Exec cries forced resignation through demoted position and $90,000 salary reduction
Ontario's Superior Court of Justice recently dealt with an employment law matter involving constructive dismissal following an extended maternity leave.
The case centred on whether an employer's attempt to demote and reduce an employee's salary upon her return from maternity leave constituted wrongful termination.
The worker argued that her employer constructively dismissed her by presenting a letter agreement that demoted her from her executive position and reduced her salary by $90,000.
She said that the demotion and pay cut, presented after she had been on extended maternity leave at the company's request, created a coercive environment that forced her resignation.
The case involved an executive at an advertising company that faced severe financial pressures during the COVID-19 pandemic. The company reduced its workforce from forty or fifty employees to ten, including management.
To ensure survival and recovery, the employer promoted its second-year director of analysis and insights to associate partner and vice-president of media and analytics in March 2021, then again to executive vice-president, media and analytics in October 2021.
This final promotion came with a significant salary increase from $220,000 to $300,000, and a phantom share allocation increase from 2.5% to 5%.
Despite these restructuring efforts and the hard work of personnel,...
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