Employer breached the employment contract

Constructive dismissal found as a result of a series of cumulative factors not actionable on their own
|Canadian Employment Law Today

AT&T Capital Canada, Inc., a subsidiary of the American corporation AT&T Capital Corp., is active in the lease financing business. Prior to 1995 it was primarily involved in the “small-market” business which involves financing the leasing of assets with an average worth of about $12,000. In 1995 AT&T decided to enter the “mid-market” business which involves revenue-producing assets worth $100,000 and upward such as construction and manufacturing equipment.

In 1996 AT&T entered into discussions with Tino Kussman about developing this mid-market business. At that time Mr. Kussman was the regional manager for Western Canada for Newcourt Credit Group where he had responsibility for the company’s mid-market business. Their idea was to develop a vendor program whereby equipment manufacturers were encouraged to refer all their lease financing to AT&T for its contemplated mid-market division.

Mr. Kussman agreed to leave Newcourt Credit to work for AT&T. He was given two options for salary: he could receive a base salary of $93,000 with bonuses calculated at 10 per cent of gross profit in excess of $480,000 annually; or he could receive a base salary of $105,000 with bonuses calculated at 10 per cent of gross profit in excess of $600,000 annually. Mr. Kussman opted for the latter arrangement as he felt he could meet the higher sales or profit targets. He commenced his employment at the end of March 1996.