Employee Barred from Construction Site Deemed Constructively Dismissed
March 18, 2025
Article by:
Taylor Topliss
Previously printed in the LexisNexis Labour Notes Newsletter.
A complicated issue arises in employment law when an employer provides services to a customer and one of the employer’s employees is prohibited from working due to the customer’s requirements.
The recent decision of Kurik v. CAS Ventures Ltd., 2024 BCSC 1862 reviews this issue and provides some insight for employers.
Background
- A 57-year-old tree faller lost his job because the construction site contractor, not the employer, removed the employee from the worksite due to poor performance.
- The BC Employment Standards Branch dismissed the employee’s complaint due to frustration of the employment contract.
- The BC Supreme Court allowed the employee’s civil lawsuit for wrongful dismissal to proceed.
- The Court determined that the employer had not asserted just cause at the time of dismissal and the employee was constructively dismissed when he was excluded from the worksite and ceased being paid.
- Notwithstanding the fact that the employee had only been employed for four months and had not made reasonable efforts to find alternative employment, the Court made a damages award equivalent to two months’ notice of termination.
Why is this not frustration of the employment contract?
Court decisions have held that frustration of an employment contract may arise where an employee is prohibited from working due to the requirements of a customer.
For example, in Croke v. VuPoint System Ltd., 2024 ONCA 354, the Ontario Court of Appeal confirmed that an employee’s failure to comply with a customer’s vaccination policy resulted in his complete inability to perform the duties of his position and that amounted to frustration of the employment contract.
At first blush, the facts in Croke appear somewhat analogous to the facts in Kurik. The employee could not work due to the requirements of the customer. Unfortunately, frustration of contract is difficult to establish. The employer must show that an unforeseeable supervening event results in a radical alteration of the employment contract.
In Croke, the unforeseeable supervening event was the customer’s vaccination policy. In Kurik, we do not have benefit of a foreseeability analysis by the Court but the Croke decision suggests frustration of the employment contract may not arise.
In Kurik, the employee was removed from the construction site due to poor performance and behaviour. Arguably, such misconduct is foreseeable – i.e. contemplated by the employer and employee – and therefore not in the nature of a supervening event that is capable of frustrating the employment contract.
Okay, it is not frustration but why is it constructive dismissal?
The Kurik decision does not provide expansive reasons for the determination of constructive dismissal and does not specifically cite the established two-branch test for constructive dismissal: (1) a significant unilateral change to terms of employment by the employer; or (2) a course of conduct that shows the employer no longer intends to be bound by the employment agreement.
Arguably, the first part of the constructive dismissal test is not met in Kurik because the employer did not unilaterally change any terms of employment. Instead, the customer, based on the conduct of the employee, prohibited him from working on site. That said, the Court seems to rely on the fact that employer ceased paying the employee as the unilateral change or the course of conduct showing the employer no longer intended to be bound by the employment agreement. (This is interesting in light of the fact that the employee was no longer permitted to work.)
The Court in Kurik proceeded to award the employee damages for a two-month notice period on the basis that he should have known by then he would not be reinstated to employment. The Court seemed to indicate that a notice period of one month would have been appropriate had those facts not been present.
Takeaways for employers
- Frustration is difficult to establish – there must an unforeseeable supervening event not contemplated or caused by the employer or employee that radically alters the employment contract.
- Consult with legal counsel before asserting just cause for termination or frustration of the employment contract.
- BC Employment Standards Branch determinations may not prevent or impact a civil lawsuit for wrongful dismissal.
- Short-term employees may still be entitled to relatively longer notice periods, even without inducement, significant responsibilities or reasonable efforts to find alternative employment.
While every effort has been made to ensure accuracy in this article, you are urged to seek specific advice on matters of concern and not to rely solely on what is contained herein. The article is for general information purposes only and does not constitute legal advice.
March 18, 2025
Previously printed in the LexisNexis Labour Notes Newsletter.
A complicated issue arises in employment law when an employer provides services to a customer and one of the employer’s employees is prohibited from working due to the customer’s requirements.
The recent decision of Kurik v. CAS Ventures Ltd., 2024 BCSC 1862 reviews this issue and provides some insight for employers.
Background
- A 57-year-old tree faller lost his job because the construction site contractor, not the employer, removed the employee from the worksite due to poor performance.
- The BC Employment Standards Branch dismissed the employee’s complaint due to frustration of the employment contract.
- The BC Supreme Court allowed the employee’s civil lawsuit for wrongful dismissal to proceed.
- The Court determined that the employer had not asserted just cause at the time of dismissal and the employee was constructively dismissed when he was excluded from the worksite and ceased being paid.
- Notwithstanding the fact that the employee had only been employed for four months and had not made reasonable efforts to find alternative employment, the Court made a damages award equivalent to two months’ notice of termination.
Why is this not frustration of the employment contract?
Court decisions have held that frustration of an employment contract may arise where an employee is prohibited from working due to the requirements of a customer.
For example, in Croke v. VuPoint System Ltd., 2024 ONCA 354, the Ontario Court of Appeal confirmed that an employee’s failure to comply with a customer’s vaccination policy resulted in his complete inability to perform the duties of his position and that amounted to frustration of the employment contract.
At first blush, the facts in Croke appear somewhat analogous to the facts in Kurik. The employee could not work due to the requirements of the customer. Unfortunately, frustration of contract is difficult to establish. The employer must show that an unforeseeable supervening event results in a radical alteration of the employment contract.
In Croke, the unforeseeable supervening event was the customer’s vaccination policy. In Kurik, we do not have benefit of a foreseeability analysis by the Court but the Croke decision suggests frustration of the employment contract may not arise.
In Kurik, the employee was removed from the construction site due to poor performance and behaviour. Arguably, such misconduct is foreseeable – i.e. contemplated by the employer and employee – and therefore not in the nature of a supervening event that is capable of frustrating the employment contract.
Okay, it is not frustration but why is it constructive dismissal?
The Kurik decision does not provide expansive reasons for the determination of constructive dismissal and does not specifically cite the established two-branch test for constructive dismissal: (1) a significant unilateral change to terms of employment by the employer; or (2) a course of conduct that shows the employer no longer intends to be bound by the employment agreement.
Arguably, the first part of the constructive dismissal test is not met in Kurik because the employer did not unilaterally change any terms of employment. Instead, the customer, based on the conduct of the employee, prohibited him from working on site. That said, the Court seems to rely on the fact that employer ceased paying the employee as the unilateral change or the course of conduct showing the employer no longer intended to be bound by the employment agreement. (This is interesting in light of the fact that the employee was no longer permitted to work.)
The Court in Kurik proceeded to award the employee damages for a two-month notice period on the basis that he should have known by then he would not be reinstated to employment. The Court seemed to indicate that a notice period of one month would have been appropriate had those facts not been present.
Takeaways for employers
- Frustration is difficult to establish – there must an unforeseeable supervening event not contemplated or caused by the employer or employee that radically alters the employment contract.
- Consult with legal counsel before asserting just cause for termination or frustration of the employment contract.
- BC Employment Standards Branch determinations may not prevent or impact a civil lawsuit for wrongful dismissal.
- Short-term employees may still be entitled to relatively longer notice periods, even without inducement, significant responsibilities or reasonable efforts to find alternative employment.
While every effort has been made to ensure accuracy in this article, you are urged to seek specific advice on matters of concern and not to rely solely on what is contained herein. The article is for general information purposes only and does not constitute legal advice.