COURT FILE NO.: 43/03 and 51/03

DATE: 20031015

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

mcrae, jennings and ferrier jj.

B E T W E E N:

BARBARA CARNEGIE

Respondent

• and -

LIBERTY HEALTH

Appellant

Donald E. Crabbe, for the Respondent

Robert W. Little, for the Appellant

HEARD: October 15, 2003

MCRAE J.: (Orally)

1This is an appeal from Loukidelis J., wherein he found that the respondent Carnegie was constructively dismissed from her employment with the appellant, Liberty Health and awarded damages in the amount of $20,668 and costs.

2The principle issue on appeal was the finding of constructive dismissal. The respondent, a thirteen year employee of the appellant had by August, 2000, achieved the position of Director, National Field Sales and Service, reporting to the Senior Vice President, Mr. Khemani. Marilee Mark, who was Director of Corporate Benefits also reported to the same senior vice-president.

3Effective, February, 2001, Ms. Mark was appointed to the new position of Assistant Vice-President, Group Market Sales. The respondent had hoped that she would have received this promotion and was extremely upset. The new structure required her to report to Ms. Mark rather than to the senior vice-president. She adamantly and consistently refused under any circumstances to report to Ms. Mark. The company attempted to ease her disappointment by giving her three options: (i) she could remain in her same position and report to Ms. Mark; (ii) take the position of Director of Underwriting or (iii) take a new position as Director of Special Projects.

4The respondent refused any of these options and on February 16, 2001, she wrote the company as follows, Attention: Ashim Khemani:

“This letter is in response to your letter dated February 14, 2001.

Unfortunately, your letter does not clearly outline the responsibilities of the role described as Director, Special Projects and the role does not appear to be an opportunity to further develop my career. Additionally, you have not stated the target incentive level for this role. Nevertheless, my understanding is that the incentive level is substantially lower than what I currently receive, resulting in an overall reduction in my current total compensation. As previously stated, a reduction in salary is not acceptable to me. As a result, I cannot accept this offer.

As previously discussed, I wish to remain in a sales leadership role. I would be happy to continue in my current role as Director, National Field Sales within the same structure and reporting directly to you. Also, as previously stated, I am not prepared to report to Marilee Mark in any capacity.”

5When the company did not resile from its proposed structural changes, she left their employment.

6We are aware that the test in determining constructive dismissal is an objective one as found by the Court of Appeal in Smith v. Viking Helicopter Ltd. (1989), 24 C.C.E.L. 113.

“In my opinion a damage action for constructive dismissal must be founded on conduct by the employer and not simply on the perception of that conduct by the employee. The employer must be responsible for some objective conduct which constitutes a fundamental change in employment or a unilateral change of a significant term of that employment. A decision to change its manner of conducting its business or to move to another place of business does not necessarily result in a fundamental breach of its contract with its employees as to constitute a constructive dismissal.”

7In our view, the trial Judge misconstrued a change in the respondent’s reporting obligation from the Senior Vice-President to Ms. Mark, as a transfer of responsibility from her to Ms. Mark. There was no evidence on which the trial Judge could conclude that there was such a transfer of responsibility.

8In view of this identifiable error by the trial Judge, the finding of wrongful dismissal was unreasonable. See Schwartz v. Canada (1996), 133 D.L.R. 289. This was a structural change made by the company which the respondent was not willing to accept as she refused at all times to report to Ms. Mark.

9We agree with argument put by counsel for the appellant that where the impact upon an employee’s responsibilities is not fundamental, altered reporting will not result in a finding of constructive dismissal.

10There having been no constructive dismissal, the action is dismissed with costs. The appeal is allowed and the cross-appeal is dismissed.

11The appeal book will read as follows: “This appeal is allowed with costs to the appellant fixed at $3,500 including disbursements and GST.”

MCRAE J.

JENNINGS J.

FERRIER J.

Date of Reasons for Judgment: October 15, 2003

Date of Release: October 16, 2003

COURT FILE NO.: 43/03 and 51/03

DATE: 20031015

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

mcrae, jennings and ferrier jj.