The appellant challenged a Quebec Court of Appeal decision upholding dismissal of his action for damages after his employer eliminated his regional manager role during restructuring and offered him management of a single underperforming branch without a guaranteed base salary.
The Supreme Court held that under Quebec civil law, constructive dismissal occurs where an employer unilaterally imposes substantial changes to the essential terms of employment, assessed objectively from the standpoint of a reasonable person at the time of the offer.
The Court found the offer constituted a significant demotion and materially undermined the employee's financial security, and that post-offer sales evidence was irrelevant because those results were not reasonably foreseeable when the offer was made.
The appeal was allowed and one year's remuneration in lieu of notice was fixed at $150,000, with interest, additional indemnity and costs.
