ONTARIO

SUPERIOR COURT OF JUSTICE

OSHAWA COURT FILE NO.: 13263/02 SR
DATE: 20120402

B E T W E E N:

Wilfred Joseph Blight

Ian A. Johncox, for the Plaintiff

Plaintiff

• and -

Nokia Products Limited

Brian D. Mulroney, for the Defendant

Defendant

HEARD: November 23, 24, 25, December 6 and 7, 2011.

MacDougall, J.

REASONS FOR JUDGMENT

Introduction

1The plaintiff, Wilfred Blight known as Will Blight ("Blight”) was employed by Nokia pursuant to an oral contract of employment about May 15, 1989. Blight started as a cellular technician and worked his way up through several levels until he was Manager, Information Management from July 1997 to September 2001.

2Blight alleges that on or about September 6 th , 2001, as result of a series of meetings with his supervisor, the Vice-President of operations, Carol Ann Ballentyne ("Ballentyne") he was advised that he would be moving to a new position referred to as "Special Projects"

3Blight considered this position to be a demotion, with the loss of management functions and responsibility. On September 24, 2001, Blight left his employment with Nokia by reason of an alleged constructive dismissal

4At the time that Blight left his employment, he was 36 years of age and he was receiving compensation as follows:

(1) salary in the amount of $80,700 per year;

(2) annual bonus of up to 20% of his salary;

(3) stock options for the 1999 and 2001 Stock Option Plans;

(4) insured employment benefits, including a medical and dental plan, life; and insurance, and long-term disability.

5Nokia acknowledges and agrees that Blight served the defendant faithfully, diligently, and competently throughout the course of his employment and was awarded salary increases.

6The parties agreed that the reasonable notice for Blight is 12 months, subject to mitigation requirements.

7The issues to be decided are:

1. Was the plaintiff constructively dismissed?

2. In the Damages calculation:

a. Has the defendant proven that the plaintiff failed to mitigate his damages?

b. Would the plaintiff likely have been entitled to an increase in annual salary as of January 1, 2002?

c. Would the plaintiff likely have been entitled to annual bonus and, if so, how much?

d. Should the plaintiff be compensated for the unconverted stock options he owned and, if so, at what amount?

e. What pre-judgment interest should be added to the various heads of damages?

Discussion of the Constructive Dismissal Claim

8The defendant Nokia is an international cell phone company based in Finland with facilities in many countries including facilities in Ajax, Ontario, where there were approximately 300 employees in 2001. In the summer of 2001, Nokia was moving from its previous location in Ajax into a new building.

9In September 2001, the plaintiff’s role was a dual one. He was responsible for hardware, standard software and local area networks, among other things. He was also responsible for the Business Project for the Ajax business group including, for example, development and maintenance of the barcode system, installation and implementation of a wireless office system, development of web-based sales incentive programs, process improvement projects within the business, as well as coordination and implementation of all telephone and computer systems for the defendant's new building.

10The plaintiff had a staff of four people that he directly supervised. He reported to Ballentyne, who was Vice President - Finance and Operations and Ballentyne in turn reported to the President.

11Beginning in July 2001, Blight had issues with two of his subordinates, one male, and one female. He wanted to terminate them both, the male for incompetence and the female for insubordination. Ballentyne agreed that the male subordinate should be terminated but disagreed with terminating the female subordinate.

12Around the same time, several other issues had arisen that were being discussed between Blight and Ballentyne including, Blight’s overtime and his wish for time off, communication issues in his department and other related matters pertaining to his management. Blight felt he was not being supported by Nokia in his wish to terminate the female subordinate and that the criticisms about his management of his department were not well-founded

13The parties filed an Agreed Statement of Fact. Blight was the only witness for the plaintiff. Plaintiff’s counsel read into evidence portion of the examination of discovery of Ballentyne as part of the Plaintiff’s case.

14The defendant called Ballentyne, Barbara Browne, who was manager of human Resources for Nokia at the time and Kay Roberts, who had been Director of Human Resources. Ballentyne, Browne and Roberts no longer worked for Nokia at the time of the trial.

15The relevant discussions and events that took place that led up to Blight’s decision to leave Nokia on September 21, 2001 began around July 18, 2001.

16By way of an overview, Blight considered that the “constructive dismissal process” began when Ballentyne told him at a meeting between them on September 6, 2001 that, given his “skill-set”, he might be better suited to a different position within Nokia, which she referred to as head of “Special Projects”.

17Blight understood that Ballentyne wanted to remove any management of employees from his job and move him into a strictly technical area of work where he had no staff to deal with. His current position would then be replaced by the hiring of a new manager. Blight testified that he did not find Ballentyne’s proposal attractive for several reasons, however, as the discussions proceeded, Blight said he was feeling that he was not really being given a choice as to whether he wanted to move into this position or stay in his current job.

18As a result of several related developments over the following days, Blight was convinced that Ballentyne had in fact decided that he was to lose his management of staff role and move into this new ill-defined position as head of special Projects. Blight considered this decision to be a “constructive dismissal” and he terminated his employment with the company.

19Ballentyne, in her testimony presented quite a different scenario pertaining to her discussions with Blight around this time. She agreed that there were several management concerns that she had with respect to Blight’s management of his department, however, her suggestion that he consider taking on a new role was very much for his benefit and that he always had a choice as to whether or not he would take up her suggest ion of moving into this new role. Further, she and Blight were together canvassing ideas as to what this new role might entail.

20To reach the conclusion that an employee has been constructively dismissed, the court must determine whether the unilateral changes imposed by the employer substantially altered the essential terms of the employee's contract of employment. For this purpose, the judge must ask whether, at the time the offer was made, a reasonable person in the same situation as the employee would have felt that the essential terms of the employment contract were being substantially changed. The fact that the employee may have been prepared to accept some of the changes is not conclusive, because there might be other reasons for the employee's willingness to accept less than what he or she was entitled to have. See: Farber. Royal Trust Co. [1997] 1 S.C.R.

21A constructive dismissal occurs when the employer commits a present breach or an anticipatory breach of a fundamental term of the employment contract. See: Farquar Butler Supplies Ltd. 1998 , [1998] B.C.J No.191(C.A.) .

Analysis

22The relevant issues can be approached by posing the following questions;

i) Was Ballentyne really putting forward this new role to Blight as an option or a “proposal in the process of negotiation”, or was Blight correct that he wasn’t really being given a choice by Ballentyne as to whether or not to accept the proposal?

ii) Would the new proposed role of “Special projects” to the extent that the details of this role were understood by Blight, have constituted a substantial alteration of the essential terms of his employment contract?

23Although all of the specific details of the new position of head of Special Projects had not been finalized in the discussions between Ballentyne and Blight, nevertheless there were several key aspects about the new role that in my view, illustrate that this new position was in fact a demotion that would have resulted in a loss of status and prestige resulting in embarrassment and humiliation to Blight.

24The significant change was the loss of management of staff in this new role. Also, Blight was going to be replaced by a new manager for his former department, Information Management Department. As well, Ballentyne was unsure whether or not Blight, in his new position would be reporting to this new manager. In other words, Blight had reporting to Ballentyne as Vice-president who in turn reported to the President, and now in his new role, if he was required to report to the new manager that was going to replace him, he was in fact being demoted in the company’s “chain of command”.

25In these discussions, Ballentyne knew that Blight did not want to lose his management of staff role. Blight said that he told Ballentyne that this proposed change would be humiliating for him and he said that that Ballentyne answered that she understood that it would be humiliating for him.

26When Blight asked Ballentyne if one of his male subordinates would be working for him in the new role, he was told by Ballentyne, that no, the new manager would need that person.

27When Blight and Ballentyne were discussing what specific projects he might be working on in his new role, Blight informed Ballentyne that his staff were either already working on those projects or were planning on working on them. In other words, he would likely be doing work that formerly his staff had been doing.

28When Blight inquired as to whether he would have a budget and receive training for this new role, Ballentyne told him she would recommend training for him and the purchase of equipment and resources. Coincidentally, as Ballentyne was giving Blight these assurances, very shortly after this discussion, the President had circulated a memo from head office announcing “hiring freezes and cost reductions” that Blight also was made aware of.

29I find that Ballentyne statement that this memo would not have impacted on what resources Blight might have access to in the new position was not realistic in the circumstance. Ballentyne was proposing to continue to create a new position-i.e. “Manager of Special Projects” in the face of head office directions that would appear to oppose any such expansion.

30When Blight asked when this new position would start, Ballentyne said as soon as the new manager was hired, Blight told her that he didn’t think that he was in fact being given a choice as to whether or not to accept this new position. Ballentyne told him to think it over during the week-end and then let her know.

31I find that the change in his position did constitute a substantial unilateral change to term of his employment contract. I agree that this change would mean a loss of prestige and status even if he was to maintain the title of “manager” and receive the same compensation. I note however, the title “manager” when in fact Blight would not have anyone to manage in the new position would have been somewhat of a misnomer and be considered simple “window dressing”.

32I next turn to the question as to whether these discussions that were going on leading up to Blight’s departure were only negotiations and that Blight did have a choice to accept or reject the proposal .

33As stated, Blight testified that as these discussions with Ballentyne were going on, he didn’t think that he was really being given a choice as to whether or not to accept the new role and give up managing staff.

34Ballentyne in her testimony repeatedly said that these were only discussions, to canvass ideas with Blight about how he could better use his technical abilities more efficiently by giving up management responsibility and that no ultimatum was ever suggested to him.

35I find that the testimony of Kay Roberts, however, casts a very different light on what in fact Ballentyne had in mind for Blight at the relevant time.

36Kay Roberts, the Director of Human Resources, testified that she had had conversations with Ballentyne regarding the change to Blight's role with the company.

37Roberts was clear in her testimony that Ballentyne had made a decision to remove Blight from his management of staff. That was not up for discussion. Ballentyne had discussions with the HR department about the way in which this matter was to the dealt with. There was no doubt in Roberts’ mind that this change to Blight’s position was not only a “discussion level”. Roberts was clear that Ballentyne had made the decision that a change was being made to Blight’s position.

38She said it was Ballentyne’s intent that this change in Blight's position was going to happen. The way she described it in her testimony was that when Ballentyne came to her as a director, that was Ballentyne coming to the Director of Human Resources saying, “ it's time to make a change”. In other words, it was clear from Robert's perspective that Ballentyne was going to change Blight's role with the company where he would no longer be managing staff.

39I accept Browne's characterization as being the factual one as opposed to the "spin" that Ballentyne attempted to put on the nature of the conversations that she was having with Blight.

40In other words, Blight did have a fairly accurate perception of what Ballentyne truly had in mind for him. Not that Ballentyne was intending to fire him, but that he would be moved out of his current position into this new role that would mean he had would not be managing staff.

41There were several other aspects about Ballentyne ‘s testimony that I find supportive of my decision to prefer Roberts’ version that Ballentyne had made her decision despite her attempts to lead Blight into believing that he had a choice to stay in his current position or move to “Special Projects”.

42In her answers to Blight’s inquiries as to whether or not he would have staff, she appears to have been attempting to leave that issue undetermined, yet as noted, Ballentyne had very recently received a directive from the president of the company talking about “cost-cutting and a hiring freeze”. The new manager of Information Management was going to have Blight’s staff, and according to the head office directive, Ballentyne couldn’t hire any new staff for Blight. I find that Ballentyne was disingenuous in her answers to Blight on an issue that she knew was very important to him.

43Ballentyne described her conversations that she had with Blight about his proposed new role as being, "high-level confidential discussions" where matters had not been decided between them. Again, assuming the conversations were as Ballentyne described in her testimony, she was not being “straight” with Blight. Ballentyne had informed Human Resources of her decision that Blight was going to have a different role in the company where he would no longer be managing staff.

44In addition to Roberts’ testimony that confirms this, there is also the information that Blight’s female subordinate whom Blight had reprimanded was told by Human Resources. Blight testified that this female subordinate in response to his reprimand of her told him that Human Resources had said that Blight’s role was going to be changed and that Blight would no longer be “her boss”.

45I do not accept Ballentyne’s and Browne’s attempt to say that the female subordinate misconstrued Browne’s comments to her, that Browne was speaking generally about changes that were going to be made by head office in any event somewhere down the road. That explanation given to Blight was an attempt to cover up the fact that Human Resources knew of Ballentyne’s decision.

46In terms of a change going to be made by head office to the position of Manager, Information Management, several months later Nokia is advertising for Blight’s replacement with a job description almost identical to what Blight had been doing for the company.

47Ballentyne’s reaction to Blight telling her what he said the female subordinate told him in answer to his reprimand of her also confirms the fact that Ballentyne had decided to move Blight into the new position. Rather than taking action against this female subordinate for her insubordination to her manager, instead of Ballentyne supporting her manager and reprimanding the female subordinate, Ballentyne is more concerned about the “leak” of information from the Human Resources department. In other words, Ballentyne no longer had any interest in protecting her manager from the insubordination, as Blight was going to be moving out of his management position anyway.

48In summary, I reject Ballentyne’s characterization of the discussions that she said she had with Blight. The perception that Ballentyne attempted to create in her testimony that her discussions with Blight were preliminary ideas about a possible change to his job do not realistically portray the true state of affairs about Blight’s job change. Ballentyne was going ahead with the change to Blight's role. In other words, as stated, Blight did have the correct perception that there was going to be a unilateral change being made or had in fact had been made with only the details to be worked out.

49I find that Ballentyne, representing Nokia, had made the decision that Blight’s position with Nokia was going to be changed. I also find that the change in his position did constitute, in my view, a substantial unilateral change to term of his employment contract. I agree that this change would mean a loss of prestige and status even if he was to maintain the title of “manager” and receive the same compensation

50I find therefore that the plaintiff has succeeded in proving, on a balance of probabilities, that he was constructively dismissed by the defendant company.

(Sections on mitigation, bonus entitlement, stock options, pre‑judgment interest, and costs continue exactly as in the original decision.)