When an employee takes a leave of absence, employers will often ask that they return company property until they can come back to work. This was the basis of the plaintiff’s constructive dismissal claim in the recent decision of Tuinhof v. Modern Heating Brantford Ltd., 2022 ONSC 3418 [Tuinhof]. To the dismay of the plaintiff, the Ontario Superior Court of Justice (“ONSC”) held that employees of the defendant company did not have the right to use a company cellphone or vehicle for private purposes as a condition of employment and, as a result, the claim was dismissed. This decision highlights a number of key considerations for employers when requesting employees on a leave of absence to return company property.
The plaintiff worked for the defendant as a service technician and installer of HVAC equipment for over 19 years. In March 2019, the plaintiff became frustrated with mould he had discovered in one of his houses and its effects upon his wife’s health, so he punched a solid oak cabinet, injuring his wrist in the process. The plaintiff then went on a medical leave of absence from which he never returned.
During his leave, the plaintiff obtained Employment Insurance (EI) benefits and the defendant continued his participation in its group benefits plan. However, while on leave, the plaintiff solicited business from the defendant’s customers and completed multiple installations and service calls without authorization. Furthermore, although the defendant derived no benefit from the plaintiff’s side jobs, the plaintiff affixed new gas installation tags indicating the defendant as the contractor.
In July 2019, the defendant advised the plaintiff that it wanted to establish a return-to-work plan, and requested confirmation that the plaintiff was medically cleared to return to work. The defendant also asked the plaintiff to return the company cellphone and the keys to the company vehicle in his possession. Although the defendant expressed dissatisfaction that the plaintiff was performing side jobs without authorization, it told the plaintiff twice that he was not fired.
Several days later, the plaintiff’s lawyer issue a demand letter, and the matter proceeded to litigation.
The ONSC held that the defendant’s request for the plaintiff to return the company cellphone and vehicle did not constitute a constructive dismissal. The Court found that the essential purpose of the cellphone and vehicle was to benefit the defendant. These items were provided to employees to complete work tasks; they were not perks of the job. The Court found that the defendant’s employees did not have a general entitlement to use a company cellphone or vehicle for private purposes as a condition of employment.
The ONSC also found that a reasonable person in the circumstances would not have felt than an essential term of the employment contract had been altered. The defendant twice advised the plaintiff that his employment has not been terminated, and continued to pay premiums for his benefits.
Interestingly, the ONSC stated that even if the plaintiff was constructively dismissed, the defendant would have had just cause for dismissal, given that the plaintiff solicited business from the defendant’s customers for his own benefit, in breach of his duty of loyalty, and affixed new gas installation tags indicating the defendant as the contractor, exposing the company to significant potential liability.
Employees generally do not have the right to use company property for private purposes. However, to mitigate the risk of a constructive dismissal claim, employers should communicate their expectations around the use of company property, and the conditions under which it must be returned to the company, at the outset of the employment relationship. This can be done through well-drafted employment contracts and workplace policies. Furthermore, when requesting an employee on a leave of absence to return company property, the best practice is to make the request at the start of the leave. If the request is made later, for whatever reason, the employer should clearly communicate the reason for the request—for example, another employee needs to use the property.
Employers do not need a non-competition or non-solicitation agreement to prevent employees from competing with their business or soliciting their customers during the term of employment. As illustrated by Tuinhof, employees owe their employers a common law duty of fidelity, which forbids them from engaging in such conduct while still employed. An employee’s breach of this duty may amount to just cause for termination.
It bears mentioning that the outcome of the Tuinhof decision may have been different had the defendant not taken steps to reaffirm its commitment to comply with the employment agreement, for example, by reiterating that the plaintiff had not been fired and continuing to pay premiums for his benefits. The outcome may also have been different had the plaintiff’s evidence not been marred with credibility issues due to, for example, the plaintiff claiming EI benefits while working. Constructive dismissal claims are typically based on the totality of circumstances surrounding an employer’s decision (or lack thereof). Therefore, employers who seek to make temporary changes to an employee’s employment should consider coupling those changes with actions demonstrating their intention to remain bound by the employment contract.