Constructive dismissal cases are tricky. The onus is on the employee to prove her case, often in the face of strong opposition from the employer. Moreover, the test is an objective one.  It is not the employee’s subjective assessment of the workplace conditions that rules the day.  Rather, it is the legal decision maker’s assessment as to what is objectively reasonable under the circumstances.  Add claims of harassment to the mix, and you have a recipe for a long and difficult case.

That is exactly what happened in Colistro v. Tbaytel, 2017 ONSC 2731 (CanLII), a June 16, 2017 decision of the Ontario Superior Court of Justice.  The plaintiff, Ms. Colistro was a long-term employee of Tbaytel, which is a municipal services board which operates under the City of Thunder Bay. In his decision, the trial judge accepted that in 1995, Ms. Colistro was sexually harassed by Mr. Benoit, who was then her immediate supervisor. At the time, Ms. Colistro complained about Mr. Benoit’s behaviour, and an investigation ensued. Mr. Benoit was then terminated on a without cause basis, one of the reasons for which was that he had sexually harassed Ms. Colistro. At that time, Ms. Colistro considered the issue to have been dealt with.

However, the situation changed dramatically more than ten years later, when Mr. Benoit was rehired by the defendant.  At the time of his rehire, those directly involved with Mr. Benoit within the defendant, knew that he had been previously fired, and that his termination involved allegations of sexual harassment.  They did not know that the allegations related to Ms. Colistro.  When the employer announced Mr. Benoit’s hire, Ms. Colistro became very upset.   She met with the employer’s representatives and provided them details of the sexual harassment in which Mr. Benoit had engaged. The employer then conducted its own due diligence at this point. It reviewed the files it had retained and its review substantiated what they had been told by Ms. Colistro.  As part of its due diligence, the employer contacted the former General Manager, who had retired, but who had knowledge of the events. She told the employer that Mr. Benoit had been terminated for sexual harassment and that it would be a “bad move” for the employer to rehire him.

While this was going on, Ms. Colistro advised the employer that she was not “eating or sleeping, was vomiting and on the verge of a nervous breakdown”.  She was eventually diagnosed with PTSD.  Nevertheless, the employer proceeded with the rehiring of Mr. Benoit. To accommodate Ms. Colistro’s concerns, it offered her an equivalent position in an adjacent building where contact with Mr. Benoit would be limited, but still possible. In the letter sent to Ms. Colistro, the hiring manager said “I have come to the decision that there is no legal or other reason not to go forward with hiring Mr. Benoit…You may find that you are unable to accept my decision, and, in that case, you will have to proceed as you see fit”.

Ms. Colistro, left the workplace on a disability leave, and never returned. She claimed that she had been constructively dismissed and that the employer had engaged in the intentional infliction of mental harm.

In the face of this unique presentation of facts, the employer was held to task by the trial judge for subjecting a long-term employee to a workplace that became untenable to her because the employer had rehired the man who had sexually harassed her over a decade before.    Calling the employer’s actions “flagrant and outrageous” the trial judge concluded that the plaintiff had been constructively dismissed, and awarded her 12 months of notice. Characterizing the employer’s actions as “grossly unfair, unduly insensitive and in blatant disregard of (Colistro’s) interests, the trial judge awarded the plaintiff a further $100,000 in Honda damages.  The plaintiff’s claim for $1,000,000 in damages for intentional infliction of mental harm was dismissed.

What can we take from this unusual case?

First, the Colistro case is a good reminder that a constructive dismissal can be triggered by a poisoned workplace environment, not just things like a change in position, or a reduction in compensation.  In reaching his decision, the trial judge relied on two earlier Ontario Court of Appeal cases, Shah v. Xerox Canada Ltd[1] and General Motors of Canada Limited v. Johnson[2] which so held.

Second, it is interesting to note that the ease with which the trial judge concluded that the workplace had become untenable to Ms. Colistro, based on how she reacted to the news that her former harasser would be returning to the workplace. While the trial judge had the benefit of expert evidence on this issue, he nevertheless was prepared to accept Ms. Colistro’s reaction as credible, and that it undermined the employment relationship. In my view, this result is a sign of the times, when some legal decision makers are truly understanding of how serious the impact of workplace sexual harassment is on employees.

Third, the trial judge clearly put the interests of this employee ahead of the employer’s need to hire an employee into a senior role.  This employer appears to have used an equation – offering Ms. Colistro a modified role on the one hand – with its desire to rehire Mr. Benoit on the other – and decided its organizational need tipped in the favour of hiring someone who had had engaged in serious misconduct.  While this employer may have been able to rationalize this decision – perhaps it thought that it happened a long time ago, or that Ms. Colistro had exaggerated –  or that it could keep an eye on Mr. Benoit so it wouldn’t happen again, this Court would have none of it, clearly seeing the unfairness to Ms. Colistro.

Finally, some sexual harassment cases have a really long “tail”.  In other words, once sexual harassment occurs in an organization, the workplace consequences may continue for a very long time.  In this instance, the employee who had engaged in the harassment had been terminated, and the situation lay dormant for over a decade.  It was his rehire that resurrected the issue, and prompted Ms. Colistro’s reaction, her ultimate constructive dismissal, and this employer’s subsequent liability.