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Legal Ease
Legal Ease, Lawyer
Category: Canada Business Law
Satisfied Customers: 101021
Experience:  I am a practicing lawyer and have also been an online professional for 5 years.
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BC private corp, held 100% by shareholder in Germany -I was

Customer Question

BC private corp, held 100% by shareholder in Germany
-I was hired by GM(who is also the president) as the internal accountant almost 3 yrs ago
-I was appointed as Director 18 months ago
-there are 2 directors, one in Gernamy (the sole voting shareholder) and myself (as the required Canadian citizen)
-the business has not been viable for many years
-after I was appointed director, my working relationship with the GM/President has deteriorated considerably, especially in the past 6 months
-about 6 months ago, the german shareholder hired price-waterhouse to review our company with the end result being that the shareholder and his family would decide what to do with the business (sell, fix, etc). The process was to take a month or so.
-obviously the stress levels here at the company are crazy high.
-the existing gm/president hs been here since 2009, as has presided over $4 million in losses
-as a single director, I cannot act without a quarum, which effectively means I need an OK from the german owner
- over the past year, I have sent dozens of emails to the owner (in private) recommending changes to the operation and staffing, many of which include removing the gm/president due to lack of performance. the owner only replies to administrative issues and ignores all other parts of my requests. He does not even say 'no', they are simply ignored completely.
- I am responsible to act in the best interest of the company, and I am also legally responsible to do so as a Director
My question is, as I am not allowed to perform my duties, would this be considered a form of constructive dismissal should I become frustrated and resign? Do I have any grounds on which to demand financial settlement? Any recourse at all?
Submitted: 1 year ago.
Category: Canada Business Law
Expert:  Legal Ease replied 1 year ago.

Hello! My name is***** you for your question. I'm reviewing it now, and will post back again shortly.

Expert:  Legal Ease replied 1 year ago.

Can you confirm that you are an employee of the corporation and not an independent contractor?

Expert:  Legal Ease replied 1 year ago.

Did you get a chance to read my questions to you? I cannot answer you in a meaningful way until I gather the appropriate information. There is no charge for us going up and back of course.


Customer: replied 1 year ago.
hi. sorry for the delay. my phone did not show how to reply.
I am an employee, not a contractor.
my position is unusual in that i answer to the gm in my role as accountant, but he answers to me in my role as director.
Expert:  Legal Ease replied 1 year ago.

The situation does sound like this may be a case of constructive dismissal.

When an employer does something that fundamentally changes the nature of the employment so that it drives the employee to quit, this may be a case of constructive dismissal. This is usually the case when the employer reduces wages, cuts hours etc. It is also the case where the employer's conduct makes it intolerable for the employee to continue working.

If an employee does quit under these circumstances then the law is that constructive dismissal is wrongful dismissal and the employer will be liable for damages.

If you are considering this option it is crucial that you first consult with an employment lawyer so that you can get a legal opinion from an expert both about whether the facts amount to constructive dismissal and, as well, about what damages you may be entitled to.

Generally the damages would be equal to what you would receive had you been dismissed without cause. If that had been the case you would have been entitled to receive "reasonable" notice or pay in lieu of notice.

Generally, in determining what is reasonable notice Courts look at several factors including the length of time you worked for the employer, your age, your position, the likelihood of finding new employment etc.

At the high end, if you were in a managerial position, the Court would likely order one month's notice or pay in lieu of notice for each year of employment. If you were not in a managerial position the Court would order somewhat less.

Does that help as a starting point?

Please feel free to post back with any follow-up questions you may have. If you don't have any then I hope I have earned a 5 star rating but if you don't feel that I have please don't hesitate to reply back and let me know what more I can do to assist you. Finally, please know that even after you rate me I will be here for you and you can ask follow-up questions if you think of them later on at no further charge of course.

Customer: replied 1 year ago.
I think my confusion is in the definition of my position and who is considered the employer.
In my role as director is where most of the issues lay. The other director(who is also sole shareholder), in not replying to my emails has certainly frustrated my ability to look after the company properly.
In this role as director, if I feel driven to resign, am I able to sue for damages?
Expert:  Legal Ease replied 1 year ago.

As a director you are sitting on the board because you were elected. This is not a paid employment situation so you cannot sue for damages if you feel the need to step down.

Expert:  Legal Ease replied 1 year ago.

Is there anything more I can help you with at this point in time?