Sometimes it’s smarter to accept a demotion as an alternative to dismissal. Especially where there is a good reason for the demotion.
 
Brooke Haddock’s career as a seafood department manager for a Thrifty Foods chain of grocery stores in B.C. was sailing along smoothly until he separated from his wife.

Haddock then turned to alcohol as financial problems and stress from the failed marriage mounted.  It clearly affected his performance.

When Haddock continued to show up late for work, he was suspended for four days.  When his performance still did not improve, he was warned that his job was in jeopardy and that, if his poor behaviour continued, he would either be fired or demoted. 

However, Haddock’s problems with lateness continued and, after his drunkenness made other employee’s uncomfortable at a softball tournament, Thrifty had enough.  Haddock was permanently demoted from manager to a clerical position, correspondingly with about 15 per cent less pay.  Haddock did not report to work.  

The legal doctrine of constructive dismissal provides that an employer cannot unilaterally change any important condition of an employee’s job, such as job title or pay, without his or her agreement.  Since Haddock was demoted and his pay reduced, he opted to sue. 

In deciding whether to side with Haddock, the court determined that his 15 per cent pay cut was not, by itself, a material change to his job but when combined with his demotion, he had indeed been constructively dismissed. 

However, it was only a pyrrhic victory.  Haddock’s damages were almost entirely offset because he failed to accept the clerk’s position that Thrifty offered him.
 
The court’s decision may be surprising but it makes sense.  Even though Haddock was constructively dismissed, he did not have a reasonable reason to refuse the lesser job.  The irony here is that if he would have first tried the clerk’s job and found it humiliating, there likely would be no offset.   

• Daniel Lublin is an employment lawyer with Whitten & Lublin LLP.