the executive management floor to a small cubby downstairs by the boiler. [ 63 ] By every objective measure, the breach of the employment contract by the employer constituted a substantial change in the parties’ employment relationship. [ 64 ] In oral argument, Counsel for QEC noted: … Farber stands for the proposition that if you have a good employee, a loyal employee and nothing stands in the way, you can’t simply say to them, “We’re unilaterally changing your obligations.” [ 65 ] He then made the following concession: If that were the case, as I indicate, I would be so bold as to say I would concede that this was a constructive dismissal, but it’s not because it’s a disciplinary measure.

That’s the fundamental difference in this case. [Oral Argument] [ 66 ] Significantly, Counsel did not refer the Court to any case law which supports his proposition. [ 67 ] I do not read the Supreme Court of Canada’s decisions either in Farber or Potter, to support QEC’s proposition. Both cases set out the applicable test clearly: a unilateral and substantive change to an essential term of the contract by the employer may (not must) be treated by the employee as a constructive dismissal.

The fact that such a unilateral and substantive change is characterized by the employer as part of a scheme of “progressive discipline” does not exempt it from the clear provisions of the common law respecting constructive dismissal. [ 68 ] However it may be construed by QEC, the purported “Disciplinary Suspension – Demotion” of the plaintiff constituted substantial

and serious changes in his contract of employment. Indeed, as noted earlier, the plaintiff was not permitted to return to work until hesigned the employer’s “offer” of re-employment. This so called ‘disciplinary’ action resulted in the constructive dismissal of theplaintiff. Consequently, the plaintiff is entitled to damages. [69] Having found the plaintiff was dismissed constructively by reason of his demotion, there is no need to consider whether thedefendant’s pattern of aggressive “discipline” in this case also constituted a constructive dismissal. VI. Damages A.

Length of reasonable notice [70] The plaintiff claims 24 months’ pay in lieu of notice. In oral argument, Counsel cited the following cases in support: Paquette vTeraGo Networks Inc, 2015 ONSC 4189, [2015] OJ No 3435 (QL); Bardal v The Globe & Mail Ltd, (ON SC), [1960]OJ No 149, 24 DLR (2d) 140 [Bardal]; and Mitchell v Lorell Furs Inc (1991), 108 NSR (2d) 425, [1991] NSJ No 205 (QL).

These casesfeatured the following notice awards, respectively: ? 17 months for a 14-year employee; ? 12 months for a 17-year employee; and ? 18 months for a 15-year employee. [71] In the event that the Court finds the defendant liable, Counsel for the defendant suggests a range of 12 to 16 months of salary in lieuof notice. [72] The applicable law respecting adequate notice may be found in the dated, but still leading, case of Bardal at para 21: There can be no catalogue laid down as to what is reasonable notice in particular classes of cases.

The reasonableness of the notice mustbe decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant,the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of theservant. [73] The calculation of reasonable notice is not a scientific exercise, but rather, a principled art: Determining the period of reasonable notice is an art, not a science. In each case trial judges must weigh and balance a catalogue ofrelevant factors.

No two cases are identical; and ordinarily, there is no “right” figure for reasonable notice. Instead, most cases yield arange of reasonableness (Minott v O’Shanter Development Co, (ON CA), [1999] OJ No 5 at para 62, (1999), 42 OR(3d) 321, Laskin J [Minott]). [74] Nor is there any general principle or ‘rule of thumb’ which must be considered. The trial judge is to balance and weigh the relevantfactors in calculating the award (Minott at paras 72-74). [75] The following factors militate in favour of a larger award: 1. The plaintiff’s management position from 2005 onwards; 2.

The plaintiff’s 16 years of service with the defendant; and 3. The relative scarcity of similar positions in the Arctic.

[76] The following factors militate towards a lesser award: 1. The plaintiff’s relatively young age; 2. The plaintiff failed to avail himself of opportunities to upgrade his education and qualifications, although it had been offered to himover the course of his employment, at the defendant’s expense. [77] In all the circumstances, the Court rules that 18 months is a reasonable period of notice in this case. B.

Mitigation [78] A plaintiff who suffers a civil wrong is required to mitigate his or her losses. [79] On mitigation, Counsel for the plaintiff referred to Red Deer College v Michaels (1975), (SCC), [1976] 2 SCR324, [1975] SCJ No 81; Boddington v Vaughan Electronics Ltd (1987), (NB KB), 81 NBR (2d) 222, [1987] NBJ No535 (QL), aff’d (1988), (NB CA), 88 NBR (2d) 1 (NBCA), [1988] NBJ No 234 (QL); and Deplanche v LeggatPontiac Buick Cadillac Ltd, [2008] OJ No 1420, (ON SC). [80] Counsel for QEC argues that any notice award should be reduced by fifty per cent because the plaintiff did not mitigate hisdamages.

Counsel noted that the plaintiff could have mitigated his damages by accepting the January 2011, offer made by thedefendant, which would have paid him $105,000 per year. He would have been paid well during what was characterised as a “temporarydemotion.” [81] The reality is that, by January 2011, there was a total breakdown in trust and respect between the parties. Indeed, the atmospherewas extremely acrimonious, if not poisonous. It would have been manifestly unreasonable to expect anyone in the plaintiff’s position tocontinue his employment on the new terms offered by QEC (See e.g.

Hynes v Qulliq, 2013 NUCJ 25, [2013] NuJ No 30). [82] Counsel for QEC also submitted that the plaintiff was sought out and offered two different supervisory job offers, which he turneddown. The first offer came from Uqsuq Fuel Corporation, Nunavut’s provider of heating fuel. The position was based in Iqaluit. Thesecond came from Nasittuq Corporation. That position involved work on the North Warning System and would have required travelbetween Iqaluit and Alert.

These positions offered similar responsibilities and remuneration to his employment with the defendant.Furthermore, the plaintiff never sought out or applied for alternative employment. [83] The plaintiff testified that he turned down the two job offers because he had safety concerns about one, and the other would haverequired periods of time away from home.

The plaintiff also testified that he did not apply for other work because he felt he did not havethe requisite qualifications. [84] On the first point, the reality in Nunavut is that many, if not most professionals and skilled tradespeople are required to spend timeaway from home on duty travel. Good jobs here are often extremely hard to find. The plaintiff failed to mitigate his damages by refusingto consider these job offers seriously.

On the second point, failure to make any effort at all to seek alternative employment is a failure tomitigate. [85] Consequently, any notice award has to reflect these failures to mitigate his damages. In these circumstances, it would be just toreduce the amount of the award by approximately forty per cent, or seven months. C. Expenses [86] The plaintiff testified that he incurred expenses totalling $2,778.34 in an effort to upgrade his education in Ottawa. That amount isreasonable in the circumstances and is awarded to the plaintiff.

VII. CONCLUSION [ 87 ] The total notice award less the reduction for the failure to mitigate is 11 months. The plaintiff’s calculation of his cumulative losses for that period total $150,043.41. This calculation was not challenged by QEC. The plaintiff is also awarded his consequent and reasonable expenses totalling $2,778.34. The total award, therefore, is $152,821.75. [ 88 ] The plaintiff is also awarded costs and pre-judgment interest. The Court is prepared to receive written submissions from the parties concerning this part of the award. Dated at the City of Iqaluit this XXth day of February, 2016 ___________________ Justice Paul Bychok Nunavut Court of Justice