IN THE SUPREME COURT OF NOVA SCOTIA
Citation: Brannan v. Exxon Mobil Corporation, 2007 NSSC 281
Date: 2007/10/01
Docket: S. H. No. 192170
Registry: Halifax
Between:
John K. Brannan
Plaintiff
v.
Exxon Mobil Corporation
Defendant
Judge: The Honourable Justice A. David MacAdam
Heard: April 10, 11, 12, and 13, 2007, in Halifax, Nova Scotia
Final Written May 28, 2007
Counsel: S. Bruce Outhouse, Q.C. , for the Plaintiff
Grant Machum, for the Defendant
By the Court:
[1] This proceeding involves a claim of constructive dismissal. The Plaintiff, John K. Brannan, (herein the “Plaintiff” or “Brannan”), by letter dated November 16, 2001 addressed to Geoffrey J. Woodbury, (herein “Woodbury”), President of ExxonMobil Canada Properties, (herein “EM Properties”), tendered his resignation as an employee of the Defendant, Exxon Mobil Corporation (herein the “Defendant” or “EM Corp”). Brannan wrote, “... I do not intend to continue my employment with ExxonMobil in a lesser position ...”. At issue is whether Brannan had been constructively dismissed from his employment, notwithstanding having tendered his resignation.
BACKGROUND
[2] Brannan joined Superior Oil as a construction foreman involved in building offshore facilities in March 1981. In 1986, Superior Oil was taken over by EM Corp and Brannan continued as an employee of EM Corp. In 1995, he was temporarily seconded to Mobil Oil Canada to work in Calgary, Alberta as a drilling superintendent. The estimated duration of this assignment was approximately “two-three years”.
[3] Sable Offshore Energy Inc. (herein “SOEI”) was created as a vehicle for the five corporations involved in the development of the Sable Offshore Energy Project (herein “SOEP”). The five energy companies held varying percentage stakes in the offshore, with Mobil Oil Canada Limited and Mobil Canada Resources Limited together holding slightly over 50%, Shell Canada Limited a little over 31% and the remaining three partners each holding less than 10%. SOEI did not have any direct employees, its personnel being composed of temporary secondees from each of the shareholders. SOEI was governed by a Board of Directors composed of one representative from each shareholder and a Committee of Shareholder Representatives, also with one representative from each shareholder. In most cases the same representatives sat on the Board of Directors and the Committee of Shareholder Representatives. There was also a Management Committee composed of one representative from each corporation. The five partner corporations contributed their respective interests in six fields which formed the SOEP. The Project was planned in two “tiers”. The development of the initial three fields was already underway when Brannan was seconded to SOEI by Mobil Oil Canada Properties in August 1998.
[4] Brannan said SOEI was formed to construct, develop and manage the SOEP Project. When he joined SOEI, the initial construction and development phase of the SOEP was already underway. The goal was to have the first gas flowing by the end of 1999, at which time, it was understood, SOEI would transition to a production management phase with respect to the first three fields, with limited new construction and drilling. Brannan said on his arrival there were no “tier one” facilities in existence. His role was primarily to implement the project, including the six fields, oversee the engineering and the building of an operating organization for drilling the wells, to interface with regulatory authorities, and to oversee the ancillary support required to enable SOEI to carry out its objectives. As noted by his counsel, by December 1, 1999, Brannan “... had direct authority over all three key aspects of the Sable Project - namely, exploration, development and production”. Brannan testified SOEI had responsibility for all drilling, all facilities and their design, and the performance of wells under production.
[5] The “tier two” phase depended mainly on the level of production from the first three fields. It was anticipated that work would be underway in respect to development of “tier two” in early 2000 or 2001.
[6] Apparently Brannan was originally offered the position of General Manager of SOEI, with the title later changed to President and General Manager. He said he arrived in Halifax as General Manager in February 1998, and by April 1st, he held the title of both President and General Manager. At the time of this secondment, Brannan held the position of Operations Manager with Mobil Oil Corporation. This position did not change during his secondment with SOEI. It was anticipated that following the temporary secondment with SOEI, Brannan would be re-assigned within the Mobil group of companies, in Canada or elsewhere.
[7] In December 1999 EM Corp was formed as a result of the merger between Mobil Corporation and Exxon Corporation. Brannan’s position as Operations Manager with Mobil Oil Corp continued in the merged entity of EM Corp. He also signed an acknowledgement that his EM Corp internal position as “Manager of Operations and Production (Sable)” did not trigger the Mobil Corporation Employee Severance Plan (herein “CIC”), nor did it involve a “diminution of duties”.
[8] As Mobil Oil Canada Properties held the largest stake in the SOEP, its representative had been Chair of the Board of Directors, as well as of the Committee of Shareholder Representatives and the Management Committee. Brannan testified that in late 1999 Ken Miller assumed these responsibilities on behalf of Mobil Oil Canada, although he continued to reside in Calgary and had other responsibilities. Brannan communicated with him by phone. He attended Committee meetings as the President and General Manager of SOEI.
[9] In late 2000, after the merger, Jeff Woodbury succeeded Mr. Miller, becoming Production Manager for Exxon Mobil Corporation’s Eastern Canadian Operations. As was apparently the practice, he held both the aforementioned internal title, and the external titles of President of Exxon Mobil Canada Properties and President of Exxon Mobil Canada Limited. He also assumed the position of Chair of SOEI’s Board of Directors and Management Committee.
[10] In March 2001, Brannan filled out an Employee Development Report, in which, under “Career Interests and Considerations”, he indicated “Seek other opportunities in the Exxon Mobil world. Particular interest in the development company, drilling organization, or new business operations development.” Woodbury completed an “Assessment and Development Summary” for the period January 2000 - March 2001, after consulting with his predecessor, Mr Miller. In a section entitled “Areas for Improvement”, Woodbury stated:
Alignment /Partner Management - Slower than desired in aligning with EM expectations, objectives and stewardship basis. Owners driving SOEI direction in many areas as opposed to preferred EM leadership resulting in conflict.
[11] Brannan testified that when he initially joined SOEI, Paul Bennett was the Chair of the Board of Directors and of the Management Committee, during the period of 1998 - 99, until he was replaced by Mr. Miller in December 1999. During the periods Brannan reported to Mr. Miller and Mr. Bennett, he said, he was encouraged to view his role as President and General Manager of SOEI as being the promotion of the interests of SOEI and of its shareholders, notwithstanding that his employer was Mobil Oil, and its representative was the Chair of both the Board of Directors and Management Committee of SOEI. He testified to being advised by Mr. Miller that he was working on behalf of all the owners, not just Mobil Oil.
[12] Brannan said that, as a consequence of the merger, the Defendant controlled an almost 60% ownership interest in SOEI, albeit it was not the shareholder, and began to embark upon a course designed to take over increasing responsibility for all aspects of SOEI’s operations. In the submission of Plaintiff’s counsel:
... The Defendant therefore embarked upon a course to take over all aspects of the Sable Project from SOEI and to run the Project in a manner that was more consistent with the Defendant’s operations around the world. This involved establishing three separate companies with functional responsibility for exploration, development and production, respectively. In addition, common services like accounting, comptrollers, procurement, public affairs, audit and legal were to be provided by Imperial Oil through its Upstream Business Services (“UBS”) division. SOEI’s responsibilities and functions were to be divided among these four companies, thus eliminating SOEI.
[13] In late 2000 Brannan expressed concerns to Mr. Miller about the changes in SOEI’s responsibilities and functions, and his role in them, and received assurances about his future with the Defendant. Mr. Miller suggested he speak to senior executives of the Defendant. In doing so, Brannan advised he would be interested in a different position, as he anticipated that the change of operatorship of SOEI, although somewhat delayed, would be effected by the Defendant in due course. He was assured by the senior executives that he was well regarded and that they would look for opportunities within EM Corp. consistent with his career objectives and goals. The only non-SOEI related offer he received occurred in August 2001, for a position in Saudi Arabia. After considering the position he declined it.
[14] By January 2001, Woodbury had replaced Mr. Miller. In doing so, he established his residence in Halifax and adopted a more “hands-on managerial style”. Brannan was required to participate in his leadership team meetings which primarily involved employees working directly for EM Corp or one of its related corporations. Brannan had significantly more contact with Woodbury than he had had with Mr. Miller. There also was more involvement by Woodbury in various aspects of SOEI operations than had previously been the case.
[15] By letter dated April 2, 2001, Woodbury advised the other shareholders:
As you are aware, ExxonMobil Canada Properties had previously expressed its desire to assume operatorship of the Sable Offshore Energy Project, with general support from the Owners. At this time, we would like to advise that we are now in a position to progress the necessary amendments required to effect the change in operatorship from SOEI to ExxonMobil.
... It is our intention to pursue closure on this initiative by May.
[16] In respect to this, the Defendant, in its post-trial submission, suggests:
... as of April 2001, Brannan had not raised any concerns about changes to his position with EM Corp. To the contrary, he had accepted any changes that had occurred and was planning his future career with EM Corp. following the change in operatorship. Despite indicating his desire for a new position within EM Corp., it was at this time that Brannan secretly began employment discussions with representatives of Pan Canadian to discuss potential employment with them. He took steps to transition out of EM Corp. For example, shortly after this discussion, on May 11, 2001, Brannan made an inquiry about the value of his CIC benefits ... .
[17] Admittedly, during this period, Brannan appears to have accepted the changes that resulted from the change in the operatorship of SOEI. The changes were not only reflected in his increased reporting to Woodbury, but also the necessity for major decisions to be communicated to and, in effect, approved by the Defendant, including in some cases, the Defendant’s Management Group in Houston, Texas. Clearly, the change in operatorship, brought about during the period following Woodbury’s replacement of Mr. Miller, had the effect of removing many of the Plaintiff’s day-to-day areas of authority and responsibility. Counsel for the Plaintiff is correct that Brannan would have seen “ ... his authority and responsibilities significantly diminish.”.
[18] Following agreement between the Defendant and the other shareholders in SOEI, Brannan was advised his position would be “Sable Operations Manager”. Brannan viewed the new position as less important, testifying that by this time, many of his responsibilities had been taken over by the Defendant.
[19] The Defendant points to the acknowledgement signed by Brannan in October 2000 that his internal position with the Defendant, “Operations Manager-Sable” did not involve any diminution of duties, suggesting he had accepted the change of operatorship of the Sable Project that followed upon the merger between Mobil Oil and Exxon Corporations. In respect to his signing off, he testified he was informed that no changes in the form were permitted, but says he was also informed by Mr. Miller that his position as President and General Manager of SOEI would continue and, as previously noted, that he should discuss his future with senior executives of the Defendant. This form, signed October 31, 2000, again acknowledged that he had no good reason to trigger the CIC Plan, and did not suggest that his position then described as “Operations Manager (Sable)” involved a diminution of duties.
[20] As the Plaintiff views the events of 2001, the Defendant effectively emasculated his position as President and General Manager of SOEI. On October 19, 2001 he wrote Woodbury outlining his opinion that his authority and responsibility as President and General Manager of SOEI had clearly been diminished “as a result of the ongoing and protracted transition from SOEI to ExxonMobil operatorship.” He viewed the eventual change of operatorship as diminishing his role and responsibility as President and General Manager as compared to before the merger between Exxon and Mobil. He noted that with the change of operatorship, the position of President and General Manager would become redundant and that the planned future position for him as “Operations Manager - Sable” was not an equivalent position. He wrote that he was seeking a position equivalent to the one he held on December 1, 1999. His communication continues:
In the event that ExxonMobil has no equivalent position available, then I will choose to discontinue my secondement (sic) to SOEI and my employment with Exxon Mobil. Additionally, in accordance with the terms of the Mobil Corporation Employee Severance Plan dated August 1999, I will be making a benefits claim for the CIC Retention/Severance package. I am open to discussions on a final employment date and would be willing to continue for a reasonable period of time in my current position until transfer of operatorship has been agreed to by the owners of SOEI but not later than November 19th.
I would appreciate your prompt attention to this matter and a response to this letter before the end of the day on November 2nd, 2001.
[21] In a letter dated November 13, 2001, addressed to Mobil Corporation, the Plaintiff repeated his position as set out in the October 19 letter to Woodbury. His letter then continued:
On October 19, 2001, I wrote to Mr. Jeff Woodbury, Eastern Canada Producing Manager for ExxonMobil, and requested that, as a result of the diminution in responsibility of my present job, that I be offered an alternate position equivalent to that which I held on December 1, 1999... . I further indicated in my letter that, if ExxonMobil did not offer me an equivalent position, I would be filing a claim for CIC benefits.
On October 30, 2001, Mr. Woodbury verbally advised me that my duties as President and General Manager of SOEI had not been diminished since Change in Control. He also said that the position of President and General Manager still existed and that, therefore, my claim for CIC benefits was denied.
[22] In his letter of November 13, re his application for CIC benefits, Brannan outlined much of the background, from his perspective:
As stated in my letter of October 19, 2001, the authority and responsibility of my current position as President and General Manager of SOEI has clearly been diminished as a result of the ongoing and protracted transition from SOEI to ExxonMobil operatorship of the six SDL’s. The current and future roles, responsibilities and authority of the SOEI President and General Manager are significantly less than before the merger between Exxon and Mobil on December 1, 1999. The position of President and General Manager has systematically diminished as more and more positions and services that used to be controlled by SOEI are now being provided by ExxonMobil or Imperial, over which I have no authority.
As President and General Manager, I was one of the three officers of SOEI and reported to the Owner Management Committee. When I accepted the position, I was instructed by Mobil in February of 1998 that I had a responsibility to represent all the owners, not just Mobil. This was the same instruction that everyone who worked at SOEI was given until December of 1999. This allowed them to put SOEI’s interests first without fear of conflict with individual owner objectives. External assessments often cited SOEI as an industry best practice for how well secondees from several owner companies worked together.
[23] After reviewing the nature of his responsibilities in the building of the organization, managing the engineering, fabrication, and installation of the project and what he viewed as the freedom and autonomy he had in carrying out these responsibilities and overseeing the creation of the project, he continued:
The freedom and autonomy described above changed after Mobil’s merger with Exxon to become ExxonMobil in December of 1999. From the very start, ExxonMobil exercised strict control over all external communications. SOEI’s and my participation in external conferences, lectures or industry committees became almost non-existent. The SOEI Well Construction department was immediately removed from SOEI and provided as a service from ExxonMobil Development Company, over which I had very little authority or control.
[24] After reviewing the history, including the decision by the Defendant to change the operatorship from SOEI to ExxonMobil, he commented that upon the arrival of Woodbury, this change in operatorship had a higher priority adding that the “... authority and importance of SOEI has been increasingly eroding over the past 11 months.” He noted that a number of key employees had left and their replacements made without the established protocol being observed of him being consulted. He acknowledged that although his “... diminished responsibilities have not yet translated into reduced compensation, this will clearly be the case in the long term.” He noted that on the assessment of November 5, 2001, Woodbury reduced his performance rating. Brannan suggested that this would have a negative impact on his compensation in the long term. He continued:
... I am strongly of the opinion that my performance ranking has been adversely affected by the fact that I am in a less important job.
[25] Perhaps more than anything else, Brannan viewed his job as having become “less important”, notwithstanding his external title may have been the same. In anticipating the Defendant would oppose his CIC benefits, on the basis he had previously accepted the position “Operations Manager-Sable” , he says he did so on the “... express representation of senior company officials that I would remain as President and General Manager of SOEI and that my duties as such would not be diminished.”
[26] In his letter of October 19 to Woodbury, Brannan had asked for a response “before the end of the day on November 2, 2001". Woodbury testified that Brannan came to his office, handed him the letter and suggested that what was said by Brannan during the meeting was fundamentally different than what was set out in the letter. Woodbury suggested Brannan was not seeking an alternative position but rather, as suggested by Plaintiff’s counsel, advised him that he had made up his mind to resign from the Defendant’s employ. Woodbury testified he indicated his personal disappointment at this turn of events and that Brannan advised him the decision to resign had not been an easy one, but in the
circumstances was the right one for him and his wife and family, and he had made up his mind. Woodbury then testified that Brannan told him “he wanted to work in a smaller organization where he could have more control over his career.” Woodbury testified that he asked Brannan to reconsider the decision over the weekend, and to call him the following Monday. Woodbury said that on the Monday, Brannan called him and advised him he had not changed his mind and was intending to resign. Woodbury testified he advised Brannan to provide him with a clear statement to this effect, in writing.
[27] Plaintiff’s counsel suggests that in assessing Woodbury’s evidence of this meeting the Court should consider the following:
I) It would make no sense for Mr. Brannan to write an obviously significant letter about his future with the Defendant in which he stated that he was looking for an equivalent alternative position in the Defendant’s employ only to then turn around and say something entirely different to Mr. Woodbury at the meeting (i.e. that he had firmly made up his mind to resign).
ii) If Mr. Brannan was resigning as Mr. Woodbury claimed, then there would be absolutely no reason for Mr. Brannan to copy the letter to Derek Owen.
iii) At no time did Mr. Woodbury dispute the contents of Mr. Brannan’s letter which, according to Mr. Woodbury, were very different from what Mr. Brannan actually said at the meeting. Indeed . . . Mr. Brannan continued to make similar statements in subsequent correspondence which were never disputed by Mr. Woodbury or anyone else on behalf of the Defendant.
[28] Not having received a response to his October 19, 2001 letter, on October 30, 2001 Brannan met again with Woodbury to further discuss his future with the Defendant. The next day he forwarded a further written communication to Woodbury:
I am writing this note to confirm our conversation at yesterday’s 5:15 Tuesday afternoon meeting in your office. In that meeting you relayed to me that after extensive review at very high levels in the organization by ExxonMobil, both in Canada and the United States, that my duties as President and General Manager of SOEI had not been diminished since Change in Control (CIC). My position as President and General Manager of SOEI still existed and that I would not be eligible for a CIC package as outlined in the Mobil Corporation Employee Severance Plan Summary and my claim for the CIC package was denied. EM legal and HR has reviewed my claim for CIC benefits and would contest any appeals. No alternative equivalent position was discussed. As far as ExxonMobil was concerned, I have not resigned my position and my employment with EM and secondment to SOEI continues. Furthermore, if I planned on leaving the employment of ExxonMobil and discontinuing my secondment to SOEI, I would need to formally give notice in writing of my plan and date to resign.
[29] Woodbury testified that Brannan wished to discuss whether there was an alternative position in view of the diminution of his duties. Woodbury responded by asking why Brannan would be discussing diminution of duties since he had already indicated he would be resigning. Brannan had agreed such a discussion would be unnecessary. Woodbury denied that he was the one that had decided Brannan did not qualify for CIC benefits and said he told Brannan he did not have the authority to make such a decision. He testified that he felt Brannan’s e-mail misrepresented the discussion, although he acknowledged he never responded in writing to “straighten out the record”.
[30] At the conclusion of the Plaintiff’s case, the Plaintiff tendered the discovery evidence of John R. Gibbs, the Human Resources Manager for Exxon Mobil Production Company, who was apparently put forward by the Defendant as its representative, with authority to speak on behalf of the Company. Counsel for the Plaintiff, in his post-trial submission, references a portion of Mr. Gibbs’ testimony and describes it as being inconsistent with Woodbury’s evidence concerning his discussions with Brannan in October 2001. The excerpt from Mr. Gibbs’ testimony is as follows:
Q. Okay, we know you spoke to John Brannan and I think you said - - was it once or twice?
A. I have a record of one conversation. I believe we spoke twice.
Q. Yeah - - go ahead, I’m sorry.
A. I believe we spoke twice.
Q. Yeah, okay, in a very short proximity, close to one another?
A. Yes.
Q. Okay, and you’ve said here you spoke to him on November 9th.
A. Uh-huh.
Q. I know that some place he refers to a conversation with you on November 5th, about four days apart. Clearly the two conversations were close to November 9?
A. Yes.
Q. Okay. Only two times you ever spoke to Mr. Brannan, prior to yesterday?
A. I believe that’s correct.
Q. Okay, and can you tell me about those conversations; what took place?
A. In the first one, as I recall, John was calling to ask about the CIC claim - -
Q. Yes.
A. - - and how that would be progressed, and it was a fairly brief conversation; and the second one, I recall that he had had conversation with Jeff Woodbury and he wanted to progress his claim for CIC benefits, and wanted to confirm the process for doing that.
Q. Yes, and do you recall what you told him?
A. I told him - - referred him to the documents that described how we should submit that claim, and then, as I recall, gave him Rod Leis’s name as the assistance administrator of the plan.
Q. Do you remember having a conversation with him, that - - about the fact that Mr. Woodbury had denied his claim for benefits?
A. I recall that he said he did have a conversation with - - with Jeff, yes.
Q. And that you had informed - - according to my instructions you informed Mr. Brannan that Mr. Woodbury, nor North American Production, did have the authority to make that decision?
A. That is correct.
Q. That was your understanding at the time?
A. Yes.
Q. That was not within Mr. Woodbury’s purview, or anyone else in production?
A. That’s correct. (line 1, p. 25 - line 24, p. 26)
[31] The excerpt submitted by counsel for the Plaintiff goes on to refer to Mr. Gibb’s discussion with Woodbury:
Q. You did speak to Mr. Woodbury?
A. Yes, I did.
Q. What did he tell you?
A. He told me that John had expressed interest in filing for a CIC. He told me that in his view, he didn’t believe that John was eligible. I told Jeff that that was not a decision he could make, and that John should be allowed to proceed with filing of a claim.
Q. Did he acknowledge to you; that is, did Jeff Woodbury acknowledge to you that he’d already told Brannan the claim was denied?
A. He did not. I don’t recall that he said those words. That was certainly his view.
Q. You’ve probably seen Mr. Brannan, in reviewing those documents, you’ve seen Mr. Brannan’s e-mail to Mr. Woodbury relating that conversation - -
A. Yes.
Q. - - and asking Mr. Woodbury for confirmation.
A. Yes, I did see that.
Q. And you’re aware that Mr. Woodbury never responded and never provided the information which Mr. Brannan - -
A. I was not aware of that until I read John’s note.
Q. Okay. Do you have any explanations as to why Mr. Woodbury wouldn’t have responded?
A. No I don’t. (line 14, p. 45 to line 14, p. 46)
[32] Counsel for the Plaintiff makes the following submissions with respect to assessing Woodbury’s testimony:
I) If Mr. Brannan had indicated that he made up his mind to resign back on October 19, 2001, why would he continue to discuss the diminishment of his duties and express an interest in obtaining an alternative equivalent position within the Defendant’s employ on October 30th?
ii) How would Mr. Gibbs or anyone in HR have expressed the view that Mr. Brannan did not quality for CIC benefits in October, 2001, when Mr. Brannan did not actually file his claim until November 13, 2001 ...
iii) How would Mr. Brannan independently come up with the notion that ‘EM legal and HR [had] reviewed [his] claim for CIC benefits and would contest any appeals’ unless Mr. Woodbury told him this? We know from Mr. Gibbs’ discovery evidence that he had spoken to Mr. Woodbury about Mr. Brannan’s potential claim for CIC benefits. However, we also know that Mr. Gibbs did not have any opinion as to whether or not Mr. Brannan qualified for CIC benefits and also cautioned Mr. Woodbury against expressing the opinion Mr. Woodbury held that Mr. Brannan did not qualify for CIC benefits. Rather, Mr. Gibbs advised Mr. Woodbury that Mr. Brannan should be allowed to file a claim and go through the prescribed claim process. Thus, in our submission, the only reasonable conclusion one can draw is that Mr. Woodbury misrepresented the conversation he had with Mr. Gibbs to Mr. Brannan about EM legal and HR contesting any appeals in an effort to discourage Mr. Brannan from availing himself of his right to submit a claim.
iv) Mr. Brannan began his e-mail with the line, ‘I am writing this note to confirm our conversation at yesterday’s 5:15 Tuesday afternoon meeting in your office’. If, as Mr. Woodbury claims, much of Mr. Brannan’s e-mail ‘came out of left field’, why did Mr. Woodbury not respond to the e-mail and take issue with its contents?
The only thing Mr. Woodbury claimed to have done in response to the e-mail was to telephone Mr. Brannan and state that [sic] did not understand why Mr. Brannan wrote what he did because it was not what they discussed during the meeting of October 30th. According to Mr. Woodbury, Mr. Brannan became uncomfortable and quickly changed the subject of conversation to the filing of his CIC claim.
Mr. Brannan, however, denied that any such telephone conversation occurred. We submit that, in light of his ‘confirmatory e-mail’, if Mr. Woodbury did indeed believe that Mr. Brannan was mischaracterizing their conversation, any reasonable person would have responded to that e-mail in writing. Again, it is important to note that Mr. Brannan’s e-mail of October 31st contained many of the same points he made in his letter of October 19th in which he requested an alternative position with the Defendant as opposed to resigning as claimed by Mr. Woodbury.
Manifestly, on any reasonable assessment, Mr. Brannan’s version of what transpired during the October 30th meeting must be accepted. Contrary to Mr. Woodbury’s testimony, he told Mr. Brannan that he had concluded that Mr. Brannan did not qualify for CIC Benefits and he did not attribute that decision to Mr. Gibbs or people in HR. Indeed, as appears from Mr. Gibbs’s evidence, he never expressed any opinion on the issue of Mr. Brannan’s entitlement to CIC benefits. Furthermore, when Mr. Woodbury expressed the view that Mr. Brannan should not receive CIC Benefits, Mr. Gibbs specifically told Mr. Woodbury that was not his decision to make and that Mr. Brannan should be allowed to proceed with filing his claim.
[33] In respect of the meetings and correspondence between Woodbury and Brannan in October 2000, I am satisfied that where there are contradictions and inconsistencies, I prefer the evidence of Brannan over that of Woodbury to the extent relevant in the determination of the issues. It is inconceivable that if Woodbury found in the written communications distortions, fabrications, or misconceptions of what occurred, that he would not have immediately communicated in writing his recollection of what had occurred. He did not do so. The only reasonable explanation is that Brannan had accurately summarized the nature and content of the discussion and Woodbury took no exception. Considering the discussions were allegedly about Brannan’s position and how he viewed it, it is inconceivable that Woodbury would not have sought, in writing, to set him straight as to what the position of the Defendant was, and any options that were being made available to Brannan.
[34] By letter dated November 16, 2001, Brannan further wrote to Woodbury, referencing his letter of October 19:
In my letter, I had requested that, as a result of the diminution in responsibility of my present job, I be offered an alternate position equivalent to that which I held on December 1, 1999. I further indicated in my letter that, if ExxonMobil did not offer me an equivalent position, I would be filing a claim for CIC benefits and leaving the company.
On October 30, 2001, you verbally advised me that my duties as President and General Manager of SOEI had not been diminished subsequent to December 1, 1999 and that, since my position as President and General Manager still existed, my claim for CIC benefits was denied. You did not offer me any alternate position with ExxonMobil.
As you know, I completely disagree with your conclusion that my position as President and General Manager of SOEI has not been diminished since December 1, 1999. Accordingly, in view of the fact that no offer of an alternative equivalent position has been forthcoming, I have filed a claim for CIC benefits which is currently in the hands of the Plan Administrator.
Signing the Operatorship Agreements today will be one of my last official acts as President and General Manager of SOEI. Execution of these agreements officially makes my position as President and General Manager of SOEI redundant. Under the circumstances, I do not intend to continue my employment with ExxonMobil in a lesser position and hereby tender my resignation effective November 23, 2001. This is a four-day extension to my original departure date in an effort to comply with your request to make for a smoother transition.
[35] The Defendant, in its written submission, says Brannan had accepted the changes that had occurred and was planning his future career with the EM Corp., following the change in operatorship. The submission continues:
... Despite indicating his desire for a new position with EM Corp., it was at this time that Brannan secretly began employment discussions with representatives of Pan Canadian to discuss potential employment with them. He took steps to transition out of EM Corp. For example, shortly after this discussion, on May 11, 2001, Brannan made an inquiry about the value of his CIC benefits ...
[36] The Defendant then states:
As of August/September 2001, still unknown to EM Corp., Brannan continued negotiations with Pan Canadian regarding employment opportunities with them. He received a job offer from Pan Canadian on September 4, 2001 and a “final offer” on September 10, 2001. Clearly by this stage Brannan had decided to leave EM Corp. and accept employment with Pan Canadian. A second final offer was made by Pan Canadian on October 26, 2001. The time frame for accepting this offer was extended to facilitate acceptance following change in operatorship. Brannan formally accepted the employment offer from Pan Canadian on November 16, 2001, immediately after he signed the change in operatorship documents. However, the documents merely put the change in escrow; the actual change in operatorship did not occur until February 2002.
[37] The Defendant suggests that by the time Brannan wrote his letter of October 19, 2001, he had effectively accepted a position with Pan Canadian. Counsel refers to the evidence of Woodbury that when he met with Brannan on October 19, 2001, Brannan told him that he and his wife, after a long deliberation, had decided to leave and that Woodbury responded by suggesting he reconsider his position. Woodbury said Brannan agreed to consider his decision over the weekend, and on the following Monday re-affirmed his decision to leave.
[38] Defence counsel takes issue with the submission of the Plaintiff in respect to a number of matters. Among these is the timing of Brannan’s appointment as President and General Manager of SOEI; while he was initially offered the position of General Manager he only later received the designation of President. Also, it is claimed, the reference by Plaintiff’s counsel to Mobil Oil Canada as his employer was incorrect, in that during the whole period he was an employee of Mobil Offshore Services Inc., which became Exxon Mobil Corporation after the merger. Other errors, as suggested by Defence counsel, relate to the extent to which Brannan was involved in the initial building of SOEI, having regard to the uncontradicted testimony of Mr. Miller that many parts of the project were completed prior to Brannan’s arrival.
[39] These and other alleged errors are of little consequence in the determination of the central issue of whether Brannan was constructively dismissed by the Defendant. Relevant, however, is the submission by Defence counsel that prior to advising the Defendants of his intention to leave, Brannan had been in negotiations with other potential employers. Also relevant is the suggestion by counsel that the position he was offered was not a new position, since he had already signed off on that position “almost two years previously”. Counsel suggests the only person who believed the position was a demotion was Brannan. He submits that the senior executives of the Defendant continued to view the position as important, and Brannan was viewed as a valued employee. Counsel’s submission is that this is confirmed by the fact his successor was appointed to the same position he had held, and received the same grade level within the corporation.
[40] Effectively counsel is suggesting Brannan began looking for other employment opportunities before he advised the Defendant he was demanding a suitable alternative position by November 2, 2001. Counsel’s submission continues:
... Further, there was no evidence that Brannan looked for employment opportunities throughout the oil and gas industry. He looked only for opportunities at Pan Canadian. EM Corp. says that Pan Canadian met his two major criteria for a new employer. First, he wanted to be in a leadership position at a smaller company. Second, he wanted to stay in Canada.
[41] In reference to the Plaintiff’s suggestion that it was not until the Defendant failed to offer him a suitable position that he accepted the offer from Pan Canadian, counsel for the Defendant says Brannan had decided to accept that position well before November 16, 2001. Counsel adds, “Pan Canadian fully expected him to accept the offer of employment”.
ISSUES
[42] Damages are not in issue. The parties have agreed on the quantum of damages, in the event the Plaintiff is successful in respect of the two outstanding issues.
[43] The outstanding issues are: (1) Was Brannan constructively dismissed by the Defendant? (2) If Brannan was constructively dismissed, has he failed to mitigate his damages?
LAW AND ANALYSIS
[44] The Supreme Court of Canada addressed many of the principles involved in assessing whether there has been a constructive dismissal in Farber v. Royal Trust Company, [1996] S.C.J. No. 118. Although the case was decided under the Quebec Civil Code, there appears to be no dispute that the principles are universal. At paras. 24-27, Justice Gonthier observed:
Where an employer decides unilaterally to make substantial changes to the essential terms of an employee’s contract of employment and the employee does not agree to the changes and leaves his or her job, the employee has not resigned, but has been dismissed. Since the employer has not formally dismissed the employee, this is referred to as “constructive dismissal.” By unilaterally seeking to make substantial changes to the essential terms of the employment contract, the employer is ceasing to meet its obligations and is therefore terminating the contract. The employee can then treat the contract as resiliated for breach and can leave. In such circumstances, the employee is entitled to compensation in lieu of notice and, where appropriate, damages.
On the other hand, an employer can make any changes to an employee’s position that are allowed by the contract, inter alia as part of the employer’s managerial authority. Such changes to the employee’s position will not be changes to the employment contract, but rather applications thereof. The extent of the employer’s discretion to make changes will depend on what the parties agreed when they entered into the contract. R.P. Gagnon made the following comment on this point in Le droit du travial du Québec: pratiques et théories (3rd ed.1996), at p. 66:
[Translation] Moreover, to what extent can the employer change the nature of the employee’s work or the employer’s duties and responsibilities? This issue is increasingly important, inter alia because it is often an essential consideration for employees in their employment that they be able to do the job for which they were hired, given both the satisfaction they legitimately wish to derive from it and their concern to maintain and develop their qualifications and skills in their field of work. The answer takes into account the form of and circumstances surrounding the hiring of the employee and thus how much discretion the employer explicitly or implicitly has to exercise managerial authority in this regard. [Citation omitted.]
To reach the conclusion that an employee has been constructively dismissed, the court must therefore determine whether the unilateral changes imposed by the employer substantially altered the essential terms of the employee’s contract of employment. For this purpose, the judge must ask whether, at the time the offer was made, a reasonable person in the same situation as the employee would have felt that the essential terms of the employment contract were being substantially changed. The fact that the employee may have been prepared to accept some of the changes is not conclusive, because there might be other reasons for the employee’s willingness to accept less than what he or she was entitled to have.
Moreover, for the employment contract to be resiliated, it is not necessary for the employer to have intended to force the employee to leave his or her employment or to have been acting in bad faith when making substantial changes to the contract’s essential terms. However, if the employer was acting in bad faith, this would have an impact on the damages awarded to the employee. In the case at bar, there is no question of bad faith by the respondent, which was acting in good faith in reorganizing its hierarchical structure. Thus, the only damages in issue are those of that would be awarded in lieu of notice.
[45] Recognizing that Quebec Civil Law “...is a complete system in itself” and that “...care must be taken not to adopt principles from other legal systems”, Justice Gonthier, at para. 30, noted that in Lavigne v. Sidbec-Dosco Inc. [1985] C.S. 26 aff’d C.A. Mtl., No. 500-09-001556-844, May 4, 1988, Hannan J. at p. 28 observed:
Caution must be exercised in adopting unreservedly common-law concepts of contract into cases arising under the Civil law, except where there is useful necessity and authoritative precedent. However, in the case of lease and hire of personal services, in Quebec, the doctrine of constructive dismissal has been recognized.
[46] Similarly, observations by the Supreme Court about the application to the Quebec Civil Code of common law concepts deserve, and require, great weight in considering these concepts in non-civil law jurisdictions.
[47] Justice Gonthier proceeded to consider the constructive dismissal concept as it has developed in the Canadian common law provinces. At paras. 33-36 he said:
In cases of constructive dismissal, the courts in the common law provinces have applied the general principle that where one party to a contract demonstrates an intention no longer to be bound by it, that party is committing a fundamental breach of the contract that results in its termination. The leading case on this question is an English decision, In re Rubel Bronze and Metal Co. And Vos, [1918] 1 K.B. 315, in which the following was stated at pp. 321-22:
But if a claim for wrongful dismissal be founded on repudiation by the master, then I think that the general and recognized rules which apply in the case of ordinary contracts should apply also in the case of master and servant. ... It has been authoritatively stated that the question to be asked in cases of alleged repudiation is ‘whether the acts and conduct of the party evince an intention no longer to be bound by the contract’. ... The doctrine of repudiation must of course be applied in a just and reasonable manner. A dispute as to one or several minor provisions in an elaborate contract or a refusal to act upon what is subsequently held to be the proper interpretation of such provisions should not, as a rule, be deemed to amount to repudiation. ... But ... a deliberate breach of a single provision of a contract may, under special circumstances, and particularly if the provision be important, amount to a repudiation of the whole bargain. ...
Thus, it has been established in a number of Canadian common law decisions that where an employer unilaterally makes a fundamental or substantial change to an employee’s contract of employment - - a change that violates the contract’s terms - - the employer is committing a fundamental breach of the contract that results in its termination and entitles the employee to consider himself or herself constructively dismissed. The employee can then claim damages from the employer in lieu of reasonable notice. [Referenced authorities omitted.]
In an article entitled “Constructive Dismissal”, in B. D. Bruce, ed., Work, Unemployment and Justice (1994), 127, Justice N. W. Sherstobitoff of the Saskatchewan Court of Appeal defined the concept of constructive dismissal as follows at p. 129:
A constructive dismissal occurs when an employer makes a unilateral and fundamental change to a term or condition of an employment contract without providing reasonable notice of that change to the employee. Such action amounts to a repudiation of the contract of employment by the employer whether or not he intended to continue the employment relationship. Therefore, the employee can treat the contract as wrongfully terminated and resign which, in turn, gives rise to an obligation on the employer’s part to provide damages in lieu of reasonable notice.
The common law rule is therefore similar to that applicable in Quebec civil law when it comes to the concept of constructive dismissal. Thus, although decisions from the common law provinces are not authoritative, it may be helpful to refer to them to see what types of changes the courts have considered fundamental changes to an employment contract resulting in the termination of that contract. However, each constructive dismissal case must be decided on its own facts, since the specific features of each employment contract and each situation must be taken into account to determine whether the essential terms of the contract have been substantially changed.
In a number of decisions in both Quebec and the common law provinces, it has been held that a demotion, which generally means less prestige and status, is a substantial change to the essential terms of an employment contract that warrants a finding that the employee has been constructively dismissed. In some decisions, it has been held that a unilateral change to the method of calculating an employee’s remuneration justifies the same finding. Other decisions have found that a significant reduction in an employee’s income by an employer amounts to constructive dismissal. [Referenced authorities omitted.]
[48] The test for determining whether an employee has been constructively dismissed is an objective one and essentially a question of fact. The Court must decide whether, on a reasonable interpretation of the facts, the employee has established he was constructively dismissed as a result of conduct by the employer, in that the employer has breached a fundamental or essential term of the employment contract. The employee’s perception of the employer’s conduct is not determinative. Rather, the Court must ask whether a reasonable person, in a similar position to the employee, would have concluded the employer had substantially changed an essential term of the employment contract: Lane v. Carsen Group Inc., 2002 NSSC 218 (N.S.S.C.); Miller v. Fetterly & Associates Inc. (1999), 177 N.S.R. (2d) 44 (N.S.S.C.).
[49] In Wrongful Dismissal, by David Harris, (Thomson Canada Ltd., 1989, Volume I) the author outlines requirements for constructive dismissal at p. 3-18.3:
An employer may constructively dismiss an employee (whether or not it intends this result) by unilaterally changing a basic term or condition of employment. The burden is on the employee to prove that the term or condition was (a) part of the employment contract; and (b) fundamental to it. The loss of an employment ‘perk’ or perquisite, or the elimination of an important area of responsibility may give rise to constructive dismissal; a negative critique of job performance probably does not ... .
The Terms of His Employment
[50] Counsel for the Defendant suggests the terms of Brannan’s employment remained constant throughout the relevant period, in that he was seconded pursuant to his Secondment Agreement by Mobil Oil Canada Properties to SOEI on what was understood, by both parties, to be a temporary secondment. It appears, as earlier noted, that Brannan had in fact been seconded to Mobil Oil Canada from Mobil Oil Overseas Services Inc. In reality, Brannan was an employee of Mobil Oil Offshore Services Inc., a related corporation to the Defendant. The Plaintiff, in its various submissions, does not appear, for purposes of this proceeding, to distinguish between the various related corporations and the Defendant. The Defendant’s post-trial submissions suggest that none of the terms and conditions of the secondment agreement were breached and that there was no evidence at trial to support any material change in the terms of his employment. Also noted is that Brannan’s remuneration progressively increased during the period, including both salary and options arising out of the merger creating the Defendant. In the submission of counsel there were no negative changes made by the Defendant to Brannan’s compensation package during the relevant period.
[51] With respect to the changes that were made, counsel for the Defendant, in summarizing his position, submits:
The terms and conditions of Brannan’s employment with EM Corp. remained constant. Brannan’s complaints relate to concerns he had with his temporary assignment to SOEI. EM Corp. says that such changes were outside its control and do not constitute changes to the terms and conditions of Brannan’s employment with it.
[52] The position of the Plaintiff as to the effect of the steps taken on his future remuneration are reflected in his letter of November 13, 2001, addressed to Mobil Corporation, Attention: Manager, Global Benefits, outlining the background to his claim for benefits under the Mobil Corporation Employee Severance Plan, the CIC. He stated:
While my diminished responsibilities have not yet translated into reduced compensation, this will clearly be the case in the long term. With Mobil, I was in the Global Leadership Development Program which meant that I was rated among the top 20% in performance and recognized to have the potential for several salary grade increases. On November 5, 2001, Mr. Woodbury advised me that my performance rating was in the middle third which will undoubtedly have a negative impact on my total compensation package, including my long term incentive compensation, and future career potential. I am strongly of the opinion that my performance ranking has been adversely affected by the fact that I am in a less important job.
Were there material and substantial changes made to the fundamental terms and conditions of Brannan’s employment?
[53] Brannan was initially offered the position of General Manager of SOEI, and, shortly after that, the combined position of President and General Manager. As such he was the senior officer responsible for SOEI’s operations, reporting to the Management Committee and the Board of Directors. The issue is not the form but the substance of his position. The Defendant suggests his position and compensation were not changed and consequently there is no basis to claim constructive dismissal, whether by SOEI or by the Defendant. The Plaintiff submits, on the other hand, that his role and responsibilities were materially changed as a result of the Defendant’s decision to assign many day-to-day operations of SOEI to departments or divisions within the Defendant corporation.
[54] The Defendant says there was no diminution in Brannan’s duties, only a reorganization of the manner in which certain services were provided following the merger. Counsel’s submission continues:
... these changes did not affect Brannan’s overall responsibilities as described in the Secondment Agreement or otherwise; Brannan still retained overall responsibility for the day-to-day operations of SOEI at all times during his secondment at SOEI which he confirmed in his testimony.
[55] Counsel also submits that Brannan took no exception to these changes until he began negotiations with Pan Canadian. Effectively, counsel is suggesting, it was the opportunity with Pan Canadian that caused Brannan to regard the changes as effecting a diminution in his duties, and consequently provided a basis for his claim for constructive dismissal and CIC Benefits.
[56] The diminution of authority and duties is reviewed by Plaintiff’s counsel at some length in his post-hearing submission. He details what he suggests are the various diminutions of “authority and responsibility” from Brannan as President and General Manager of SOEI.
(A) The Pressure to Advance the Defendant’s Agenda
[57] In his letter of November 13, 2001, Brannan stated that when he accepted the position he had been instructed that his responsibility was to all the owners and not just to Mobil. Counsel says that, on the evidence, following the merger Brannan was expected and pressured by the Defendant “...to put its interest and objectives ahead of the other owners’ interests and objectives”. Counsel notes that when Brannan resisted there were two instances of his being penalized as a consequence:
I Performance Assessment Report
[58] In the Performance Assessment Report, counsel for the Plaintiff suggests, Woodbury was critical in noting under AREAS FOR IMPROVEMENT, that the Plaintiff was “Slower than desired in aligning with EM expectations, objectives and stewardship basis. Owners driving SOEI direction in many areas as opposed to preferred EM leadership resulting in conflict”. Counsel notes that as a result of Woodbury’s Performance Assessment, Brannan’s comparative percentage ranking dropped significantly.
II Comments by Exxon Mobil Executive
[59] Brannan testified to overhearing a conversation by a senior manager of the Defendant to the effect that, “if we are paying 60% of the bill, we are going to operate this facility and we are damn sure not going to let Shell tell us how to run it”. Brannan was unable to identify who among three possibilities was the senior executive who made the comment. In his letter of November 13th he referred to this statement, adding that it was a sentiment that “...was repeated several times as various high level ExxonMobil managers visited SOEI in the first quarter of 2000."
[60] Brannan also testified to an incident when one of two persons he identified as senior executives of the Defendant made the comment “Son, you are the President and General Manager of SOEI for one reason only...that is to represent Exxon Mobil.”
[61] In response the Defendant asserts the evidence does not support the Plaintiff’s contention that Brannan was pressured “...to put EM Corp.’s interests and objectives ahead of the other owner’s interests and objectives.”
[62] Defence counsel repeats that the Defendant was not a shareholder in SOEI and did not participate in the SOEI decision-making process. One does not follow from the other. Although the Defendant was not a shareholder, it is clear and uncontradicted that the Defendant was calling the shots on behalf of the related corporation that did hold the shares in SOEI. Although counsel correctly states that these statements were hearsay - in his submission he says they “...are unreliable hearsay and should be disregarded” - they nevertheless reflect what Brannan believed, regardless of whether the statements themselves accurately reflected the Defendant’s policies or intentions. There are also sufficient other indicia in the evidence, particularly the comments made by Woodbury in his performance assessment, that suggest a change in direction by the Defendant as to its expectations as to how SOEI would operate. Despite the denial by Woodbury and Mr. Miller of any pressure by the Defendant on SOEI, the evidence is clear that such pressure existed and is reflected in the steps taken, particularly by Woodbury, in effecting the change of operatorship. Although the other shareholders agreed, this was a direction initiated and pursued by the Defendant, whether directly or through its sister corporations that held the shares in SOEI; of this, there is no doubt.
(B) Control over External Communications
[63] Plaintiff’s counsel reviews a number of incidents where he says that following the merger the Defendant exercised control over external communications, including interviews and participation in lectures and conferences. The submission of the Defendant is that there were only two examples where such control over external communications occurred, both in 2000, and that at the time Brannan raised no issue. In the submission of counsel “he condoned this activity”.
[64] In respect to participating in conferences, I am not satisfied this reflects any material change or diminution in the Plaintiff’s duties or responsibilities as to support a claim for constructive dismissal. As the Defendant suggests, “it would be a stretch to say that the right to speak at conferences is a fundamental term and condition of Brannan’s employment”. I concur with counsel’s submission that this is irrelevant to the fundamental issue in this case.
(C) Removal of the Well Construction Department
[65] In his letter of November 13, 2001, Brannan referred to the removal from SOEI of the well construction department. He testified that construction services formerly carried out by SOEI were contracted out to Mobil Canada Properties, a company, he says, is controlled by the Defendant.
[66] In response, Defendant’s counsel suggests the steps taken by SOEI were based on “business effectiveness”. Counsel notes that prior to the merger SOEI had sought assistance from Mobil’s global organization for well construction. However, it has also been acknowledged by Defendant’s counsel that following the merger, there was a Service Agreement that provided for drilling services to be provided by the Defendant. Clearly, there was a change, and a substantial one. Seeking assistance when required is a far cry from contracting out the service itself. Although the individual who had been working in SOEI and reporting to Brannan had been removed, he functioned within the umbrella of the Defendant’s corporations and continued to be available to Brannan. However, the relationship had obviously changed. To suggest that Brannan never lost responsibility for this group belies the evidence as to what took place.
(D) Altered Lines of Responsibility
[67] In his letter of November 13, 2001, Brannan outlined the change in his areas of responsibility brought about by the decision of the Defendants to put in place a functional model consistent with how it operated around the world.
[68] Plaintiff’s counsel refers to a number of changes that were implemented, particularly relating to individuals who had been seconded to SOEI, but who were recalled by their employers and either replaced by a Defendant’s secondee or not replaced at all. In some instances, the secondee returned to the Defendant but provided services to SOEI through the Defendant rather than in a direct reporting line to Brannan. The Defendant suggests these were changes designed to “...improve efficiencies and effectiveness by utilizing capabilities of the major shareholder”. The Defendant refers to an audit conducted in 2000 that Woodbury suggested had “an unacceptable outcome”. The Defendant also says, that many of the changes were condoned by Brannan and that in some instances he continued to have responsibility. However, Brannan testified that although he had responsibility, he had no authority to carry out that responsibility, as the service involved had been contracted out, primarily to the Defendant.
[69] However the Defendant may wish to characterize the changes, the effect was that services that had been performed by SOEI were being contracted out, primarily to the Defendant or one of its sister or related corporations. The evidence is indisputable; the effect on SOEI undeniable.
(E) Woodbury’s Hands-on Approach
[70] In his letter of November 13th, Brannan commented that Woodbury filled many of the staff positions within the SOEI organization, in his position as Production Manager for Eastern Canada. The Plaintiff, in his submission, acknowledges that changes had taken place prior to the arrival of Woodbury. However, counsel adds, “the pace and magnitude of change increased when he arrived on the scene”. He noted a number of examples, including the direction by Woodbury that Brannan was to attend Woodbury’s weekly Production Leadership Team meetings. Woodbury testified that the only persons who attended these meetings were persons who reported to him. Brannan indicated he was required to attend, even though at the time he was a full-time secondee to SOEI. Plaintiff’s counsel refers to dealings with the regulators and says the role of Brannan changed in this regard, in that Woodbury had “actively taken over regulatory responsibility for SOEI”, even prior to Brannan’s departure.
[71] In response the Defendant says these meetings actually started prior to Woodbury’s arrival and that, “...they were part of Brannan’s responsibility as an Executive with EM Corp”. The submission continues:
... With respect to these meetings, Jeff Woodbury testified that these meetings happened on a weekly basis and were designed to ensure that SOEI and other EM Canada projects on the east coast were using best practices. The members of these meetings included all of Jeff Woodbury’s direct reports.
[72] The Plaintiff’s submission in respect to the issue of Woodbury’s management style suggests that Woodbury was actively pursuing an agenda to take over operatorship of SOEI and in fact was treating SOEI as if it was already under the control of the Defendant. The Defendant suggests that these matters are taken out of context. However, it is clear that taken as a whole the evidence suggests the Defendant was effecting its’ purpose of restructuring SOEI into a functional model consistent with how the Defendant operated around the world.
(F) Brannan Well-regarded
[73] Plaintiff’s counsel refers to a number of statements by Woodbury, to the effect that Brannan was a well-regarded Executive in the Exxon Mobil organization. Initially, Mr. Miller testified that if he had left SOEI “we would have found him a position which would have been equivalent to President or General Manager or something higher”. The expectation was that Brannan would go on to bigger and better things. Plaintiff’s counsel suggests however, that, “the evidence tells a different story”. He refers to Woodbury’s reduction of Brannan’s ranking, during the April, 2001 assessment and the fact that, despite statements to the effect that he would be offered a better position, no such offer ever materialized. Brannan received two offers, the first being in Saudi Arabia and the second as Sable Operations Manager. In respect to the offer in Saudi Arabia counsel submits:
...After carefully considering the position, he declined it for the following reasons:
I) He had 4 school-aged children. According to his information, Saudi schools did not admit expatriate children after Grade 9. This meant that his two oldest sons would have to be sent to a boarding school in Sweden. (While Mr. Woodbury testified that this policy changed in 2000, he never advised Mr. Brannan of the change.
ii) He had concerns about the viability of the Saudi Project. As it turned out, his concerns were well-founded and the project never did go forward.
iii) He had concerns about the security of his family living in the Middle East.
iv) He was advised by Terry McPhail that the Saudi position was not a promotion.
The fact that the only position offered by the Defendant to Mr. Brannan in the 9 months following his conversation with Mr. Sikkel and Mr. Scoggins in November, 2000 was a position in Saudi Arabia which ultimately never got off the ground is, in our submission, very telling about how well-regarded Mr. Brannan was by the Defendant and his future prospects within the organization. Surely if, as the Defendant’s representatives claimed, Mr. Brannan was well-regarded and in line for bigger and better things, the Defendant would have presented him with a more significant opportunity consistent with his desire for advancement. Instead, in April 2001, Mr. Brannan’s status was downgraded in the organization due to Mr. Woodbury’s Performance Assessment and the decision of the ranking committee on which Mr. Sikkel sat.
[74] Mr. Sikkel and Mr. Scoggins were the Senior Executives in the defendant that Mr. Miller had suggested Brannan talk to about his future when he signed the form in October, 2000 agreeing that there had been no diminution in his authority and responsibilities and at which time Brannan was raising questions as to his future with the defendant.
[75] In respect to the position of Sable Operations Manager, counsel’s submission continues:
The only other position offered by the Defendant to Mr. Brannan was that of Sable Operations Manager. At trial, even the Defendant’s representatives acknowledged that this was not the bigger and better position that was supposed to be offered to Mr. Brannan concurrent with the change of operatorship. For example, as noted earlier, Mr. Woodbury testified that it was important to move Mr. Brannan to a ‘new position’ with the change in operatorship which was to be a better opportunity ‘than Chris Ford’s job’ (i.e. Sable Operations Manager). When one considers that the Defendant had been contemplating the change in operatorship for nearly two years, and had thought that this change would occur by May, 2001 (Exhibit 1, Tab 27), the Defendant clearly had more than adequate time to identify the career advancement opportunities that its representatives testified would have been forthcoming if Mr. Brannan had remained employed with the Defendant. In our submission, the fact that no such opportunities materialized validates Mr. Brannan’s view that his career potential with the Defendant was limited and that, after 20 years, it was time for him to move on.
[76] In respect to the reduced ranking by Woodbury, defence counsel suggests the ranking related to a different group, in that it encompassed the merged corporation, rather than simply a ranking within Mobil. Nevertheless, I am satisfied that a reduction in ranking is a reduction in ranking, since it rates the individual as against a total group; or it may mean the Executives joining the group from Exxon Corporation deserved higher ranking than those from Mobil, a suggestion neither made by Woodbury nor by Brannan during the course of the trial. The Defendant repeats the evidence of a number of witnesses who testified that there would be bigger and better things for Brannan, following the change in operatorship. The suggestion, in effect, is that if he would only have remained patient he would have realized the “benefit”. With respect to the Saudi Arabia position, counsel suggests the project was given high priority within the company, even though it ultimately did not go ahead. As to the Sable Operations Manager position, Defence counsel notes this was offered in 1999, rather than 2001, and Brannan had indicated his acceptance by remaining an employee and signing documents confirming the same. Counsel suggest that Brannan is confusing his “internal title with his external title”.
(G) Employer’s Rights
[77] The Defendant references the oft-cited comments of Justice Blair in Shillington v. Quebecor Inc., [1991] O.J. No. 1398 (Ont. C.J.):
What is the obligation of an employee to accept a new assignment by his or her employer?
It has been held that an employee may be required to accept reassignment and may be discharged for refusing to do so. Whether this is so depends upon the nature of the reassignment and whether the employer is acting bona fide and for a reasonable business objective. If the employer is pursuing a legitimate business objective and is not acting in a manner which is simply a disguise for dismissal, and if the new assignment does not constitute a fundamental change or variation in the terms of employment, an employee may reasonably be required to accept the new task. As Dubin J.A. said, in Canadian Bechtel Ltd. v. Mollenkopf (1978), 1 C.C.E.L. 95 (Ont. H.C.J.), at p. 98:
... The plaintiff had no vested right in the particular job initially given to him. If the employer, ... acted in good faith and in the protection of its own business interests, the plaintiff would have had no right to refuse the transfer.
...
Even a demotion involving some loss of prestige and position may not, in itself, be sufficient to justify the employee in declining to accept the re-assignment: Reber v. Lloyds Bank International Canada (1985), 7 C.C.E.L. 98 (B.C.C.A.) at pp. 108-9; Cox v. Royal Trust Corp. of Canada, supra. It is a question of fact in each case.
[78] In Shillington, Justice Blair conducted a careful comparison of the Plaintiff’s former position and the new position he was offered. He concluded that the proposed reassignment did not constitute a demotion or carry with it any loss of prestige. He noted that it offered the same remuneration, and direct reporting to a higher level in the corporate “management”. He continued
In short, the new position which was offered did not constitute the sort of significant change or variation in the nature of the Plaintiff’s relationship with his employer that would amount to a fundamental breach of his employment contract.
Nor do I think that Mr. Shillington, himself, viewed the proposed re-assignment as a demotion.
[79] Defence counsel references a number of cases including Reber v. Lloyds Bank International Canada, [1985] BCJ No. 2341,(BCCA); Jervis v. Raytheon Canada Ltd.,[1990 O.J. No. 1748 (Ont. HCJ), appeal dismissed [1979] O.J. No. 38 (Ont. C.A.); Poulos v. Murphy Oil Co., [1990] A.J. No. 625 (Alt. Q.B.); Black v. Second Cup Ltd., [1995] O.J. No. 75 (Ont. Gen. Div.); Mate v. Laidlaw Environment Services Ltd., [1996] BCJ No. 199 (BCSC); Cruickshank v. Jordan Petroleum Ltd., [1999] A.J. No. 767 (Alt. Q.B.), as instances where changes were initiated by the employer, including a transfer in the case of Reber, removal of the employee from the project in the case of Jervis, the appointment of a new President in the case of Pullen, and reorganizations in the cases of Black and Mate.
[80] Counsel suggests that Cruickshank is particularly relevant to the present circumstances. The employer was taken over, and the issue was whether the Plaintiff’s position as comptroller prior to the take-over was comparable to his post-takeover position. The court considered whether the positions were substantially equivalent or whether the essential terms and duties of the employment contract had changed. The court held that the changes in his position, taken collectively, did not permit the Plaintiff to argue successfully that the positions pre-post -takeover, were not substantially equivalent in the circumstances. The claim therefore failed.
[81] None of the these cases are equivalent to Brannan’s circumstances. Within SOEI, the only changes effected were the diminution of his authority and responsibility, even though he maintained the same level of compensation. In fact, due to increases over time, his compensation had increased.
(H) Did Brannan Condone the Changes?
[82] The Defendant says that even if the alleged changes were made, they were “...implicitly and explicitly accepted by Brannan”. Counsel refers to Langley v. G.H. Wood & Wyant Inc. (1998), 164 N.S.R. (2d) 54 (S.C.). In Langley, Justice Cacchione found that the Plaintiff had accepted the employment contract and had neither refused the new position nor voiced displeasure with it. The continued acceptance of the new position constituted a “condonation” of the change in the employment contract. He observed, at para 23, that “an employee’s duties are not frozen when the job description is prepared. An employer must be allowed some reasonable leeway in which to alter his employee’s duties”. Defence counsel notes:
In this case the merger was finalized on November 30, 1999. Brannan subsequently signed three ‘Assignment Decision Forms’, in which he accepted his positions as ‘Operations Manager’ and confirmed they did not ‘involve diminution of duties’. EM Corp. submits that there were no fundamental changes to Brannan’s employment, and that in any event any changes that were made were condoned by Brannan.
[83] In his reply counsel for the Plaintiff observes that Brannan never accepted the offered role of Sable Operations Manager following the change in operatorship. He says at this point the position was a “very reduced position as compared to the previous position he held as President and General Manager of SOEI when the ABCD letters were signed”.
(I) Any changes were not made by the Defendant
[84] The Defendant submits that if changes were made to the Plaintiff’s contract of employment, they were not made by the Defendant. The submission cites Farber, supra, at para 24. With similar emphasis counsel cites the Ontario Court of Appeal decision in Stolze v. Addario (1997), 36 O.R. (3d) 323 at p. 326:
The law is clear that in assessing whether there has been a constructive dismissal of an employee the terms of the employment contract between the parties must be ascertained. The court must then consider whether the act or acts of the employer have been such as to constitute a repudiation of the fundamental terms of the contract. If so, the employee was constructively dismissed when the facts constituting the repudiation were completed: see Farber v. Royal Trust Co., [1997] S.C.R. 846, 145 D.L.R. (4th) 1. (Emphasis added by counsel).
[85] In the submission of defence counsel, constructive dismissal only occurs when the “employer” makes a unilateral change in the employment contract. Counsel notes the Defendant was Brannan’s employer at all times, but because the changes would have been made by SOEI, such changes cannot form the basis of a constructive dismissal by the Defendant.
[86] In respect to whether the employer effected the changes, in as much as the changes were, in form at least, made by the Management Committee of SOEI, it is clear the Defendant either made the changes directly, or initiated the changes made by SOEI. Regardless of whether the Defendant was the shareholder of SOEI, or one of its related companies was the shareholder, clearly the Defendant was the effective controlling voice in directing the change in Brannan’s authority and responsibilities. The reality is that the Defendant was “calling the shots”. Although it had decided to wait until Shell Oil had come on line with its intended restructuring of the operatorship of the Offshore Development, the evidence is extensive and unambiguous that the changes in the Plaintiff’s role at SOEI were the result of the Defendant’s decision to take over much of the day to day management of the services previously carried out by SOEI, under the leadership of Brannan as its President and General Manager. The submission that the Defendant did not hold an interest in SOEI, is unresponsive to the real question, which is “who made the decisions and who called the shots”. Regardless of the umbrella corporation that may have been used to effect its purpose, the entity making these decisions was the Defendant, and the existence of various corporations does not change that conclusion. As stated by Plaintiff’s counsel, in reference to other submissions of the Defendants, a contrary result would be “ludicrous”.
[87] Additionally, counsel suggests, the changes were not unilateral in that the ability to make such changes were part of the terms of Brannan’s contract of employment. Counsel suggests Brannan was aware that all the “changes” of which he complains were contemplated by the corporate structure and therefore impliedly consented to by him. Counsel cites Woodward v. Dubois Chemicals of Canada Ltd., [1988] O.J. No. 1984 (Ont. H.C.J. ); appeal dismissed, [1991] O.J. No. 459 (Ont. A.C.) where, at p. 9, Justice Doherty, referencing Levitt, The Law of Constructive Dismissal in Canada (1985), p. 43, stated:
... To succeed, the plaintiff must convince me that the terms set out in-the July 2nd letter purported to alter the fundamental terms and conditions of the contractual relationship existing between Woodward and Dubois as at July 2, 1985. Changes in the existing working relationship between an employer and an employee do not per se give the employee the right to treat the contract as terminated. It must be determined whether the changes are contemplated by the existing contractual agreement. If they are, then the employee can have no complaint. If the changes are not contemplated, then the question becomes whether they are significant enough to justify regarding the contract as terminated.
[88] Justice Doherty concluded at pp. 13-14:
... He chose to quit rather than to accept terms which were within the ambit of his agreement with Dubois, and which were put forward by Dubois in good faith. Alternatively, Mr. Woodward chose not to agree with the terms proffered by Dubois. His refusal justified his dismissal.
[89] Counsel also references Farber, supra, at para 25, where Justice Gonthier outlined the scope of an employer’s managerial authority to make changes in an employee’s position that are allowed by the contract, noting that such changes, “will not be changes to the employment contract, but rather applications thereof.”
[90] Defence counsel references, a number of acknowledgements by Brannan in cross-examination, many of which the Plaintiff’s counsel has responded to in his reply submission:
* he knew before accepting the position that SOEI was owned by the shareholders and governed by a (sic)Unanimous Shareholders Agreement (USA) ... . In fact, despite the fact that this was a multi-party document, without authorization, Brannan reproduced parts of the USA in his CIC application and the List of Documents in this action.
[91] Plaintiff’s counsel, in reply, says there was nothing improper about Brannan’s conduct in this regard and notes that Woodbury, in testifying, made reference to a portion of the USA that was not before the Court, and also that Defence counsel quoted extensively from it in his initial submissions.
* While Brannan disagreed with Jeff Woodbury and Ken Miller on the number of times the Management Committee met throughout the year, he agreed that the Committee went through every aspect of the project and made the necessary approvals.
[92] In response Plaintiff’s counsel says that on the evidence Brannan never agreed that the Management Committee went through every aspect of the project and made the necessary approvals. Counsel suggests that on the evidence what Brannan said was that the SOEI’s Management staff provided the Management Committee with comprehensive updates on the Project, but on a day to day basis Brannan made the decisions which were within his authority, referring only those outside of his authority to the Management Committee.
* Brannan acknowledged during cross-examination that ... he was aware that his role would change as the project moved from the development phase to the production phase.
[93] Plaintiff’s counsel in response says that although eventually this may have been true, at the time of the merger, the development phase project was far from complete. His submission continues:
....As the Defendant clearly acknowledges . . . when SOEI was initially set up, its role was to develop and produce all six fields. Three of those fields were developed and produced in Tier I while the other three were to be developed and produced in Tier II. It was always the intention that SOEI would develop Tier II and bring it into production. However, this did not occur and following the merger the development of Tier II was effectively removed from Mr. Brannan’s authority as described in our earlier response to paragraph 6 herein.
* Brannan acknowledged during cross-examination that ... he was not aware of any breach of the USA or that there were any concerns raised by the other shareholders about the actions of EM Canada or even EM Corp. as it related to the operation of SOEI.
[94] Plaintiff’s counsel suggests that this misstates the evidence and cites from the exchange between Defence counsel and Brannan as follows:
Q. ... I am putting to this witness, whether at all times to your knowledge, and I will make it as specific as I can that there’s a (sic) USA, and there’s other agreements in place dealing with the governance. Can you identify any party that breached any of those terms?
A. Are you asking if I breached them?
Q. No, if you can tell me do you have any paper or anything that shows that any party breached any of the terms of those agreements that set up SOEI and operated SOEI.
A. I think that when ExxonMobil came in when Exxon and Mobil merged and then when Exxon Mobil came in, that the spirit of the agreement and the relationship that we had established between Sable Offshore Inc. and the owners was changed.
Q. Well, did any of the shareholders raise an issue with that?
A. I believe that in some of the initial meetings the shareholders did raise an issue with that.
Q. But did they say ...
A. And we established a protocol for communications that was distributed at the Management Committee meeting on the 1st of February 2000 because those things were being breached.
Q. Sir, was there, what section, what part of the agreements are you saying were breached? You talk about the spirit, what was breached?
A. I think in the secondment agreements that when you put a person into Sable the directions were supposed to come from Sable Offshore Energy Inc. to how that individual was to work and perform work and communicate and do those things. Typically the owners did not breach that and direct the individuals specifically. Whereas after the merger between Exxon and Mobil I think there was a whole lot of direction that was going on not through the established protocol. That’s why in February of 2000 we put that protocol piece together for the owners.
[95] Plaintiff’s counsel continues by citing what he suggests are examples of “direct intermeddling by the Defendant in the operation of SOEI contrary to the USA and the secondment agreements.”
[96] On the issue of whether any changes were effected by the Defendant, Plaintiff’s counsel suggests the Defendant’s logic is flawed. In the submission of Plaintiff’s counsel, the Defendant’s proposition is that a seconded employee could never sue for constructive dismissal because any changes to his duties and responsibilities were not made by the employer, but by the party to which he/she had been seconded, in this instance, the SOEI Management Committee. Counsel suggests that the “key triggering factor” in a constructive dismissal claim is that there be a fundamental change to the employment contract and in the typical employer-employee relationship the only party who has the ability to make such a change is the employer. However, recognizing that Brannan was seconded to the position of President and General Manager of SOEI, while remaining an employee of the Defendant, the key issue here is whether there were fundamental changes made to his seconded position and, “if so, whether or not the Defendant had any responsibility to Mr. Brannan on account of those changes.” Plaintiff’s counsel continues:
First, if the Defendant’s logic was accepted, then the law of constructive dismissal would never apply to seconded employees. For example, SOEI’s Management Committee could decide to change Mr. Brannan’s position from President and General Manager to janitor and he would have absolutely no ability to sue for constructive dismissal since the Defendant, not SOEI, was his employer. With respect, such an argument is ludicrous.
Second, as argued in our post-trial brief ..., even if SOEI’s Management Committee did formally approve the changes which diminished Mr. Brannan’s position, the Defendant is still responsible for same because it was aware of the changes and did nothing, and, in almost every case, it was the party who initiated the changes. Clearly, after the merger, the Defendant controlled nearly a 60% interest in Sable and no change could be made to Mr. Brannan’s position without its approval.
Finally, as accepted by Mr. Woodbury and Mr. Miller at trial, given that the Defendant remained his employer and was responsible for his career planning, if SOEI diminished Mr. Brannan’s position, the Defendant was obliged to provide him with an equivalent position within its organization consistent with his career development. Using the same example again, if SOEI made Mr. Brannan a janitor, the Defendant would have had an immediate obligation to offer Mr. Brannan an equivalent position to the one he had held as President and General Manager. Again, to suggest otherwise, would mean that Mr. Brannan would have no ability to sue anyone for constructive dismissal.
[97] In a response to the Plaintiff’s reply submission, counsel for the Defendant notes that the obligations of EM Corp. during Brannan’s secondment, included responsibility for his salary, benefits and career planning. These were fundamental terms and conditions of his employment with the Defendant and these terms and conditions did not change as a result of the secondment. It is the Plaintiff who resigned from the Defendant. Also, counsel notes in his previous submission, that at no time was there a diminution in Brannan’s earnings. In respect to the latter, although Brannan forecasted that in due course, because of the downgrading by Woodbury and its likely impact on his future career with the Defendant, there would be a diminution in earnings, it is clear that such a diminution did not occur by the time of his resignation. Effectively, whether there would have been a diminution would have depended, to a large extent, on his career performance had he remained with the Defendant. In Ata-Ayi v. Pepsi Bottling Group (Canada) Co., [2006] O.J. No. 4440, performance appraisals were not a basis for a successful constructive dismissal action. Were it so, every employee who received a negative performance appraisal would be entitled to regard it as a basis for resigning and claiming the appropriate compensation, in lieu of notice. Such is not the law, nor the entitlement of an employee.
[98] The thrust of the respective positions relate to the nature of the secondment, the position to which Brannan was seconded, and the changes that occurred in his position. Clearly, in respect to the terms of his engagement with SOEI, changes were brought about in his authority, duties and responsibilities, that are not simply applications of the employer’s managerial authority. Clearly, there were fundamental changes to the terms of his employment contract. These changes entitled Brannan to treat the employment contract as terminated and to resign and claim constructive dismissal.
[99] However, these changes relate to Brannan’s position with SOEI, not his position with the Defendant. There never was, on the evidence at least, any change in his position with the Defendant, and the position he held at the time of the commencement of the secondment was still the position he held within the Defendant at the time of his resignation.
[100] Much of the Plaintiff’s submission is that because the Defendant was responsible for his career planning, he was entitled to be promoted to a position equivalent to the seconded position. The submission is that at the expiration of the secondment he was entitled to the position he had held during the secondment, or its equivalent, rather than the position he held with the Defendant, at the time of the secondment. Such a position appears to have been acknowledged by Mr. Miller when he indicated that when Brannan had left SOEI “... we would have found him a position which would have been equivalent to President or General Manager or something higher.” Also Woodbury is cited by the Plaintiff as stating “the intent or agreed upon plan was that John (Brannan) would move to another position concurrent with the change in operatorship. We expected that this would occur in February, 2002.” He then stated: “the plan was for John to go somewhere else with his career. ... The plan was for John to move into a bigger opportunity in EM.” This testimony was clearly given in the context of confirming the Defendant’s assertion that Brannan was “a very well-regarded executive” in the Defendant’s organization and the plan was for him to move to another executive position to compliment his career goals. However, this is not evidence that Brannan had been promoted to a higher position within the Defendant, or was otherwise somehow entitled to a higher position or to an equivalent of the position he held in SOEI.
[101] The basis of the Plaintiff’s claim is, initially, that he was constructively dismissed because his role as President and General Manager had been diminished. That submission clearly has merit. At issue is the Plaintiff’s assumption that on conclusion of the secondment he was entitled to return to his employer at a position equivalent to the position which he had been seconded, rather than the position he had held with the Defendant. No authority is cited by the Plaintiff in support of such a proposition. There is nothing in the secondment agreement that so provides. While Plaintiff’s counsel has suggested that some of the Defendant’s positions are “ludicrous”, so too would appear to be the proposition that an employee, temporarily seconded to another position, is entitled to have the equivalent of the status and title of the position to which he/she is seconded, on the conclusion of the secondment. Consequently, if a low level executive was seconded to run another operation as President and CEO for a specified period, then on his return that employee would be entitled to an equivalent position with his employer. That suggestion, or proposition, is as “ludicrous” as what the Plaintiff says of some of the Defendant’s assertions.
CONCLUSION
[102] In resigning his secondment as President and General Manager of SOEI because of a diminution of his authority and responsibility as President and General Manager, that, effectively, in his view, made the position redundant, Brannan also stated he did not intend to continue his employment with ExxonMobil “in a lesser position” and tendered his resignation.
[103] Effectively, Brannan viewed his secondment as entitling him to a position equivalent to his seconded position, on his return to his original employment. No authority for such an expectation was cited by counsel for the Plaintiff, and nothing in the secondment agreement suggested such an entitlement. The effect of his expectation, as he testified and as clearly set out in his November 16, 2001 resignation letter, is that a person who is seconded to a position is entitled to the equivalent of the seconded position on the termination of the secondment, even though the seconded position was an advancement from the position he occupied immediately preceding the secondment. Again, no authority has been cited by the Plaintiff that would entitle an employee to such an expectation.
[104] On the other hand, Mr. Miller certainly suggested there was the expectation, upon his return on the termination of the secondment, that the Defendant would be looking for a position for Brannan equivalent to the one he was leaving. Is that binding on the Defendant such as to create an obligation to provide such an equivalent position? Again, no authority was cited by the Plaintiff to suggest such a principle and although, as many of the defence witnesses testified, Brannan was held in high regard by the Defendant, there was nothing to suggest that he was entitled to anything more than the position he occupied at the time of the commencement of the secondment, not a position equivalent to the seconded position.
[105] Woodbury apparently never replied, in writing, to the October 31, 2001 e-mail, disputing Brannan’s assertions as to what had occurred on October 30, 2001. Having considered both of their evidence and the circumstances, I am satisfied that where there is conflict, I prefer the evidence of Brannan. I am equally satisfied that the issue here is not the seconded position, but rather the position of employment held by Brannan with the Defendant. In view of the change in the terms of his seconded position Brannan was entitled to treat the secondment as being at an end. Article 3 of the Secondment Agreement, entitled “Termination of Secondment” provides for termination as follows:
a. Shareholder and Sable Energy, after consulting with Secondee, mutually agree to terminate it;
b. Sable Energy or the Shareholder decide to terminate it due to changed business circumstances and provide 90 days prior written notice of the termination to the other parties;
c. Shareholder and Secondee agree to remove or transfer the Secondee prior to the conclusion of the Secondment and provide 90 days prior written notice to Sable Energy;
d. Secondee resigns as an employee of Shareholder or Secondee’s employment is terminated by Shareholder for reasons unrelated to the Secondment;
e. Sable Energy or the Shareholder determine, after discussion with Secondee and each other, that the attendance, performance or conduct of the Secondee is unsatisfactory, or determine, after consultation with each other, that the Secondee has committed an act of misconduct, or has acted contrary to the terms of this Agreement; or
f. the concluding date as shown in Schedule ‘A’ or, if amended by written agreement of the Parties, the concluding date as amended; whichever first occurs.
[106] Notwithstanding the Agreement does not specifically provide for the unilateral termination by the Secondee, absent his resignation as an employee of either SOEI or Mobil Oil Canada Properties, or the Defendant, the Agreement clearly would be subject to an obligation by all parties to carry out the terms and conditions therein. By Article I the general scope of work and place of work for the secondee was stipulated to be as set out in Schedule A, which provided that the position to be filled was “President and General Manager”. The change in terms and conditions, even with the continuation of the title of President and General Manager, was a breach of the agreement in respect to the Secondee and entitled him, even absent a specific provision in Article 3, to terminate the Agreement. He was constructively dismissed, the Agreement was breached, and his alternatives were to accept the new role, which Brannan clearly did not, or to terminate the secondment and to return to his position with the employer that he held prior to the secondment. There is nothing that entitled him to a higher position or, for that matter, to a position equivalent to the seconded position.
MITIGATION
[107] In view of my conclusion, it would be unnecessary to deal with the issue of mitigation. However, in the event this should become relevant, the position of the Defendants in this regard is without merit. Although there are a number of instances cited by Defendant’s counsel where obligations to mitigate required the employee to accept the new position with the Defendant, clearly the Plaintiff is correct in asserting that obligation continued only until the employee was successful in obtaining alternative employment, at the most. Here, Brannan had obtained alternative employment, although with financial loss, as is evidenced by the fact the parties have agreed on the amount of his damages in the event the Defendant is found liable. To subscribe to the Defendant’s position, would be to require Brannan to remain in the diminished position indefinitely or at least until the termination of the secondment. In other words, as Plaintiff’s counsel suggests, a seconded person could not be constructively dismissed. Essentially they would be required to continue in the position, notwithstanding the constructive dismissal, in order to mitigate any loss. Again, such a position, in these circumstances, is ludicrous.
[108] The Plaintiff was constructively dismissed from his position as President and General Manager of SOEI. The Plaintiff was not constructively dismissed from his position as “Operations Manager” with the Defendant.
J.