How A Corporate Reorganization Can End Up Being A Constructive Dismissal Lawsuit

With Damocles' sword of constructive dismissal lawsuits looming over employers who wish to reassign staff, even a minor misstep can prove costly.

A promotion to vice-president of operations with General Coach Canada, a manufacturing company in Henshall, Ont., was a remarkable achievement for Ken Farwell, who had started out as a general labourer and rose to become a member of the three person executive team responsible for operating the plant.

But his ascendancy was short lived. Roger Faulkner, the vice-president of sales and marketing, chafed under this collective structure and was able to persuade the U.S. head office to appoint him vice-president and general manager of the plant with Farwell reporting to him. Shortly thereafter, Faulkner was named president with overall responsibility for the Henshall facility.