How a Bad Hire Can Trigger Constructive Dismissal

How a Bad Hire Can Trigger Constructive Dismissal

 

Organizations that hire a new employee who has a negative history with a current employee, may find themselves on the wrong end of a constructive dismissal lawsuit and forced to deal with lasting reputation damage. Just ask Thunder Bay-based Tbaytel.

 

The Case

 

In 2017, Tbaytel was ordered by an Ontario Superior Court judge to pay a long-time employee, Linda Colistro, more than $114,000 after the city-owned company hired an employee, Steve Benoit, who had previously worked with Colistro — despite the fact that it was known to Tbaytel management that when the two worked together in the 1990s Benoit had sexually harassed Colistro.

 

To mitigate the impact, prior to hiring Benoit Tbaytel offered Colistro the opportunity to work in a separate building in an equivalent role, thus assuring her that she would not come into day-to-day contact with Benoit. Colistro deemed this categorically unacceptable.

 

Ultimately, Tbaytel hired Benoit despite Colistro’s objections, and also against warnings from an external advisor who wrote in an email that doing so would be a “bad move” for the company. Shortly after the hire, Colistro took indefinite medical leave, and was eventually diagnosed with post-traumatic stress disorder and granted long-term disability benefits after doctors concluded that her psychological and physical suffering was rooted in the fear of having to work alongside someone who had harassed her.

 

The Ruling

 

In 2016, Colistro filed suit against Tbaytel claiming that the hiring of Benoit and the consequences on her health and ability to work were tantamount to a constructive dismissal. In its ruling (Colistro v. Tbaytel, 2017 ONSC 2731), the court noted the following:

 

• Tbaytel was aware of the history between Benoit and Colistro, including the fact that Benoit had been previously terminated specifically for sexually harassing Colistro.
• Tbaytel was made aware the negative impact that hiring Benoit would have on Colistro.
• Tbaytel’s offer of an alternative position (i.e. different building) was not sufficient, because Colistro made it clear from the outset that she viewed hiring Benoit in any capacity as unacceptable.

 

Based on these facts, the court concluded that a reasonable individual would find it impossible to continue working for their employer in such an unhealthy and hostile work environment. As such, the claim for constructive dismissal was accepted and Tbaytel was ordered to pay around $117,000 in overall damages. Notably, however, this was less than the about $700,000 that Colistro was seeking, because the court failed to find that Tbaytel intentionally meant to inflict pain and suffering on Colistro (i.e. the purpose of hiring Benoit was not to punish Colistro or compel her to quit).

 

The Lesson for Employers

 

This case highlights two important takeaways for employers. The first is that the incidents like sexual harassment are not static events that are limited to a specific times, places or circumstances. Long after the improper activity stops, a victim may continue to be psychologically vulnerable and employers have a legal — and many would also say, a moral — obligation to provide a reasonable amount of protection.

 

The other takeaway, more general, is that constructive dismissal can happen indirectly. It is not limited to unilaterally changing an individual’s job activities, description, or some other material aspect. Hiring someone who works in a different office could constitute constructive dismissal. In the same light, firing someone who was previously providing an employee with essential supervisory or management support, and failing to replace them (or find some other source of support for the employee) could also be deemed constructive dismissal.

 

Learn More

 

Constructive dismissal is not a black-and-white category. And even in situations where the courts deem that constructive dismissal has happened, liability is not standardized — there can be, and usually are, factors that increase or mitigate blameworthiness, and ultimately, the costs.

 

Employers need to ensure that they are doing the right things for their workers— both in the court of law and the court of public opinion — and also that they properly demonstrate and document this commitment. Otherwise, they could find themselves facing a 6 or possibly even 7-figure civil judgement and, like Tbaytel, making international headlines for all of the wrong reasons.