Shifting of duties and decreased involvement was constructive dismissal, court rules
An Ontario car dealership constructively dismissed a general manager when it moved his office and gradually changed his responsibilities while it was cutting costs, the Ontario Superior Court of Justice has ruled.
Frank Power was a general manager for Unique Chrysler Plymouth Ltd., a car dealership in Burlington, Ont. He was responsible for running the entire business and was very involved in sales, service and finance at the dealership.
In late 2003, Unique was going through financial difficulties. The dealership’s owner, Sandy Calder, became more involved in the business and in April 2004, he told Power he would be moving into his office. He asked Power to move to an office in a different area from the showroom. Calder also told the sales managers to stop reporting to Power and report directly to him instead.
In October 2004, Calder asked Power to move again, to an office in the service and parts area, where he should focus on that aspect of the business rather than sales. However, there was no private office there, just an area where employees and customers would pass through and a space used for storage. At this point, Power said his involvement with sales was “non-existent.”
Power said after December 2004 he was no longer included on e-mails or in meetings and he no longer approved financial outlays or signed cheques.
On Nov. 22, 2004, Calder told Power that due to Unique’s financial struggles, his position would be terminated as of June 1, 2005. Power asked about his severance and was told he had enough notice so severance wasn’t necessary. On Jan. 26, 2005, Power resigned and sued for constructive dismissal.
The court found there hadn’t been any problems with Power’s performance before he was moved to the parts and service section and the office moves and change in reporting structure were tantamount to a demotion and a substantial change to his job duties.
“The only thing accomplished by that move was negative,” the court said. “It diminished (Power’s) status as the general manager in the eyes of the employees who reported to him.”
The court also found when Calder asked sales managers to report directly to him, Power was effectively left out of the loop. Being left out of the decision-making and reporting process constituted fundamental changes to his job, the court said, which met the test for constructive dismissal.
Because of his more than seven years of service and senior position with Unique, the court awarded Power 10 months’ salary, minus what he was paid from his notice of termination until his resignation, for a total of $61,617. See Power v. Unique Chrysler Plymouth Ltd., 2007 CarswellOnt 8015 (Ont. S.C.J.).
Frank Power was a general manager for Unique Chrysler Plymouth Ltd., a car dealership in Burlington, Ont. He was responsible for running the entire business and was very involved in sales, service and finance at the dealership.
In late 2003, Unique was going through financial difficulties. The dealership’s owner, Sandy Calder, became more involved in the business and in April 2004, he told Power he would be moving into his office. He asked Power to move to an office in a different area from the showroom. Calder also told the sales managers to stop reporting to Power and report directly to him instead.
In October 2004, Calder asked Power to move again, to an office in the service and parts area, where he should focus on that aspect of the business rather than sales. However, there was no private office there, just an area where employees and customers would pass through and a space used for storage. At this point, Power said his involvement with sales was “non-existent.”
Power said after December 2004 he was no longer included on e-mails or in meetings and he no longer approved financial outlays or signed cheques.
On Nov. 22, 2004, Calder told Power that due to Unique’s financial struggles, his position would be terminated as of June 1, 2005. Power asked about his severance and was told he had enough notice so severance wasn’t necessary. On Jan. 26, 2005, Power resigned and sued for constructive dismissal.
The court found there hadn’t been any problems with Power’s performance before he was moved to the parts and service section and the office moves and change in reporting structure were tantamount to a demotion and a substantial change to his job duties.
“The only thing accomplished by that move was negative,” the court said. “It diminished (Power’s) status as the general manager in the eyes of the employees who reported to him.”
The court also found when Calder asked sales managers to report directly to him, Power was effectively left out of the loop. Being left out of the decision-making and reporting process constituted fundamental changes to his job, the court said, which met the test for constructive dismissal.
Because of his more than seven years of service and senior position with Unique, the court awarded Power 10 months’ salary, minus what he was paid from his notice of termination until his resignation, for a total of $61,617. See Power v. Unique Chrysler Plymouth Ltd., 2007 CarswellOnt 8015 (Ont. S.C.J.).
