McDonald’s Manager Awarded 20 Months’ Severance After Demotion

A longtime McDonald’s manager in Ottawa was awarded 20 months’ compensation after being told to accept a humiliating demotion or lose her job. The Ontario Court of Appeal upheld the award in May 2017, confirming that the employee had been constructively dismissed.

What Happened to the McDonald’s Manager?

Esther Brake worked at McDonald’s restaurants for more than 25 years, eventually becoming a restaurant manager in Ottawa.

After being transferred to a poorly performing location, she was placed on a performance improvement plan with unrealistic expectations.

In August 2012, her employer told her to accept a demotion to first assistant manager or be fired. The new position carried inferior benefits and significantly reduced her responsibilities.

Brake refused the demotion and pursued a constructive dismissal claim.

What Did the Court Decide?

In March 2016, the Ontario Superior Court found that Brake had been constructively dismissed. The court determined that her employer had set her up to fail and that the performance concerns did not justify firing her for cause.

She was awarded $104,499.33 in compensation, equivalent to 20 months’ pay and benefits, including her statutory termination and severance entitlements.

Her employer appealed the decision.

On May 23, 2017, the Ontario Court of Appeal dismissed the appeal. The court upheld the constructive dismissal finding and the 20-month compensation award.

The court also confirmed that Brake was not required to accept a humiliating demotion simply to reduce her employer’s severance obligations.

Case: Brake v. PJ-M2R Restaurant Inc., 2017 ONCA 402.

Can Your Employer Demote You Instead of Firing You?

A significant demotion without your agreement can amount to constructive dismissal, even if your salary stays the same.

Examples include:

• Being moved into a substantially lower-ranking position
• Losing important responsibilities or management authority
• Having your benefits or other compensation reduced
• Being given the choice between accepting a major change or losing your job

If the change fundamentally alters your employment, you may be entitled to Ontario severance pay even if your employer hasn’t formally terminated you.

Learn more about constructive dismissal in Canada and your rights when an employer changes your job.

Facing a Demotion or Major Change to Your Job?

If your employer has reduced your responsibilities, changed your position or pressured you to accept a demotion, Samfiru Tumarkin LLP can help you understand your options and pursue the severance compensation you’re owed – as much as 24 months’ pay.

Our Ontario employment lawyers represent non-unionized employees in Ontario, Alberta and British Columbia.

Before you resign or sign anything, always check first.