Ineffective response to bullying amounts to constructive dismissal
Background
It is a fundamental implied term and condition of virtually all traditional employment relationships that the employer will maintain a workplace suitable for the performance of the employees’ duties. The employer is required to provide an environment that is safe and enables the employee to satisfactorily perform her duties. The failure to provide such an environment can amount to a constructive dismissal of an employee.
In Farber v. Royal Trust Co., [1997] 1 S.C.R. 846 at 864 the Supreme Court of Canada confirmed the principle of constructive dismissal as follows: “Where an employer unilaterally makes a fundamental or substantial change to an employee’s contract of employment – a change that violates the contract’s terms – the employer is committing a fundamental breach of the contract that results in its termination and entitles the employee to consider himself or herself constructively dismissed. The employee can then claim damages from the employer in lieu of reasonable notice.”
The case: Stamos v. Annuity Research & Marketing Service Ltd. (2002), 18 C.C.E.L. (3d) 117
The Ontario Superior Court’s decision in Stamos v. Annuity Research & Marketing Service Ltd. points out an interesting twist on the law of constructive dismissal. The decision makes it clear employers cannot sit idly by while one employee treats another inappropriately. An employer is responsible for ensuring working conditions are tolerable, even where it is not the actions of the employer that result in the intolerable situation. Workplace bullying is an issue that must be dealt with by employers if they wish to avoid liability.
Annuity administers life, dental and health benefit plans for third parties. Stamos began her employment with Annuity in February 1997 in the position of claims adjudicator. Despite her title Stamos was given considerable responsibility and a significant degree of independence. She quickly rose to the position of senior administrator/adjudicator. Stamos was a valued employee who enjoyed her work and voluntarily put in a great deal of overtime. Her efforts did not go unnoticed as the company’s owner, Mark Faiz, often praised her for her loyalty and hard work.
Everything changed for Stamos when Faiz’s uncle, Mustafa Hammami, was hired by Annuity to administer disability claims. He did not get along with anyone in the office and had a way of rubbing people the wrong way. He took criticism badly and never admitted his mistakes. He had difficulty dealing with women in the workplace, particularly if they were in positions of equivalent or higher authority. He made sexist and racist comments. Hammami’s conduct raised the level of stress in the workplace and created a tense atmosphere for Annuity’s six employees.
Hammami was particularly abrasive towards Stamos. During a meeting in which Faiz was present, Hammami accused her of sabotaging the computer system and undermining his authority. He hurled this accusation against her in an ‘uncontrollable’ manner, shouting and speaking over others. The accusation was unfounded.
Faiz did not support Stamos, he did nothing to control Hammami’s anger and he failed to censure his conduct. After the meeting, Faiz reassured Stamos there was nothing to the accusation. Faiz advised Stamos to avoid Hammami and to keep her office door closed and locked. Faiz gave her no clear assurance that further behaviour of this nature by Hammami would not be tolerated.
There were other incidents in which Hammami acted inappropriately towards Stamos. On one occasion he burst into her office where she had been sitting with her door closed and demanded to know what Stamos’ job was while pointing in her face and leaning over her. On other occasions he demanded answers to questions concerning her job, and asked if she felt demeaned as a woman when he asked her to do something.
Hammami was aggressive and threatening when he interacted with Stamos. She even called the police after a very unpleasant confrontation with him. When Stamos approached Faiz about Hammami’s outrageous conduct, Faiz continued to do nothing except to attempt to excuse his behaviour and tell her to stay away from him.
These incidents caused Stamos to feel worried and afraid of Hammami which, in turn, affected her job performance. She became ill, experienced breathing problems and suffered from anxiety. She slept poorly, felt listless and dreaded going to work.
By late March 2000, Stamos was at her wits-end. She tendered her resignation and agreed to stay on for a reasonable period of time to assist in training her replacement and to carry out certain projects. Stamos soon realized she could no longer face Hammami’s abusive and unpredictable behaviour. She quit two weeks later and then brought a lawsuit against Annuity for constructive dismissal.
Typically constructive dismissal cases arise where employers subject employees to treatment that renders competent performance of their work impossible or continued employment intolerable. In this case it was a fellow employee who subjected Stamos to this kind of treatment. At trial the judge drew no such distinction since Annuity consistently failed to fulfill its obligation to Stamos to ensure Hammami did not render competent performance of her work impossible or continued employment intolerable.
The judge held an employer has a duty to see the work atmosphere was conducive to the well being of its employees. An employer’s failure to prevent the harassment of an employee by a co-employee is a breach of this duty and can amount to constructive dismissal. The judge agreed Stamos did not get the kind of support she deserved from Faiz who responded to the conduct in an ineffective and insensitive manner.
Faiz permitted Stamos to become a virtual prisoner in her own office, living in fear of abusive behaviour and hostile language. She lost her stature and dignity in the office and was left physically, emotionally and mentally drained. The judge ruled Stamos had been constructively dismissed and was awarded six months pay in lieu of notice.
Be proactive in preventing bullying
The case demonstrates that employers have a responsibility to control the conduct of employees in the workplace and to respond effectively when such conduct adversely impacts on an employee’s ability to perform her work.
Employers must be proactive in ensuring the conditions of the workplace are not damaging to their employees.
When notified of problems, employers have a responsibility to deal with the problem in a fair, reasoned and effective manner. In dealing with abusive co-workers, employers should always document the misconduct in employment files and invoke progressive discipline, up to and including dismissal of the “bully” as appropriate.
Cases of note
In Lloyd v. Imperial Parking [1996] A.J. No. 1087, Lloyd was hired by the defendant employer as city manager of the employer’s operations in Calgary. Lloyd claimed that he was constructively dismissed due to intimidation and an oppressive atmosphere created by his immediate supervisor, Noiles.
Lloyd claimed Noiles was continually rude, abusive and vulgar towards him and he continually screamed at him and repeatedly threatened to terminate his employment. The court found Lloyd had been constructively dismissed. The interaction between Lloyd and Noiles went beyond a mere personality clash and was a deliberate pattern of behaviour on the part of the supervisor.
The court noted the continuous screaming and repeated threats of termination amounted to a fundamental breach by the employer of the implied term of the employment relationship — the employer would treat the employee with civility, decency, respect and dignity. In the absence of such treatment, and as a result of the bullying tactics of the supervisor, the employee was entitled to treat himself as constructively dismissed.
This in-depth look at bullying was provided by Mark Mason, an employment law lawyer and civil litigator with Goodman and Carr LLP in Toronto. He can be reached at (416) 595-2171 or [email protected].
It is a fundamental implied term and condition of virtually all traditional employment relationships that the employer will maintain a workplace suitable for the performance of the employees’ duties. The employer is required to provide an environment that is safe and enables the employee to satisfactorily perform her duties. The failure to provide such an environment can amount to a constructive dismissal of an employee.
In Farber v. Royal Trust Co., [1997] 1 S.C.R. 846 at 864 the Supreme Court of Canada confirmed the principle of constructive dismissal as follows: “Where an employer unilaterally makes a fundamental or substantial change to an employee’s contract of employment – a change that violates the contract’s terms – the employer is committing a fundamental breach of the contract that results in its termination and entitles the employee to consider himself or herself constructively dismissed. The employee can then claim damages from the employer in lieu of reasonable notice.”
The case: Stamos v. Annuity Research & Marketing Service Ltd. (2002), 18 C.C.E.L. (3d) 117
The Ontario Superior Court’s decision in Stamos v. Annuity Research & Marketing Service Ltd. points out an interesting twist on the law of constructive dismissal. The decision makes it clear employers cannot sit idly by while one employee treats another inappropriately. An employer is responsible for ensuring working conditions are tolerable, even where it is not the actions of the employer that result in the intolerable situation. Workplace bullying is an issue that must be dealt with by employers if they wish to avoid liability.
Annuity administers life, dental and health benefit plans for third parties. Stamos began her employment with Annuity in February 1997 in the position of claims adjudicator. Despite her title Stamos was given considerable responsibility and a significant degree of independence. She quickly rose to the position of senior administrator/adjudicator. Stamos was a valued employee who enjoyed her work and voluntarily put in a great deal of overtime. Her efforts did not go unnoticed as the company’s owner, Mark Faiz, often praised her for her loyalty and hard work.
Everything changed for Stamos when Faiz’s uncle, Mustafa Hammami, was hired by Annuity to administer disability claims. He did not get along with anyone in the office and had a way of rubbing people the wrong way. He took criticism badly and never admitted his mistakes. He had difficulty dealing with women in the workplace, particularly if they were in positions of equivalent or higher authority. He made sexist and racist comments. Hammami’s conduct raised the level of stress in the workplace and created a tense atmosphere for Annuity’s six employees.
Hammami was particularly abrasive towards Stamos. During a meeting in which Faiz was present, Hammami accused her of sabotaging the computer system and undermining his authority. He hurled this accusation against her in an ‘uncontrollable’ manner, shouting and speaking over others. The accusation was unfounded.
Faiz did not support Stamos, he did nothing to control Hammami’s anger and he failed to censure his conduct. After the meeting, Faiz reassured Stamos there was nothing to the accusation. Faiz advised Stamos to avoid Hammami and to keep her office door closed and locked. Faiz gave her no clear assurance that further behaviour of this nature by Hammami would not be tolerated.
There were other incidents in which Hammami acted inappropriately towards Stamos. On one occasion he burst into her office where she had been sitting with her door closed and demanded to know what Stamos’ job was while pointing in her face and leaning over her. On other occasions he demanded answers to questions concerning her job, and asked if she felt demeaned as a woman when he asked her to do something.
Hammami was aggressive and threatening when he interacted with Stamos. She even called the police after a very unpleasant confrontation with him. When Stamos approached Faiz about Hammami’s outrageous conduct, Faiz continued to do nothing except to attempt to excuse his behaviour and tell her to stay away from him.
These incidents caused Stamos to feel worried and afraid of Hammami which, in turn, affected her job performance. She became ill, experienced breathing problems and suffered from anxiety. She slept poorly, felt listless and dreaded going to work.
By late March 2000, Stamos was at her wits-end. She tendered her resignation and agreed to stay on for a reasonable period of time to assist in training her replacement and to carry out certain projects. Stamos soon realized she could no longer face Hammami’s abusive and unpredictable behaviour. She quit two weeks later and then brought a lawsuit against Annuity for constructive dismissal.
Typically constructive dismissal cases arise where employers subject employees to treatment that renders competent performance of their work impossible or continued employment intolerable. In this case it was a fellow employee who subjected Stamos to this kind of treatment. At trial the judge drew no such distinction since Annuity consistently failed to fulfill its obligation to Stamos to ensure Hammami did not render competent performance of her work impossible or continued employment intolerable.
The judge held an employer has a duty to see the work atmosphere was conducive to the well being of its employees. An employer’s failure to prevent the harassment of an employee by a co-employee is a breach of this duty and can amount to constructive dismissal. The judge agreed Stamos did not get the kind of support she deserved from Faiz who responded to the conduct in an ineffective and insensitive manner.
Faiz permitted Stamos to become a virtual prisoner in her own office, living in fear of abusive behaviour and hostile language. She lost her stature and dignity in the office and was left physically, emotionally and mentally drained. The judge ruled Stamos had been constructively dismissed and was awarded six months pay in lieu of notice.
Be proactive in preventing bullying
The case demonstrates that employers have a responsibility to control the conduct of employees in the workplace and to respond effectively when such conduct adversely impacts on an employee’s ability to perform her work.
Employers must be proactive in ensuring the conditions of the workplace are not damaging to their employees.
When notified of problems, employers have a responsibility to deal with the problem in a fair, reasoned and effective manner. In dealing with abusive co-workers, employers should always document the misconduct in employment files and invoke progressive discipline, up to and including dismissal of the “bully” as appropriate.
Cases of note
In Lloyd v. Imperial Parking [1996] A.J. No. 1087, Lloyd was hired by the defendant employer as city manager of the employer’s operations in Calgary. Lloyd claimed that he was constructively dismissed due to intimidation and an oppressive atmosphere created by his immediate supervisor, Noiles.
Lloyd claimed Noiles was continually rude, abusive and vulgar towards him and he continually screamed at him and repeatedly threatened to terminate his employment. The court found Lloyd had been constructively dismissed. The interaction between Lloyd and Noiles went beyond a mere personality clash and was a deliberate pattern of behaviour on the part of the supervisor.
The court noted the continuous screaming and repeated threats of termination amounted to a fundamental breach by the employer of the implied term of the employment relationship — the employer would treat the employee with civility, decency, respect and dignity. In the absence of such treatment, and as a result of the bullying tactics of the supervisor, the employee was entitled to treat himself as constructively dismissed.
This in-depth look at bullying was provided by Mark Mason, an employment law lawyer and civil litigator with Goodman and Carr LLP in Toronto. He can be reached at (416) 595-2171 or [email protected].
