Brake v. PJ-M2R Restaurant Inc.
2017 ONCA 402
Court of Appeal for Ontario, K.N. Feldman, Gillese and Pepall JJ.A.
May 23, 2017
Employment — Wrongful dismissal — Constructive dismissal —
Employer telling restaurant manager that she could accept demotion to
position as first assistant with meaningfully inferior benefits or be fired
— Employee constructively dismissed — Employee not obliged to accept
humiliating demotion in order to mitigate her damages.
Employment — Wrongful dismissal — Damages — Mitigation — Trial
judge awarding constructively dismissed employee damages based on
notice period of 20 years (inclusive of statutory entitlement to termination and severance pay) — Employment income earned by employee
during statutory entitlement period not subject to deduction from damages as mitigation income — Income which employee earned during
notice period from part-time job which she had held while working full-time for employer not deductible from damages as mitigation income.
Employment — Wrongful dismissal — Damages — Notice — Employer
signing letter when employee started work confirming that employee
was credited with seven years of service for her 13 years with franchise
in another location — Employee constructively dismissed after further
13 years’ employment — Trial judge not erring in finding that employee
had equivalent of 20 years’ service with employer and in awarding damages based on notice period of 20 months (inclusive of statutory entitlement to termination and severance pay).
The defendant operated a McDonald’s franchise. The plaintiff was employed by
the defendant for 13 years. Before that, she had worked for 13 years at McDonald’s restaurants in Newfoundland. When she started working for the defendant
in 1999, the defendant provided her with a credit letter which stated that she
was being credited with seven years of full-time service for her service in Newfoundland. Until 2010, the plaintiff received ratings of “excellent” or better in all
of her annual evaluations. In 2011, she received a negative performance review
and was transferred to a McDonald’s in a Wal-Mart, a location which was struggling. Despite her hard work there, she was placed in McDonald’s progressive
discipline program. At the end of the discipline period, the defendant informed
the plaintiff that she could either accept a demotion to the position of first assistant or be fired. Her salary would not be reduced, but her benefits would be
meaningfully inferior. She found the proposed demotion humiliating because she
would be reporting to people whom she had trained and supervised. She did not
accept the demotion. Instead, she brought an action for damages for wrongful
dismissal. The trial judge found that the plaintiff had been set up to fail from the
beginning of the progressive discipline program, that the program was arbitrary
and unfair, that the plaintiff had not been given a clear and responsible opportunity to correct the issues that the defendant had with her performance, and
that, taken at their highest and in aggregate, the complaints about her performance did not amount to cause for dismissal. He found that the plaintiff was
constructively dismissed when she was given the choice between accepting the
demotion and being fired. He awarded her damages based on a notice period of
20 years, inclusive of her statutory entitlement to termination and severance pay.
The defendant appealed.