Irvine v. Gauthier (Jim) Chevrolet Date:, 2013 MBCA 93

Citation: Irvine v. Gauthier (Jim) Chevrolet Date: 20131018 Oldsmobile Cadillac Ltd., 2013 MBCA 93 Docket: AI 12-30-07887 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Barbara M. Hamilton Mr. Justice Marc M. Monnin Mr. Justice William J. Burnett BETWEEN : ) R. M. Beamish and KELLY IRVINE ) R. M. Caithness ) for the Appellant (Plaintiff) Appellant ) ) D. G. Hill and - and - ) S.

Cadili ) for the Respondent ) JIM GAUTHIER CHEVROLET ) Appeal heard: OLDSMOBILE CADILLAC LTD. ) May 21, 2013 ) (Defendant) Respondent ) Judgment delivered: ) October 18, 2013 HAMILTON J.A. [ 1 ] This appeal concerns a claim for wrongful dismissal. The key issue raised is constructive dismissal. [ 2 ] The plaintiff, Kelly Irvine, sued his employer, Jim Gauthier Chevrolet Oldsmobile Cadillac Ltd. (the dealership), for wrongful dismissal. The dealership defended on the basis that it did not terminate the plaintiff’s employment, but that he quit. [ 3 ] The trial judge agreed.

Because of this finding, the judge concluded that he was not required to address the issue of constructive dismissal and dismissed the plaintiff’s claim. [ 4 ] The plaintiff appeals on numerous grounds, including that the judge made a number of palpable and overriding errors of fact. In my view, his crucial ground of appeal is that the judge erred in law by not addressing the plaintiff’s claim for constructive dismissal, which he argues was established even on the findings of fact found by the judge. [ 5 ] As will be seen, I agree with the plaintiff and I would allow his appeal.

Background [ 6 ] The plaintiff worked for the dealership for 19 years, the majority of that time as general manager of new-car sales and as a vice-president. He earned an excellent income. There was no written contract of employment. [ 7 ] The plaintiff’s wife also worked at the dealership. [ 8 ] The plaintiff’s eyesight started to deteriorate in 2005. He was diagnosed with diabetes. By June 2007, he was blind in one eye.

[ 9 ] On May 5, 2009, the plaintiff and Mrs. Irvine were called into a meeting (the May 5th meeting), without notice, with Jim Gauthier, the dealership’s owner. Also present were his son, Randy Gauthier, and the dealership’s comptroller, Bill Huntly. What occurred at that meeting is crucial to this case and will be addressed more fully in due course. Suffice it to say at this point, the meeting was short and concerned the impact of the plaintiff’s deteriorating eyesight on his work.

After the meeting, the plaintiff left the dealership and never returned, except to pick up his personal items. [ 10 ] On May 7, 2009, the dealership circulated a notice (the May 7th notice) to its staff that the plaintiff was taking a leave of absence for health reasons. It read, in part, as follows: As most of you are aware, our Vice President Kelly Irvine has had some health problems in the past couple of years, especially with his eyes. Kelly has decided that it would be best to take a leave of absence and deal with his health problems. . . . . .

I know that we all wish that his health problems lessen and allow him to return to work. .... [ 11 ] The dealership paid the plaintiff for two weeks after the May 5th meeting. It filed employer forms with Great West Life in support of an application by the plaintiff for long-term disability, which the plaintiff never made. [ 12 ] On June 1, 2009, the dealership’s new-car manager was promoted to general manager, the plaintiff’s position. [ 13 ] In October 2009, the plaintiff obtained employment with another company as a car salesman.

At that time, the dealership removed the plaintiff from its “employee list.” The plaintiff’s new employment lasted approximately eight months until he “was fired … in May of 2010” (at para. 58). [ 14 ] The plaintiff filed his statement of claim in August 2009, alleging that he was “wrongfully dismissed … from his employment ... without just cause, reasonable notice, or payment in lieu of notice when … he was told [at the May 5th meeting] to go on long-term disability, or he would be terminated.” In the alternative, he asserted that he was constructively dismissed. [ 15 ] In its statement of defence, the dealership denied that the plaintiff was told that he would be terminated if he did not go on long term disability insurance and asserted that “the termination took place as a result of the plaintiff quitting his job with the defendant and not as a result of any action or actions of the defendant.” [ 16 ] In response to the claims for both wrongful and constructive dismissal, the defendant also pled in its statement of defence that: (

a) On or about May 5, 2009, Jim Gauthier, Randy [Gauthier] and Bill Huntley [ sic ] met with the plaintiff and his wife Gale [ sic ] Irvine – who was also an employee of the defendant – and advised the plaintiff that they felt his physical condition – caused by diabetes and blindness in one eye with deterioration in the other – had severely deteriorated to the point of preventing the plaintiff from performing his duties as General Manager of the dealership; [ 17 ] At the trial, the plaintiff and Mrs. Irvine testified.

In addition to Jim Gauthier, Randy Gauthier and Bill Huntly, the dealership called three employees who worked at the dealership to testify about the effect of the plaintiff’s deteriorating eyesight on his work. Neither party called Gail Sinclair, another employee, who assisted the plaintiff with his reading and paper work. [ 18 ] Neither party called any medical evidence about the plaintiff’s health and eyesight problems and his prognosis.

Judge ’s Reasons [ 19 ] The judge identified the major issue to be (at para. 4): ... [W]hether the contract of employment was terminated by the Gauthier dealership or by [the plaintiff]. To put it more bluntly, I must determine the answer to the following question “Did the Gauthier dealership fire [the plaintiff] or did he quit?” [ 20 ] He then addressed when the issue of constructive dismissal would arise (at para. 5):

If I should conclude that [the plaintiff] terminated the employment contract, outside of provisional damages, there will be no other issue or issues to resolve. However, if I should find that the Gauthier dealership dismissed [the plaintiff] as an employee, I must determine if that dismissal, whether direct or constructive, was without cause and thereby wrongful. [ 21 ] The judge reviewed the differing evidence as to the effect of the plaintiff’s eyesight on his work performance. The judge noted that, “ [a]ccording to [the plaintiff], following the eye surgeries he could see fine.

The issues with his vision did not affect his ability to do his job, at least as far as he is concerned” (at para. 17). [ 22 ] He summarized the evidence from Jim Gauthier about the effect that the plaintiff’s deteriorating eyesight had on his work performance and the need for assistance. He then wrote (at para. 25): Jim Gauthier testified that by May of 2009 he had come to the conclusion that [the plaintiff] had to take some time off. It was decided that [the plaintiff] should go on disability, get his eye fixed and then come back to work where his job would always be waiting for him.

Jim Gauthier decided to meet with [the plaintiff] on May 5, 2009 because as he said “It had gotten out of control.” Jim Gauthier then referred to the fact that on May 4 [the plaintiff] had a blow-up with a good customer. [ 23 ] The judge reviewed the evidence of the plaintiff, Mrs. Irvine, Jim Gauthier and Bill Huntly at some length as to what occurred at the May 5th meeting.

He noted that, “[t]he accounts of Jim Gauthier, Randy Gauthier and Bill Huntly as to what transpired during the course of the meeting in Randy Gauthier’s office on May 5, 2009, are markedly different from the accounts provided by [the plaintiff] and [Mrs.] Irvine” (at para. 37). [ 24 ] He did not review the evidence of Randy Gauthier, but stated that “his evidence is supportive of what Jim Gauthier had to say when he testified as to what transpired at the meeting on May 5” (at para. 42). [ 25 ] He accepted the evidence of the three employees called to testify with respect to “ the impact that [the plaintiff’s] deteriorating eyesight had on [his] ability to perform his duties” (at para. 43). [ 26 ] With respect to the disability insurance, the judge found that (at para. 54): The evidence is clear that the Gauthier dealership truly believed [the plaintiff] was applying for disability because the dealership submitted its portion of the application for disability payments to [Great West Life] on May 26, 2009.

Of interest in terms of whether [the plaintiff] had been dismissed as an employee of the Gauthier dealership on May 5, 2009, the Gauthier dealership advised [Great West Life] on May 26 that “Kelly is a permanent, full time employee who works for over 40 hours a week and is paid a salary semi- monthly”. [ 27 ] The judge recognized that the crucial event was the May 5th meeting and that he had to address the credibility issues arising from the differing versions as to what occurred at that meeting. He found that the plaintiff’s evidence, supported by Mrs.

Irvine, that he was dismissed at the May 5th meeting “is less probable than the position taken by the Gauthier dealership, namely, that [the plaintiff] was advised to take time off, convalesce and apply for disability insurance and that when he was better, his job at the dealership would be waiting for him” (at para. 73). [ 28 ] He explained that he relied on the evidence of Bill Huntly because he was an independent witness (at para. 73): …. I have placed considerable reliance upon the evidence of Bill Huntly who was present during the whole of that meeting. He heard what was said. He related that to me.

He is truly an independent witness no longer an employee of the Gauthier dealership with no interest in the outcome of this case. In essence, Mr. Huntly’s evidence is that [the plaintiff’s] employment was not terminated during the course of the May 5 meeting.

Rather, it was suggested by Jim Gauthier that [the plaintiff] go on short-term disability or long-term disability until his health recovered at which time he could come back to work if he felt he could do the job. [ 29 ] The judge found that the plaintiff’s “health had deteriorated to the point that he was unable to perform those duties” and that he, and Mrs.

Irvine, “were in a state of self-denial as to [the plaintiff’s] condition and ability to do his job” (at para. 74). [ 30 ] With respect to the lack of medical evidence, the judge wrote (at paras. 76-77, 79): The question has to be asked “Why is it that no medical evidence was called at the trial of this action to demonstrate that [the plaintiff] was not disabled and would not have qualified for disability benefits had he applied?”

I cannot help but wonder why it is, if [the plaintiff] truly believed he was not disabled, he did not produce medical evidence to that effect to the Gauthier dealership following the meeting on May 5, 2009.

In the face of medical evidence that [the plaintiff’s] ability to perform as General Manager was not adversely affected by the problems he was having with his eyesight, in my view, the Gauthier dealership would have had no option but to permit [the plaintiff] to continue in his role as General Manager. [emphasis added] [ 31 ] The judge found that the May 7th notice circulated to the employees, the inclusion of the plaintiff on the dealership’s employee list after the May 5th meeting, and its submission of forms to Great West Life, all were facts inconsistent with the termination of the plaintiff. [ 32 ] He concluded that the plaintiff quit his job (at para. 86): Having reviewed and considered all of the evidence and the submissions of counsel, I have concluded that it is more likely than not that [the plaintiff] remained as an employee of the Gauthier dealership after May 5, 2009.

It is more likely than not that it was [the plaintiff] who, after May 5, 2009, terminated his employment with the Gauthier dealership by quitting his job. [ 33 ] He assessed damages provisionally “in the sum of $346,111.04 together with interest pursuant to the provisions of the legislation and costs” (at para. 87).

Positions of the Parties The Plaintiff [ 34 ] The plaintiff has numerous grounds of appeal, which can be grouped into three broad categories: 1) findings of fact and credibility; 2) lack of reasons; and 3) errors of law with respect to the application of the proper legal tests for wrongful dismissal and constructive dismissal. 1. Findings of Fact and Credibility [ 35 ] The plaintiff asserts that the judge failed to make proper assessments of credibility on the basis of irrelevant and erroneous considerations and without reference to the evidence and inconsistencies of the witnesses.

He argues that the judge erred in finding Bill Huntly to be an independent witness. As well, in addition to misapprehending the evidence, he says that the judge was wrong not to draw an adverse inference because the dealership did not call Gail Sinclair. 2. Lack of Reasons [ 36 ] The plaintiff argues that the judge’s reasons were either lacking because he failed to address a number of issues and certain evidence or, where he did address certain issues and evidence, his reasons were inadequate. These arguments often overlap with his grounds of appeal premised on errors of law. 3.

Errors of Law [ 37 ] The plaintiff asserts that the judge failed to articulate or address the proper legal tests for wrongful and constructive dismissal. The Dealership [ 38 ] The dealership responds that the case was totally fact driven and that, in the absence of any palpable and overriding error in making findings of fact or credibility, this court cannot intervene. It asserts that the judge made no palpable and overriding errors or any errors of law. [ 39 ] Further, it submits that the judge’s reasons were detailed and addressed all relevant issues.

It says that the drawing of an adverse inference is a matter of discretion for a judge and that the judge did not err by not drawing an adverse inference because it did not call Gail Sinclair as a witness. [ 40 ] Significantly, the dealership contends that the judge did not have to consider or apply the tests for wrongful or constructive dismissal because the judge found that the plaintiff had quit his job.

Analysis and Decision [ 41 ] I am of the view that this appeal can be resolved without identifying and addressing the many grounds of appeal raised by the plaintiff with respect to the judge’s findings of fact and credibility. On the basis of the judge’s findings, and the evidence that he accepted, the critical ground of appeal concerns the following question: Did the judge err when he failed to consider whether the plaintiff was constructively dismissed? [ 42 ] The identification and application of the correct legal principles is a question of law calling for the standard of review of correctness. See Johnson v.

BFI Canada Inc. et al. , 2010 MBCA 101 at para. 39 , 258 Man.R. (2d) 268 . Therefore, the failure to address a relevant legal principle is an error of law. In that situation, an appellate court must determine the issue based on, wherever possible, the findings of fact and credibility assessments of the trial judge, unless any of those findings cannot be sustained by the evidence. See Giesbrecht v. Canada Life Assurance Co. et al. , 2013 MBCA 53 , [2013] 8 W.W.R. 24 . Constructive Dismissal – The Law [ 43 ] “Termination of employment can take many forms, not just that of a dismissal.” See Howard A.

Levitt, The Law of Dismissal in Canada , looseleaf, 3d ed. (Toronto: Thomson Reuters Canada Limited, 2013) vol. 1, in which he explains that (at p. 5-1): …. A termination can be defined as any act on the part of an employer which repudiates the essential obligations imposed on it by the contract of employment. [ 44 ] A constructive dismissal arises when an employer makes a fundamental change going to the root of the employment contract.

Levitt expands on this (at pp. 5-1 – 5-2): In the absence of cause, any fundamental breach by the employer of a major term of the employment relationship allows the employee to take the position that a constructive dismissal has occurred. Even if the employer has never given the employee a formal discharge, there can be a dismissal at law.

However, it must be a fundamental, rather than just a minor or incidental, term of the employment relationship which is breached in order for a constructive dismissal to exist and it must be a fundamental breach of such fundamental term of employment. “In each case, it is a question of what are the terms of the contract, whether there has been a breach, and, if there has been a breach, whether it amounts to a fundamental breach.” In other words, it must be a change that goes to the “root of the employment contract”.

It is an implied term in a contract of employment that the employer will not make a substantial change in the duties and status of the employee so as to constitute a fundamental breach of contract. Whether a change in the term of employment gives rise to a constructive dismissal depends on the nature and degree of the breach, the intention of the parties and the prevailing circumstances. [emphasis added] [ 45 ] See also Ellen E.

Mole, Wrongful Dismissal Practice Manual , 2d ed., looseleaf (Markham: LexisNexis Canada Inc., 2005) vol. 1, for a discussion of these general principles, in which she writes (at para. 3.1): Thus an employee who is forced to resign rather than accept a fundamental change in employment is not precluded from suing by the fact that he or she resigned, because he or she has already been constructively dismissed.

His or her contract is regarded as having been terminated by the employer’s refusal to abide by its original terms and he or she is entitled to pay in lieu of reasonable notice. …. [emphasis added] [ 46 ] Onus is an important consideration in cases alleging constructive dismissal, which is determined on an objective basis based on the facts known to the employee. Mole explains this (at para. 3.3): The onus is on the employee to prove a fundamental breach has occurred.

The question of whether a constructive dismissal has occurred is a question of fact, which depends on the nature of the relationship between the parties as well as the express or implied terms of their contract. .... Whether or not a fundamental breach has occurred must be judged objectively and reasonably , not just based on the employee’s perception of the employer’s conduct. It must, however, be judged on the facts within the employee’s knowledge. ….

[emphasis added] See also Randall Scott Echlin & Jennifer Mary Fantini, Quitting for Good Reason: The Law of Constructive Dismissal in Canada(Toronto: Canada Law Book, 2001) at 35, and Johnson v. General Motors of Canada Ltd., 2013 ONCA 502 at para. 68, 307 O.A.C.359, for a recent application of the objective test. [47] These general principles have been explained in a number of Supreme Court of Canada and appellate court decisions,the most well known being Farber v. Royal Trust Co., (SCC), [1997] 1 S.C.R. 846.

In that case, Gonthier J. wrote (atpara. 24): Where an employer decides unilaterally to make substantial changes to the essential terms of an employee’s contract of employment andthe employee does not agree to the changes and leaves his or her job, the employee has not resigned, but has been dismissed. Since theemployer has not formally dismissed the employee, this is referred to as “constructive dismissal”. By unilaterally seeking to makesubstantial changes to the essential terms of the employment contract, the employer is ceasing to meet its obligations and is thereforeterminating the contract.

The employee can then treat the contract as resiliated for breach and can leave. In such circumstances, theemployee is entitled to compensation in lieu of notice and, where appropriate, damages. [48] While Farber was a case decided under the Civil Code of Québec, S.Q. 1991, c. 64, common law courts havecontinually cited it as authoritative. See, for example, Piron v. Dominion Masonry Ltd., 2013 BCCA 184, 337 B.C.A.C. 103; Allen v.Ainsworth Lumber Co., 2013 BCCA 271, 339 B.C.A.C. 113; Lewis v. Terrace Tourism Society, 2010 BCCA 346, 290 B.C.A.C. 105;Fisher v.

Lakeland Mills Ltd., 2008 BCCA 42, 250 B.C.A.C. 311; and Pathak v. Jannock Steel Fabricating Co. et al., 1999 ABCA 8,228 A.R. 312. See also Evans v. Teamsters Local Union No. 31, 2008 SCC 20, [2008] 1 S.C.R. 661, an appeal from a common lawjurisdiction (the Yukon Court of Appeal), in which Bastarache J., for the majority, cited Farber. He wrote (at para. 26): …. … [T]he very purpose behind recognizing constructive dismissal is to acknowledge that where an employer unilaterally imposessubstantive changes to an employment contract, the employee has the right to treat the imposition of those changes as termination.

Thistermination is every bit as “real” as if the employee were actually told of the dismissal .... [49] Employees take leave of absences for many reasons, often at their request and usually in consultation with theiremployer.

However, “a forced leave of absence may constitute a constructive dismissal, particularly where it is an unpaid leave ofindefinite duration, with no guarantee of eventual re-employment” (Echlin & Fantini at p. 392). [50] Mole makes the point that there is no practical difference between being “laid-off” and a “leave of absence” (at para.2.24): Where a cessation of employment is permanent and there is no intention to recall the employee or there is no assurance of the jobresuming, a dismissal has occurred, regardless of whether it is called a termination, a layoff or a leave of absence.

Suspension ofpayment for an indefinite period, without abolition of the position itself, may in some circumstances constitute a dismissal. …. [emphasis added] [51] Whether there was a plan, or a real and meaningful dialogue, between the employer and the ill employee prior to theforced leave of absence is often an important consideration. See, for example, Card Estate v. John A. Robertson MechanicalContractors

(1985) Ltd., (1989), 26 C.C.E.L. 294 (Ont. Sup. Ct. (H. Ct. J.)) in which the employee (Card) was told to take a three-monthunpaid leave of absence after being away from work for ill health and a family crisis. Important in McKeown J.’s analysis in that casewas the fact that (at p. 310): ... [T]here was not a full and frank discussion with Mr. Card at the meeting of February 10 concerning the state of his health, and theleave of absence was presented to him as a fait accompli. [52] McKeown J. found that (at p. 308):

... [T]he complete removal of an employee’s duties and income for 3 months, with no guarantee of further work or compensation aftersuch a period, is a material alteration of an employee’s employment contract which goes to the root of the contract and shows that theemployer no longer intends to be bound by it. …. [emphasis added] [53] Similarly, in Bishop v. Carleton Co-operative Ltd. (1996), (NB CA), 176 N.B.R. (2d) 206 (C.A.), a27-year employee in the position of office manager was granted sick leave that was extended from time-to-time as a result of medicalcertificates.

After some time, he returned to work to find that his position was taken and that there was no further work. In affirming afinding of constructive dismissal, Bastarache J.A. wrote (at para. 8): … [T]he trial judge found no evidence to support the allegation that Mr. Bishop had to be replaced permanently or that there was afailure of consideration of his employment contract. The Cooperative took no steps to determine the likely duration of Mr. Bishop’sincapacity. It presented no evidence that his position had to be permanently filled so soon after the illness occurred.

The medicalevidence before the court established that Mr. Bishop had recovered and was capable of returning to his previous position on a full-timebasis. All of the evidence before the trial judge indicated that Mr. Bishop had been constructively dismissed without cause …. [emphasis added] [54] There are many cases where the medical evidence, or the employer’s genuine plan for reintegration, have successfullyresponded to a claim for constructive dismissal. See, for example, Gillette v.

Ian Sisett Law Corp., 2008 BCSC 1116 (QL), wheremedical evidence indicated that the plaintiff was totally disabled and that there was no estimate of when she would return to work. [55] Where an employer pleads that an employee’s illness has rendered the employee incapable of doing their job, the onusis on the employer to demonstrate that is the case.

Therefore, while the initial onus is on the plaintiff to prove a fundamental breach ofthe employment contract, once that has been established, the onus shifts to the employer to demonstrate just cause or frustration of thecontract by the employee. [56] This shifting onus has been noted in cases involving both wrongful dismissal and constructive dismissal. For theformer, the employer has the onus to demonstrate just cause. See Convergys Customer Management Inc. v. Luba et al., 2005 MBCA 29,192 Man.R. (2d) 129, and Honda Canada Inc. v. Keays, 2008 SCC 39 at para. 8, [2008] 2 S.C.R. 362.

As for constructive dismissal,particularly in the case of an ill employee, there is little, if any, distinction between termination for just cause and frustration of theemployment contract. See Gielen v. Ste. Anne (Town), 2009 MBQB 292, 247 Man.R. (2d) 105, in which Beard J. (as she then was),wrote (at para. 21): Illness as a basis for the termination of an employment contract is dealt with under the headings of both frustration and just cause,although the principles are similar, if not the same. ….

See also Levitt text at pp. 6-37 – 6-72, 6-89 – 6-91. [57] Whether a contract has been frustrated due to illness depends on a number of factors including, the terms of the contract,how long the employee is likely to remain sick, the nature of the employment, the nature of the illness, the availability of sick leave andpay, the period of past employment and how long the employer should reasonably be expected to await the employee’s return. See Moleat para. 4.229. Generally, with a long-term employee, it is more difficult to prove frustration. See White v.

Woolworth (F.W.) Co.(1996), (NL CA), 139 Nfld. & P.E.I.R. 324 at para. 34 (Nfld. C.A.). Permanent disability does bring aboutfrustration, but temporary sickness does not. See McLean v. Miramichi (City), 2011 NBCA 80, 380 N.B.R. (2d) 398, and WightmanEstate v. 2774046 Canada Inc. et al., 2006 BCCA 424, 231 B.C.A.C. 75. [58] Evidence of frustration or just cause is typically very well documented with doctor’s reports or other credible evidenceattesting to an employee’s permanent disability and prognosis.

In Gielen, Beard J. found that the employment contract was frustratedafter noting that the employee’s shoulder injury “according to [the] doctors, would never get better” (at para. 46). [59] With that background as to the law pertinent to constructive dismissal, I turn to the question raised earlier. Did the judge err when he failed to consider whether the plaintiff was constructively dismissed? [60] The judge concluded that the plaintiff remained an employee of the dealership after May 5th and that the plaintiff quithis job after that date.

In arriving at that conclusion, he failed to consider whether the plaintiff was constructively dismissed. Given thepleadings and the circumstances of the May 5th meeting and what occurred after, as found by the judge, constructive dismissal was a liveissue that he was required to address. In other words, the judge should have addressed whether the plaintiff had demonstrated that thedealership had fundamentally breached the employment contract by treating the plaintiff as it did.

[ 61 ] Given that the judge did not do so, this court must address this issue. [ 62 ] The circumstances, as found by the judge, were that the plaintiff and his wife were called into Jim Gauthier’s office, without prior notice. There had been no prior discussions between the plaintiff and the dealership about his health issues and the effect on his performance. The evidence does disclose that he was having difficulties. Jim Gauthier knew about some health issues, but did not pursue specifics with the plaintiff and had only a rudimentary knowledge of the plaintiff’s condition and prognosis.

He did not elicit any further information from the plaintiff at the May 5th meeting. This is evident from the following questions and answers in his cross- examination. Q. What did you know about his medical condition? A. We knew he had diabetes. We knew that he had high blood pressure. We knew that he had lost the one eye. That was, basically, what we knew about him. Q. What did you know about any treatments that he might get that would get him, get him back to work, working for you? A.

Well, he told us that he had a cataract situation; he told us that they were treating him for this supposed gravel in his eye and that the spots that he kept seeing and that the, the prognosis was good. That they were able, that they were going to be able to do this. Q. Did you call [the plaintiff] into the meeting of May 5th or at any time before that and say: You know what … we’d like to get an idea as to what treatments you can get and how you can get back to work? A. No, we didn’t.

We asked him how his eye was doing, and he was telling us that it wasn’t getting much better, but he said: I’m taking treatments for it, and he kept going to the doctor, so we just assumed that he knew what he was doing about it. Q. In fact, at the meeting of May 5th, you never even asked him any questions about his eyes or his treatment; did you? A. No. We didn’t. [emphasis added] [ 63 ] At the meeting there was no discussion; only Jim Gauthier spoke. He told the plaintiff that he could return when he was “better” and his job would be waiting for him. However, the plaintiff’s position was filled within a month.

There was no invitation to the plaintiff to obtain a medical report or to return to discuss the difficulties he was having in order to develop a mutually satisfactory plan. Rather, the plaintiff was removed from his position indefinitely and lost his salary after two weeks. What occurred at the May 5th meeting can only be described as a “fait accompli,” decided unilaterally. The plaintiff was a long-standing senior employee. He was effectively told to go home and to apply for disability coverage.

This was, in my view, a forced leave of absence. [ 64 ] The judge’s findings that the dealership’s actions (maintaining him on the employee list, sending the May 7th memo to its staff and forwarding documentation to Great West Life) countered the plaintiff’s allegation that the dealership terminated him at the May 5th meeting and are entitled to deference. However, when I apply the objective test to what occurred, I can only conclude that the plaintiff has demonstrated that on May 5th there had been a fundamental change in the employment relationship going to the root of his employment contract.

Therefore, the plaintiff demonstrated on a prima facie basis that the dealership breached the employment contract by not giving him reasonable notice in lieu of termination. [ 65 ] As explained earlier, the response to such a prima facie case can be met by an employer proving on a balance of probabilities that the employee was terminated for just cause or that the contract was frustrated. [ 66 ] Given that termination for just cause was not an issue, the question remains whether the plaintiff’s health frustrated the contract, thereby entitling the dealership to take the course of action that it did. [ 67 ] The plaintiff argues that frustration was not an issue raised by the dealership in its statement of defence and therefore need not be, and should not be, addressed. [ 68 ] There is some merit to that argument.

The dealership’s position throughout has been that the plaintiff quit his job

sometime after the May 5th meeting (although the exact date was never specified by the judge in his reasons). It did not defend on the basis that it had just cause to terminate the plaintiff or that the employment contract was frustrated because of the plaintiff’s health issues. Nonetheless, the pleadings emphasize the plaintiff’s inability to do his job because of his health. It seems to me that, in effect, the issue of frustration was raised, albeit indirectly.

As a result, I think it important that I address the issue. [ 69 ] As explained, the onus is on the employer to justify a defence involving allegations of a serious illness affecting an employee’s ability to do their job. This was the essence of the dealership’s position and I am of the view that it did not meet that onus. [ 70 ] The judge accepted the evidence that the plaintiff had health and eyesight difficulties and needed assistance from time- to-time. He concluded that the plaintiff’s health had deteriorated to the point that he was unable to perform his duties as general manager.

However, the dealership had no documentation by way of medical reports, or otherwise, attesting to the plaintiff’s prognosis and whether he was permanently disabled from doing his job. The dealership should have had meaningful discussions with the plaintiff. Through that process, medical information could have been made available. [ 71 ] The dealership’s conduct fell far short of what was required in the circumstances. I am persuaded that, based on the facts as found by the judge, the plaintiff has made his case for constructive dismissal.

Conclusion [ 72 ] The judge erred in law by not addressing the issue of constructive dismissal. On the facts, as found by the judge, the dealership constructively dismissed the plaintiff. As such, he is entitled to damages for wrongful dismissal. [ 73 ] I would allow the plaintiff’s appeal. Because the dealership did not appeal the judge’s provisional award of damages, I would award damages in accordance with such award and order costs in favour of the plaintiff for this appeal and the trial. J.A. I agree: J.A. I agree: J.A.