Case Law Update – Jodoin v. Nissan Canada Inc.

Jodoin v. Nissan Canada Inc. [2013] O.J. No. 3995

The Ontario Superior Court recently ruled that a senior employee was constructively dismissed when he was moved to a newly created management position, even though his salary did not change.

The plaintiff Harry Jodoin joined the employer Nissan Canada Inc. in November of 2000 as a District Sales Manager. Over the course of 10 years, he was promoted 3 times, eventually landing in the position of Senior Manager Retail Sales and Sponsorships, where he was responsible for high level advertising and corporate sponsorships across Canada.

Then, in December of 2010, Nissan advised Jodoin that they were moving him into the newly created position of Senior Manager of Vehicle Participation Programme. Nissan provided Jodoin with no job description, no employees to supervise, no budget, no private office and no defined long-term goals. Jodoin went from performing high-level management functions to carrying out mainly on-line tasks from a cubicle located in a high-traffic area of the building.

Jodoin made extensive attempts to meet with management to discuss his new position and, after several months, he left the company, having deemed himself constructively dismissed, and sued Nissan for wrongful dismissal.

In considering Jodoin’s allegations, the Court found that the only essential element of Jodoin’s employment contract that had not changed was his salary, and that his new title was hollow since there was nothing and no one for Jodoin to manage. The Court concluded that a reasonable person in a similar position would have felt demoted in these circumstances, and found that Nissan had constructively dismissed Jodoin through the changes made to his employment.

Significantly, the Court also found in Jodoin’s favour in deciding that he had not been required to continue working in the demoted position in order to mitigate his damages flowing from the wrongful dismissal, and awarded him damages in excess of $100,000.

Implications for Employers

This case is significant for employers attempting to restructure their operations, as it shows that maintaining a senior employee’s salary despite a significant erosion of his or her management responsibilities may not be enough to avoid a claim for constructive dismissal. Employers planning to alter their management structure are well-advised to seek legal advice to reduce the potential for unintended liability.

Jodoin v. Nissan Canada Inc. (Click here to read the full case)