Court of Appeal Win: Employee Demoted After Disability Was Constructively Dismissed

Samfiru Tumarkin LLP has secured an important Ontario Court of Appeal victory for a long-service employee who was demoted after returning from disability leave, resulting in more than $180,000 in damages and court-awarded costs.

In Hill v. 1359768 Ontario Inc. (B&B Towing), the Court of Appeal upheld the key findings in favour of our client, including that his employment contract was not frustrated by his medical condition and that his demotion amounted to a constructive dismissal.

The decision confirms an important protection for employees: being away from work because of an illness or disability does not automatically give your employer the right to end your employment or avoid its duty to accommodate you.

The case was handled by Stan Fainzilberg and Teilen Celentano of Samfiru Tumarkin LLP.

The Employer Claimed Frustration Of Contract

The employer argued that Hill’s employment contract had been frustrated because his injuries prevented him from performing the road boss job.

Frustration can occur when an illness or disability is so serious and long-lasting that there is no reasonable likelihood the employee will be able to return to the essential duties of their job within a reasonable period of time.

But a lengthy medical leave on its own is not enough. An employer must also consider its duty to accommodate up to the point of undue hardship.

The Court Of Appeal Rejected The Frustration Argument

The Ontario Court of Appeal agreed that B&B Towing had not proven Hill’s employment contract was frustrated.

Much of Hill’s road boss position involved management, administrative and supervisory work. The evidence supported the conclusion that he could have continued in that role if it remained available and his restrictions were accommodated.

His doctors had also supported a trial return to work. The medical evidence did not establish that Hill would never be able to return to his essential road boss duties.

The Court of Appeal therefore upheld the finding that his employment contract was not frustrated.

The Constructive Dismissal Finding Stood

The employer did not challenge the finding that, if Hill’s contract was not frustrated, moving him from road boss to tow truck driver amounted to constructive dismissal.

This is important for employees who return from a medical or disability leave and find that their employer has:

• Eliminated their previous position
• Demoted them to a lower-level job
• Reduced their salary
• Refused to properly consider their medical restrictions

A significant demotion in Ontario can amount to constructive dismissal and potentially entitle an employee to a full Ontario severance package.

What Was The Financial Result?

Hill’s successful constructive dismissal claim resulted in 22 months of severance pay and, following the Court of Appeal decision, more than $180,000 in damages and court-awarded costs.

Why This Decision Matters For Employees

• A long medical leave does not automatically end your employment. Your employer can’t simply decide your contract has been frustrated because you have been away from work for an extended period.
• Your employer must consider accommodation. Modified duties, reduced hours or other reasonable changes can allow you to return to work.
• You do not have to automatically accept a major demotion. A substantial reduction in position, responsibilities or compensation can trigger a constructive dismissal.

When Should You Contact An Employment Lawyer?

Speak with an employment lawyer in Ontario before making a decision if you return from a disability or medical leave and your employer tells you that your old job is gone, you must accept a lower position, or your employment has been “frustrated.”

Do not resign or accept a major change to your employment before understanding your rights. How you respond can affect your ability to claim constructive dismissal and receive the compensation you are owed.

For most employees, getting proper severance does not require a lengthy court case. In nearly all matters, our employment lawyers can pursue the compensation a client is owed quickly and with minimal pressure, without going to court.

But when an employer refuses to do what is right and court becomes necessary, results like Hill v. B&B Towing demonstrate the experience our lawyers bring to litigation.

If your job has changed after a medical leave, your employer is refusing to accommodate you, or you’ve been told that your employment has been frustrated, contact Stan Fainzilberg, Teilen Celentano or another member of the employment law team at Samfiru Tumarkin LLP.