Court of Appeal for Ontario

Date: 2017-06-09 Docket: C62092 Judges: Laskin, Lauwers and Brown JJ.A.

Between

Jan Persaud and Natpak Enterprises Inc. Plaintiffs (Appellants)

and

Telus Corporation, Telus Mobility and Telus Enterprise Solutions Defendants (Respondents)

Counsel

Karen Zvulony, for the appellants

Todd Weisberg, for the respondents

Heard

May 4, 2017

Appeal

Appeal from the judgment of the Honourable Justice Benjamin T. Glustein of the Superior Court of Justice, dated April 5, 2016, with reasons reported at 2016 ONSC 1577.

Reasons for Decision

Lauwers J.A.:

[1] Introduction

[1] The appellant, Jan Persaud, was employed by Telus Corporation. She resigned on May 19, 2004 and then sued the respondents for constructive dismissal, for damages for intentional infliction of mental suffering, and for inducing breach of contract. Her action was dismissed. For the reasons that follow, I would dismiss the appeal.

A. Factual Overview

[2] The appellant started her employment with a predecessor of the respondent on January 13, 1997. She worked in various positions, and after April 23, 2003 worked as the Java Developer on the Product Development team.

[3] The appellant resigned two days after the resignation of her friend and mentor, Navaid Mufti, who was also her superior for most of her career at Telus.

[4] I now turn to the appellant's arguments on appeal.

B. The Constructive Dismissal Claim

[5] The appellant claims constructive dismissal on the basis of a significant change in her working conditions, specifically an increase in her working hours. She also claimed there was a poisoned work environment. The two grounds drove her to resign. She submits that this entitled her to damages for constructive dismissal in accordance with the principles in Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10, [2015] 1 S.C.R. 500.

[6] The trial judge agreed that either of these grounds could, in the right case, establish constructive dismissal. However, he dismissed the constructive dismissal claim for two reasons. First, he found that the appellant did not leave her employment because of changes to her working conditions. He noted, at para. 115:

I find that Persaud resigned because she was dissatisfied with the management of Telus, unhappy with the direction the company was taking, critical of the performance evaluation structure, and particularly unhappy with Telus' treatment of Mufti, her friend and mentor. She did not resign because of increased hours or a poisoned work atmosphere.

[7] This conclusion was fatal, since, as the trial judge stated, at para. 35: "an employee cannot claim damages for constructive dismissal when there is no causal link to the reason for the resignation, even if there has been a unilateral change to an essential claim of the contract."

[8] The appellant argues the trial judge erred in law in finding the "reasons for the 'resignation' must be related to the constructive dismissal."

[9] I disagree.

[10] The requirement for a causal link between the breach of contract and the damages suffered by the plaintiff is an essential element of a breach of contract claim. It is trite law and applies in constructive dismissal cases. The trial judge cited the correct legal principles at paras. 32-34.

[11] The appellant argues alternatively that the causation element could have been met had the trial judge considered it possible to combine the changes in working conditions with her distress at Mr. Mufti's departure. His failure to do so was a palpable and overriding error.

[12] I agree that such a finding was open to the trial judge on the evidence. But the idea that Mr. Mufti's departure was the proverbial "tipping point for her resignation" was addressed by the trial judge at para. 117, and he dismissed it on the evidence. The appellant has not demonstrated that he made a palpable and overriding error in doing so.

[13] The trial judge's second ground for dismissing the constructive dismissal claim is that the appellant acquiesced in or condoned the changes in her working conditions, particularly the increased number of hours she was required to work.

[14] If an employee consents to or acquiesces in the change to an essential term of the employee contract, it will not amount to a constructive dismissal: Potter, at para. 37. The case law recognizes that an employee faced with a unilateral change by an employer in the essential working conditions is to be given some time to notice the change and then to consider how best to respond. The trial judge set out the principles of law at paras. 39-42 of his reasons, and concluded, at para. 43:

An employee is entitled to a reasonable period of time to assess his or her circumstances and make an election. However, a considerably extended period of time will preclude an action for constructive dismissal. In most circumstances, courts will view an employee's willingness to remain in the altered position for a significant period of time as acceptance of the new terms, absent other mitigating factors. [Citation omitted.]

[15] There is no legal error in this statement.

[16] The trial judge assessed the evidence regarding the appellant's workload at para. 98 and following. The evidence shows that the appellant was under increased workload demands from 2002 until her resignation in May 2004. There is no doubt that she raised the issue of workload on a number of occasions and actively sought a transfer out of the Product Development team to a position that would be less demanding.

[17] Counsel points out that one of the appellant's coworkers resigned in the spring of 2003 and was not replaced until September 2003. The appellant was responsible for training the coworker's replacement, Santhalingam Jeyagaran ("Jey"). The appellant's evidence was that Jey's hiring did not permit her to reduce her working hours, as she expected. Counsel argues that after Jey's training was complete in November or December 2003, it was appropriate for the appellant to have a period of time within which to evaluate the situation.

[18] It was open to the trial judge, on the evidence, to reach that conclusion, but he did not, in part because the appellant remained silent on the workload issue between January 2004 when she requested a transfer and was refused, and the date of her resignation in May. The trial judge found that the reason for the appellant's departure was not the employer's failure to address the workload issue, but her own evidence, which he describes in paras. 112-13:

Persaud's evidence was that she "would have stayed" if Mufti had not left and otherwise "gone to IT" if that "wasn't an option".

Persaud's evidence in cross-examination on this question changed each time she was asked. She first said she would have stayed if Mufti had stayed, because her concerns of additional workload would not have arisen. When asked to confirm that she would have stayed if Mufti had stayed, she answered "absolutely", but then paused and added that she would have wanted a transfer to the "IT Group".

[19] I see no palpable and overriding error in the trial judge's evaluation of the evidence on this point nor in his conclusion that the workload issue had gone on long enough to establish that the appellant had condoned it.

C. Intentional Infliction of Mental Distress

[20] The trial judge summarized the law relating to this tort at paras. 138-39:

The required elements of the tort of intentional infliction of mental suffering are (i) the conduct was flagrant and outrageous; (ii) the conduct was calculated to cause harm; and (iii) the conduct resulted in a visible and provable illness or injury.

With respect to the second requirement that the conduct is calculated to cause harm, the defendant must intend to cause such harm, or, such harm must be known by the actor to be substantially certain to follow from his or her behaviour. As an intentional tort, this element cannot be satisfied on an objective standard of "reasonable foreseeability" or "recklessness". [Citations omitted.]

[21] After the appellant's departure, some software glitches appeared in the program for which she was primarily responsible. Her successor, Jey, led an investigation into the glitches. His report concluded the glitches were the product of sabotage. The report pointed the finger at either the appellant or Mufti. A copy of the report was delivered to the police but no charges were laid.

[22] The appellant says that Jey's report was incompetently done, since Jey was not an expert. She submits he had an interest in the outcome. She complains that she was not interviewed as part of the investigation. She asserts that it was not technically possible for her to have been the saboteur. She did not, however, tender an expert report to that effect.

[23] Following a lengthy recitation of the evidence, the trial judge concluded, at para. 204, that "there is no basis to find that Telus acted in 'bad faith' or in an 'unfair' manner, or engaged in any conduct that was 'flagrant and outrageous'." The investigation was prompted by a "serious breach of its IP Biller/Collector system causing a loss of significant revenue" (at para. 205) and further, the trial judge concluded that "Telus had a good faith basis to conclude that Persaud was the author of the sabotage" (at para. 207). He did not, however, make a finding that the appellant was in fact the saboteur, assuming there was one.

[24] At para. 208, the trial judge said, "I do not accept the plaintiff's submission that the Report can be said to be in bad faith or outrageous simply because Telus did not seek external consultants or did not contact Persaud before preparing the Report." Finally, he said that, "even if the conclusions in the report were wrong (an issue I do not decide), the conduct by Telus would be, at worst, an 'honest mistake'" (at para. 209). His review of the evidence substantiated his conclusion, expressed at para. 142, that "neither of the first two requirements to establish the tort of intentional infliction of mental suffering (i.e., flagrant or outrageous conduct or intention to cause harm) was established on the facts of this case."

[25] The appellant has not established that the trial judge made an error of law, or a palpable and overriding error in his evaluation of the facts.

D. Inducing Breach of Contract

[26] The trial judge set out the principles of law relating to this cause of action at paras. 212-14. Four elements must be established by the plaintiff:

1. The defendant had knowledge of the contract between the plaintiff and the third party;
2. The defendant's conduct was intended to cause the third party to breach the contract;
3. The defendant's conduct caused the third party to breach the contract; and
4. The plaintiff suffered damages as a result of the breach.

See Correia v. Canac Kitchens, 2008 ONCA 506, 91 O.R. (3d) 353, at para. 99; 1670002 Ontario Limited (Canadian Professional Recruiters) v. Redtree Contract Carriers Ltd., 2014 ONCA 501, 323 O.A.C. 128, at para. 14.

[27] In January and February 2005, an outfit called "TekSystems" had an opportunity to provide services to Telus in Edmonton. The proposal was that the appellant would do the work and provide her services through her consulting company, Natpak. The appellant was interviewed by telephone by Telus representatives from Edmonton. There was a subsequent exchange of material with TekSystems working towards a contract between TekSystems and Natpak. The appellant signed the agreement but there is no evidence that TekSystems did so. In mid-February, the appellant was advised by TekSystems that Telus had decided not to engage her services on the Edmonton project.

[28] The trial judge noted, at para. 237, that the appellant, who had the onus of proof, chose not to call a witness from TekSystems or Telus on this issue. He found, at para. 229, that "the evidence does not support" the appellant's assertion that there "was a valid and enforceable contract as signed terms were offered and accepted orally." He added, at para. 239: "Even if the first two elements of the tort of inducing breach of contract could be established (i.e. there was a contract between Natpak and TekSystems and Telus knew of it), the plaintiffs have not proven that Telus intended to cause the breach of the contract."

[29] The trial judge made no error of law in his specification of the legal test, nor did he make a palpable and overriding error in his assessment of the evidence.

E. Disposition

[30] The appeal is dismissed with costs payable by the appellant to the respondent in the amount of $15,000, inclusive of disbursements and taxes.

Released: June 9, 2017

"P. Lauwers J.A."

"I agree. John Laskin J.A."

"I agree. David Brown J.A."