CUB 33370

The issues under appeal are whether the claimant voluntarily left his employment without just cause and whether the disqualification should apply for each week in the benefit period following the waiting period pursuant to subsection 28 (1) and 30.1 (1) of The Unemployment Insurance Act.

On August 9, 1993 the claimant left his work with Metroland Printing, Publishing and Distribution. He claims that he was forced to leave his job because it had been changed from manager of the mailing department, manager of the traffic department and health and safety coordinator to manager of shipping and receiving only. This change in duties resulted in a change in reporting from the director of production to plant manager only.

The claimant said in his application for unemployment insurance, Box J "early retirement". In an interview with a Commission representative he stated in Exhibit 4:

"Early retirement was at the request of the employer due to work force reduction. Claimant states if he did not accept the early retirement, than another employees) would likely be laid off."

Exhibit 8-2 is a curious letter from the employer To Whom It May Concern dated January 11, 1994. It states in part:

"He was laid off his employment due to department closure."

Exhibit 9 is the report of a telephone conversation by a representative of the Commission with Connie Glover the writer of the letter in Exhibit 8-2. She is reported in this exhibit as saying that the letter of January 11, 1994 was for reference purposes. No where in the material is there a definition of these words. This exhibit continues by summarizing the contents of a letter dated August 9, 1993 from the employer to the claimant (now filed as Exhibit 14-9) which outlines the options provided to the claimant as follows:

Option A: Transfer to shipping department 1 - transfer to the position of Manager Shipping & Receiving at the same salary (minus car allowance as no travel is required). or

Option B: Severance Package There is then set out three options which were made available to the claimant in the event that he failed to exercise Option A. Exhibit 9 goes on to say:

"The claimant chose Option B., which was the severance package, and turned down the job of Manager of Shipping and Receiving Dep. at exactly the same salary."

The claimant filed a claim for benefit which was established effective May 15, 1994 and by letter dated August 10, 1994 he was advised by the Insurance Agent that he was disqualified from receiving benefits as he had voluntarily left his job with Metroland Printing without just cause.

"Work Force Reductions" is a term used by employers in an effort to downsize staff. The term work force reduction under the Unemployment Insurance Regulations requires that specific conditions be met. These are contained in Exhibit 6. There is no evidence that the claimant belonged to a group of employees covered by the Work Force Reduction process and in fact the Board of Referees in Exhibit 7-12 makes the following finding:

"The claimant does not belong to a group of employees covered by the work force reduction procedure."

The claimant refused the option of transferring to the shipping and receiving department as the department manager. As I have already stated and as appears in Exhibit 14-13 the claimant's position was as manager of the mailing department, manager of the traffic department and coordinator of the health and safety department.

After a meeting with a representative of the Department of Labour involving the health and safety department, a report was delivered to the director of production of the employer in which the claimant's conduct was reported to be less than professional. Shortly following that a meeting was called at which the director of production and the claimant were in attendance. The claimant was advised that while his past performance was commendable, the health and safety issues of the day required a more sophisticated approach and that his style was no longer acceptable. (Exhibit 14-7) A further meeting with the director of production, director of human resources, plant manager and the claimant was held. The claimant was advised that he was stripped of his responsibilities in regard to the health and safety program, that he was no longer to associate himself with the health and safety program at any level and that due to the mailing department closure he would be transferred to the shipping and receiving department. He was given two options (1) to transfer to the shipping department, or (2) accept the severance package. None of the evidence in Exhibit 14-6, 14-7 or 14-8 is challenged.

It is submitted on behalf of the claimant that he had been constructively dismissed. The Board of Referees made a thorough review of the relevant facts and concluded:

"A loss of employment was, therefore, voluntary as the company offered him a suitable position at the same salary which the claimant refused."

In my opinion, however, the Board fell into error in failing to consider whether the claimant had just cause for leaving his employment.

The Board was called upon to determine whether the claimant did leave voluntarily and if he did so with just cause. The Board of Referees erred in law as to the meaning to be given to the words "without just cause" in Section 28 and failed to properly exercise its jurisdiction.

Section 28 (1)

(1) "A claimant is disqualified from receiving benefits under this Part if he lost his employment by reason of his own misconduct or if he voluntarily left his employment without just cause."

subsection 28 (4)

(4) "For the purposes of this section, 'just cause' for voluntarily leaving an employment exists where, having regard to all the circumstances, including any of the following circumstances, the claimant had no reasonable alternative to leaving the employment:"

The claimant relies on subsection 28 (4)(i), (j), (m) and (n) which read as follows:

"(i) significant changes in work duties;

(j) antagonistic relations between an employee and a supervisor for which the employee is not primarily responsible;

(m) undue pressure by an employer on employees to leave their employment;

(n) such other reasonable circumstances as are prescribed."

I am unable to find that there is any evidence to support the claimant's position in his reliance upon section 28 (4) (j), (m) or (n).

"Some cases interpret the words 'without just cause' as ones which impose upon the claimant a duty to act as a prudent person would in the circumstances (CUB 9449); or a duty to try and reconcile ones differences with the employer before leaving (CUB 11413). Generally however there is no requirement that the employee make any efforts towards reconciliation in a case where the employer has acted unilaterally in any manner which fundamentally alters the terms of employment as they existed prior to separation. The same is true in a situation where the employer presents the employee with fundamentally different and new terms of employment, or several options as to such new terms, and conveys to the employee that he must accept these new terms or one of the set of terms or else face dismissal. In such a case the employee is fully entitled to treat the instructions or options as a constructive dismissal and leave." (CUB 18009, pages 5 and 6)

As I read the evidence in the docket the claimant before me was fully entitled to treat the instructions or options as a constructive dismissal and leave.

"Umpires have generally recognized that a fundamental change in the conditions of employment constitute just cause for leaving .... It would appear that the traditional grounds at common law of constructive dismissal are all available as valid grounds for voluntarily leaving with 'just cause' within the meaning of Section 41 (now Section 28) of the Act." (CUB 18009, page 6)

The employer was in fact offering the claimant a demotion. He would no longer be manager of the mailing department. He would no longer be coordinator of the health and safety department which he had initiated, nurtured and promoted and he would become the manager of shipping and receiving only. He formerly reported to the director of production and in his new position he would be the plant manager only.

In Stewart v. MacMillan Bloedel Ltd. 37 C.C.E.L. 292 the issue before the court was whether the plaintiff who had been transferred was entitled to treat the transfer as a constructive dismissal. At page 301 Mr. Justice Harvey set out the factors which can be considered in determining whether an employee had been constructively dismissed. They are:

"The content of the discussion between the employer and the employee at the time the employee was told of the transfer, the fact that the transfer involved the loss of prestige and position, the circumstances surrounding the change in jobs."

"The essential question is whether in all the circumstances of the case the responsibilities and duties of the employee had been so altered by the employer as to constitute a breach of the fundamental term of the contract of employment"

On the basis of these facts I find that the claimant was constructively dismissed and had just cause for leaving.

In CUB 18009 the claimant in his appeal before the Board and the Umpire relied on passages from Levitt, the Law of Dismissal in Canada (1985) Canada Law- Book, Aurora. In CUB 18009 Umpire MacKay quotes from this text as follows:

"However, although any major change in the employment relationship can cause a constructive dismissal, there are certain types of changes which have traditionally been litigated:

1. Forced resignation,

2. Demotion,

3. Reduced remuneration or refusal to pay,

4. Downward change in reporting functions,

5. Unilateral change in job responsibilities,

6. Forced transfer ...

7. Abusive treatment,

8. Reduced work week, unpaid overtime, compulsory leave of absence,

9. Short term lay-off."

There can be no doubt that of the above the following are applicable in the matter before me,

(1) Forced resignation,

(2) Demotion,

(3) Downward change in reporting functions,

(4) Unilateral change in job responsibilities, and

(5) Forced transfer.

"The loss of employment was, therefore, voluntary as the company offered him a suitable position at the same salary level which the claimant refused." (Exhibit 17-3)

In my opinion the Board erred in law in failing to discuss the meaning to be given to the words "without just cause" in Section 28 (1) of the Act and in failing to consider whether the claimant had been constructively dismissed.