Client Win: Ontario Exec Awarded Over $300K After Devastating Demotion

McFarlane v. King Ursa Inc.

Samfiru Tumarkin LLP secured more than $300,000 in damages for our client, Joanna McFarlane, in the case of McFarlane v. King Ursa Inc., a matter that was heard at the Ontario Superior Court of Justice (ONSC).

Senior Associates Mackenzie Irwin and Fiona Martyn successfully argued that McFarlane was constructively dismissed when she was asked to accept a demotion and pay cut after returning from maternity leave.

📺 WATCH: Everything You Need to Know About Constructive Dismissals

What You Need to Know

• After receiving a promotion in March 2021, McFarlane was promoted again in October 2021 to “Executive Vice-President, Media & Analytics” at King Ursa. The role came with a significant salary increase from $220,000 to $300,000, and a phantom share allocation of 5% (up from 2.5%).
• Prior to April 3, 2023, McFarlane went on maternity leave. During this time, King Ursa was grappling with financial challenges due to the COVID-19 pandemic and decided to defer her maternity leave twice.
• On April 3, 2023, McFarlane received a new employment agreement from King Ursa — demoting her to the position she held prior to October 2021 and reducing her compensation to $210,000.
• McFarlane rejected King Ursa’s offer and resigned.

Court’s Decision

The ONSC agreed with Samfiru Tumarkin LLP that King Ursa’s new offer breached the fundamental terms of McFarlane’s employment — amounting to a constructive dismissal.

Despite her relatively short tenure, Justice R. Lee Akazaki found that her executive status and inability to secure similar work entitled her to 12 months of severance pay.

In total, McFarlane was awarded $290,615.81, plus $40,000 in “moral damages.”

SEE ALSO
• How to Calculate Severance Pay
• Should I Negotiate My Own Severance Package in Ontario?
• Can I Get My Job Back if I’m Fired?
• Wrongful Dismissal in Ontario: Employee Guide

Key Takeaways

For Employees

• You don’t have to accept substantial changes to your job: Major modifications, such as a demotion or pay cut, are illegal in Ontario. If significant adjustments are made to the terms of your employment without your consent, don’t resign before contacting Samfiru Tumarkin LLP. We can confirm if you’ve been constructively dismissed and help you secure the compensation you’re owed — which can be significant, as McFarlane’s case shows.

For Employers

• Seek legal advice before making changes to a staffer’s job: Each employment matter is unique. A thorough review of the situation by our team will ensure laws aren’t being broken, the worker’s rights have been taken into account, and that your business is protected.

More Client Wins

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• 17 Month’s Severance for Wrongfully Dismissed Ontario Salesperson
• $157,000 for Ontario Youth Coordinator After Contract Cut Short
• 7-year Ontario Contractor Secures Substantial Severance Package
• Full Severance for Ontario Dental Receptionist Despite Termination Clause
• Office Admin Awarded Nearly $85K in Wrongful Dismissal Case
• Ontario Welder Sparks Justice After 36 Years of Service Snuffed Out

Workplace Issue? Contact Us

Since 2007, the experienced employment law team at Samfiru Tumarkin LLP has helped tens of thousands of non-unionized individuals resolve their workplace issues.

Whether you’re in Ontario, Alberta, or British Columbia, our lawyers can review your situation, enforce your rights, and ensure you receive the compensation you deserve.