



COURT OF APPEAL FOR ONTARIO

CITATION: Morgan v.
    Vitran Express Canada Inc., 2015 ONCA 293

DATE: 20150430

DOCKET: C58007

Hoy A.C.J.O., Watt and Brown JJ.A.

BETWEEN

Dunstan Morgan

Plaintiff
(Respondent)

and

Vitran Express Canada Inc.

Defendant
(Appellant)

Thomas A. Stefanik, for the appellant

Christine Davies, for the respondent

Heard: April 13, 2015

On appeal from the judgment of Justice Darla A. Wilson of
    the Superior Court of Justice, dated November 5, 2013, with reasons reported at
    2013 ONSC 6835.

By the Court:

Overview

[1]

The appellant, Vitran Express Canada Inc., employed the respondent,
    Dunstan Morgan, as a dock supervisor for almost 25 years. In September, 2010,
    Vitran changed Morgans job from dock supervisor to freight analyst, a
    position created specifically for Morgan who took the position that Vitrans
    action constituted constructive dismissal, and he commenced this action. By
    Judgment dated November 5, 2013, the trial judge ordered Vitran to pay Morgan
    damages in the amount of $80,911.88. The trial judge concluded that Morgan had
    been constructively dismissed from his position as dock supervisor at Vitran,
    and she held that Morgan was not obliged to continue working for Vitran in
    order to mitigate his damages. Vitran appeals, submitting that the trial judge
    erred in reaching both conclusions.

Constructive dismissal

[2]

On the issue of constructive dismissal, the trial judge applied what was
    then the leading case on the issue,
Farber v. Royal Trust Co.
, [1997]
    1 S.C.R. 846. After the trial judge granted judgment, the Supreme Court of
    Canada re-visited the law of constructive dismissal in
Potter v. New
    Brunswick Legal Aid Services Commission
, 2015 SCC 10, and identified a two-branch
    test for constructive dismissal. Under the first branch, the court must
    identify an express or implied contract term that has been breached and then
    determine whether that breach substantially altered an essential term of the
    contract. Under the second branch, the court must consider whether the conduct
    of the employer, when viewed in the light of all the circumstances, would lead
    a reasonable person to conclude that the employer no longer intended to be
    bound by the terms of the contract. In
Potter
the Supreme Court of
    Canada stated, at paras. 36 and 42, that these two tests for constructive
    dismissal were not a departure from the approach adopted in
Farber
,
    which the trial judge applied. Accordingly, the trial judge applied the correct
    legal principles.

[3]

In support of its position that the trial judge erred in finding that
    Vitran had constructively dismissed Morgan, the appellant advances two main
    arguments.

[4]

First, Vitran submits that the evidence does not support the trial
    judges finding that the terms of Morgans employment had been altered in a
    substantial way. We see no merit in this submission.

[5]

The evidence supported the trial judges finding that by requiring
    Morgan to work as a freight analyst, Vitran had unilaterally altered the
    essential terms his employment contract in a substantial way. Although in para.
    81 of her reasons the trial judge incorrectly stated that as dock supervisor
    Morgan had supervised 22 men on the dock, at para. 5 she correctly noted that
    Morgan had shared that responsibility with other dock supervisors. At para. 84
    of her reasons, the trial judge found that the new position of freight analyst
    was a job that had been created checking on 2 part-time workers, a position of
    less importance and prestige with very little supervisory function and little
    opportunity to make decisions and exercise discretion. That finding was
    supported by the evidence, and it alone justified the trial judges conclusion
    that Vitran had altered the essential terms of Morgans employment in a substantial
    way.

[6]

Second, Vitran submits that the trial judge erred in her analysis of the
    constructive dismissal issue by taking into account evidence about its
    treatment of Morgan in the period prior to his September, 2010 transfer to the
    position of freight analyst.  To the extent that the trial judge did so, she did
    not err. She was entitled to consider whether Vitrans conduct, in light of the
    circumstances and viewed objectively, would lead a reasonable person to
    conclude that the employer no longer intended to be bound by the terms of the
    contract. See,
Potter
, at paras. 42 and 164.

[7]

Further, Vitran submits that the trial judge failed to follow the
    decision of this court in
Mifsud v. MacMillan Bathurst Inc.
(1989), 70
    O.R. (2d) 701 (C.A.). Specifically, Vitran argues that in
Mifsud
this
    court observed that a finding of demotion was itself not determinative of the
    issue of constructive dismissal, but the court would have to ascertain whether
    the employment contract contained an implied term that, if the employer validly
    considered the employees performance to be unsatisfactory, it could demote him
    to a position of lesser responsibility without his consent.

[8]

It must be recalled that
Mifsud
was decided over 25 years ago. Since
    then the Supreme Court of Canada has addressed the issue of constructive
    dismissal in its decisions in
Farber
and
Potter
. In both
    decisions, the Supreme Court of Canada stated that a demotion is a substantial
    change to the essential terms of an employment contract which could warrant a
    finding of constructive dismissal: see,
Farber
, at paras. 36 and 46;
Potter
,
    at paras. 37 and 38. In any event, the trial judges finding that Vitran had
    not demonstrated that Morgan was incapable of performing his job as dock
    supervisor directly addressed whether Vitran could rely on any such implied
    term of its employment contract with Morgan to demote him.

[9]

In sum, we see no error in the trial judges conclusion that Vitran had
    constructively dismissed Morgan.

Mitigation

[10]

Vitran
    submits that it had established at trial that a reasonable person in Morgans
    situation would have accepted the chance to continue working at the company as
    a freight analyst, with the result that the trial judge had erred in concluding
    that Morgan was not obliged to take up the freight analyst position to mitigate
    his damages from the constructive dismissal. Vitran argues that the trial judge
    erred in finding that Morgan was subject to an unfriendly work environment,
    reached her conclusion in the absence of evidence from other Vitran employees
    about how they would view Morgans new position as a freight analyst, and erred
    in finding that Morgans personal relationships with several of his superiors,
    Messrs. Graham, Ferguson and Kahn, were acrimonious.

[11]

In
    her reasons, the trial judge referred to the governing legal authorities,
    including
Evans v. Teamsters Local Union No. 31
, 2008 SCC 20, [2008] 1
    S.C.R. 661, and to the principles enunciated in those cases regarding the
    circumstances in which a dismissed employees obligation to mitigate damages
    must be met by returning to work for the same employer. See, in particular,
Evans,
at para. 30.

[12]

The
    trial judge considered and applied those principles to the facts before her.
    She reviewed the pertinent evidence, the positions of the parties and the
    factors weighing in favour of and against the conclusion that Morgans decision
    not to return to work was reasonable. The trial judge made the following
    critical findings of fact:


(i)

The work environment at Vitran was unfriendly;


(ii)

The work Morgan was offered as a freight analyst was of lesser
    importance than his job as a dock supervisor;


(iii)

By accepting the freight analyst position, Morgan would have suffered a
    loss of dignity in the eyes of the dock workers he used to supervise. The
    freight analyst position had not been posted, so other employees would have
    known it was a position created specifically for Morgan because of his
    perceived ineptitude and would have been viewed as a demotion by other
    employees;


(iv)

Morgan had been treated in an unacceptable manner by his employer in the
    period leading up to his constructive dismissal; and,


(v)

Morgans personal relationships with his supervisors were acrimonious in
    the sense that no matter what Morgan did, they continued to criticize him.

[13]

These
    factual findings, some of which were credibility-based, were open to the trial
    judge to make on the record before her and they attract deference from this
    court. The trial judge heard from two Vitran witnesses: Robert Graham and Heidi
    Saccucci. She did not find Graham to be an impressive witness, and she attached
    little weight to Saccuccis evidence. The trial judge gave cogent reasons for
    reaching those conclusions. Her reasons demonstrate that she considered the
    factors relevant to the assessment of the reasonableness of Morgans decision
    not to continue with Vitran as a freight analyst, and it was for the trial
    judge to determine the weight to be assigned to those factors.

[14]

Finally,
    Vitran submits that it was not open to the trial judge to conclude that a
    reasonable person in Morgans position would not have accepted the employers
    offer of the freight analyst position in the absence of hearing evidence from
    other Vitran employees about how they would have viewed Morgans transfer from
    dock supervisor to freight analyst. We see no merit in this submission. Having
    considered the evidence of the nature and conditions of Morgans employment,
    the work atmosphere, his treatment over the years by his supervisors, and the
    nature of the newly-created position of freight analyst, it was open to the
    trial judge to conclude, in all the circumstances, that Vitran had not met the
    objective test of demonstrating that a reasonable person in Morgans position
    would have accepted its offer.

[15]

Accordingly,
    we see no basis for appellate interference with the trial judges ruling that
    in the circumstances, and viewed objectively, it was reasonable for Morgan to
    reject Vitrans offer of the new position of freight analyst in mitigation of
    his damages.

Disposition

[16]

For
    these reasons, the appeal is dismissed, and Vitran shall pay Morgan costs in
    the amount of $7,500, inclusive of HST and disbursements.

Released: April 30, 2015 (A.H.)


Alexandra Hoy A.C.J.O.


David
    Watt J.A.

David Brown J.A.


