By Jeffrey R. Smith
Aug 11, 2025
“When an employer is considering letting somebody go, once that decision has been reached, it’s better to pull off the bandage fast rather than slow.”
So says Victoria-based labour and employment lawyer Michael Penner of Kent Employment Law, after a British Columbia court determined that an employer constructively dismissed a worker when the work environment turned hostile towards her following the owner’s displeasure with her work and her desk was given to a new employee.
Professional Components (PC) is a producer of shock absorber seats based in Sidney, BC. It hired the worker to be a senior bookkeeper, starting on April 3, 2017, to manage PC’s financial affairs, including preparing the annual budget, completing monthly financial reports, and completing the payroll on time.
The worker had her own office with a desk and filing cabinet. According to the worker, she got on well with other employees and managers.
On April 25, 2018, the worker asked PC’s general manager for a salary increase. The general manager passed the request along to the owner, advising that the worker was uncovering accounting errors and getting them corrected. The worker had also made some mistakes about payment reconciliations of noticeable amounts.
Change in work environment
On April 28, the owner came into the worker’s office at 6:30 p.m. in a state of agitation, concerned about a significant accounting error. The owner believed that the worker was being flippant about it and the worker felt that the owner was being unreasonable. The owner told the worker that it was a mistake that could justify her dismissal.
The worker was upset by the meeting and, when she came to work the next day, she felt she was being shunned by co-workers, including the general manager who she considered a friend. The administrative assistant told her to report to the production manager, with whom she had a good relationship. However, from that point on, the production manager rarely spoke to her, the worker claimed.
As it turned out, the owner had been sharing his criticism of the worker’s work with others in the office.
The owner told the general manager to give the worker her raise as it wasn’t going to make “a huge difference at this point.” However, he also said they would “make one last effort to have her get along with the others in the office and amend her faults.”
On May 23, the general manager asked the owner to approve the worker’s raise. The owner replied in the affirmative but said “we are officially in the hunt… we need to find a replacement… as soon as possible.”
Constructive dismissal
The general manager advised that the worker would receive an increase of $1 per hour immediately and another $1 “after successful completion of year end by no later than June 30.” The worker said that she would have “all the required year end for the financial statements” by June 30.
The worker completed the year end information and gave it to an external accountant for final review. She then increased her pay by another $1 per hour in the payroll and the general manager signed her paycheque.
On Sept. 10, PC hired a new financial controller. On the weekend before he started, the general manager and his wife came in and removed all of the worker’s belongings from her desk and put them in a smaller desk along a side wall in the office. The financial controller was given the main desk and they were expected to share the office.
The worker arrived on Monday morning to discover the changes and felt shocked and humiliated. Two days later, she advised the general manager that she believed that she had been constructively dismissed and arranged for her final pay. PC issued a Record of Employment stating that “shortage of work” was the reason for her leaving.
The worker filed a claim for constructive dismissal seeking damages for four months’ salary. PC denied she was constructively dismissed and argued that it had after-acquired cause when it discovered she had breached its trust by orchestrating her additional $1-per-hour pay increase when she hadn’t completed the year-end accounts.
After-acquired cause
The court found that PC didn’t establish after-acquired cause for dismissal. The company alleged that the worker orchestrated a pay increase before completion of the year-end accounts, but the court found that the terms of the agreement regarding the pay raise were “vague and imprecise” and the worker had fulfilled her obligations by submitting the year-end accounts to the external accountant by June 30, 2018. As a result, PC had “fallen far short of demonstrating” that the worker fundamentally breached her employment contract, the court said.
“There were times where [the worker] apparently had made some fairly significant errors in her work, and [PC] could have treated those errors as an opportunity to manage her performance so that it wouldn’t be completely arbitrary or anecdotal,” says Penner. “And then in response to her claim for constructive dismissal, the issues that it was well aware of beforehand were argued as cause after the fact – but it didn’t establish that the information relied on for cause was something that wasn’t discoverable during her employment.”
The court also accepted the worker’s assertion that the work environment became intolerable following the meeting with PC’s owner. The worker was marginalized, ostracized, and ultimately demoted when her office was reconfigured and her desk reassigned to the new financial controller, said the court, noting that her evidence was bolstered by PC’s acknowledgment that the owner wasn’t happy with her work and wanted her fired.
The court determined that PC’s actions, particularly the eviction from her desk for a younger male employee, made continued employment intolerable for the worker and constituted constructive dismissal.
The constructive dismissal came out of two main elements, according to Penner.
“[The owner] wasn’t particularly discreet in expressing his displeasure with [the worker] and her work performance, and [the worker] sensed that her co-workers had all been made privy to [his] dissatisfaction – he was quite vocal about exposing her shortcomings,” he says. “Then it compounded with being moved out of her desk, her subordinate essentially taking her desk, and then having her in a visibly subservient role at a small desk within the same general office – not only was there verbal communication that lowered her colleagues’ esteem, but then this very visible, symbolic demotion on top of that created what the court was satisfied was essentially a work environment that she could no longer tolerably abide.”
Reasonable notice
In determining the reasonable notice period, the court considered that the worker, who was 52 at the time of dismissal, had worked for 17.5 months in a skilled position with some managerial duties. The court found that a three-month notice period was reasonable, noting that employees dismissed within their first three years of employment in BC are often awarded proportionately longer notice periods – case law indicates that “employees in their 50s and 60s will face more difficulty finding employment because of their age,” said the court.
PC was ordered to pay the worker three months’ salary in lieu of notice, minus 14 days’ severance pay the company already paid at her termination. A claim against PC’s owner personally was dismissed, as the court found no basis for the imposition of personal liability.
If PC was genuinely displeased with the worker’s performance, it took a poor path by granting her request for a raise and then planning for her replacement without giving her any warnings – particularly since she was a relatively short-term employee, says Penner.
“The easiest path PC could have taken was, as soon as they were contemplating letting her go, they could have given her working notice and have her help transition her replacement,” he says. “Or they could have given her pay in lieu of notice with very little exposure financially – and if they had a termination clause, it could have been three weeks’ pay as an employment standards minimum.”
PC demonstrated a pattern of fundamental mistakes that should be avoided by employers, says Penner.
“I think PC was remiss in not addressing performance issues in a more formal way, whether it was a letter of expectation or something that set out to her in very clear terms, these are the standards you need to meet, you’re not meeting them, and we have an expectation that you will meet these standards or there will be consequences,” he says. “And had it just simply let her go without cause, her capacity to sue them would have been zero – but because it didn’t pull the trigger immediately, events transpired that gave the worker the basis of her claim and [PC] ended up paying her what they would have paid her anyways, but now it has the ignominy of a court decision against it.”
