Ontario Court of Appeal Clarifies When Workplace Harassment Constitutes Constructive Dismissal

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The Court of Appeal’s decision in General Motors of Canada Limited v Johnson does not break any new ground in the law of constructive dismissal. But against the backdrop of Bill 168 (the Violence and Harassment in the Workplace Act) and recent developments in workplace safety and human rights law, it clarifies when workplace harassment will constitute a constructive dismissal.

The plaintiff Yohann Johnson alleged that another employee, Alex Markov, refused to attend a training session led by Johnson because Johnson is black. GM investigated Johnson’s complaint three times. Johnson was ultimately unsatisfied by GM’s investigations and findings. He took an approved medical leave, citing disability arising from discriminatory treatment due to racism in the workplace. After two years, Johnson was cleared to return to work, but refused to do so in the same workplace as Markov and another employee. GM treated Johnson’s refusal to return to work as resignation of his employment. Johnson responded by suing for constructive dismissal.

The trial judge ruled that GM was liable to Johnson for constructive dismissal and awarded him $160,000 in wrongful dismissal, special and bad faith termination damages. In reaching this conclusion, the trial judge found that Markov’s refusal to attend the training session was racially-based and this incident, subsequent incidents and GM’s failed investigation created a poisoned workplace.

The Court of Appeal overturned the decision. It found that the trial judge erred in finding that Markov’s refusal to attend the training session was motivated by racism. More importantly, the Court of Appeal highlighted the following legal tests:

  • The plaintiff bears the onus of establishing a claim of poisoned workplace. There must be evidence that, to the objective reasonable bystander, would support the conclusion that a poisoned workplace environment had been created.
  • A poisoned workplace is not created, as a matter of law, unless serious wrongful behaviour sufficient to create a hostile or intolerable work environment is persistent or repeated.
  • The test for establishing constructive dismissal is whether 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.

Applying this framework, the Court of Appeal held that even if Markov’s absence was racially-motivated, that conduct alone does not support a finding that the entire workplace was poisoned. The offending conduct must be persistent and repeated unless the incident in question is sufficient, standing alone, to taint the entire workplace. The court held, further, that in this case, there was no evidence that GM intended to repudiate Johnson’s employment agreement—it was entitled to rely on the medical evidence that Johnson was fit to return to his pre-disability job without accommodation and there is no obligation on GM to immunize Johnson from contact with Markov or other employees.

For employers, this decision is a good reminder that employers must treat workplace harassment allegations seriously, including conducting an investigation into the allegations. At the same time, employers can draw a line where they find that the allegations are meritless or the employee’s demands for accommodation in the circumstances are unreasonable.