Constructive Dismissal + Defamation! Thibert Case

By: Joel Fairbrother

Published: 21 June 2021

Two men discussing the constructive dismissal of an employee.

Alberta Inc. v Thibert, 2021 ABCA 213, is a new Alberta Court of Appeal decision which upheld an employment law decision of the trial judge.

The trial judge said it was constructive dismissal and awarded 9 months’ reasonable notice (severance) for a 6.5 month employee who was induced away from secure employment, $10,000 in aggravated damages for the manner of dismissal, and $60,000 for defamation.  The employer appealed the finding of constructive dismissal, the 9-month severance award, and the $60,000 defamation award.

This case is an important affirmation of certain key principles of employment law surrounding constructive dismissal and severance.  It is also important because it is relatively rare for a former employer to be held liable for defamation of an employee.


The employee had been induced away from secure employment to join the employer. 

Part of the job was that the employee was supposed to sell an IT managed services product of the employer and earn commission on sales.  The employer did not have the product at the relevant time, and also did not have a commission structure in place.  The employer was dissatisfied with the employee’s work and the court found the employer had been trying to get rid of the employee for several months prior to a heated meeting in which the employer criticized the employee, and the employee yelled “I quit” and walked out.  The employee had only worked there for 6.5 months.

After the employee left, the employer sent a letter out to third parties accusing the employee of dishonest and disloyal conduct.

Argument / Conclusion

The Alberta Court of Appeal upheld the finding of constructive dismissal on the following bases:

  • The verbal employment contract between the parties included a term that the employee would sell an IT managed services product, but in this case the employer did not actually have a developed product to sell;
  • The verbal employment contract between the parties included a term that a commission structure would be provided to the employee, but that did not happen;
  • There was a toxic work environment created by the employer.

The ABCA’s analysis surrounding the relationship of these factors as creating a constructive dismissal was as follows:

[52]           It would not be unusual for the circumstances amounting to constructive dismissal to involve both substantial and fundamental change to the employment terms and the onset of an unreasonable work environment as another form of substantial and fundamental change […]

[53]           Having regard to the accusations made against Thibert by Alberta Computers after his departure, coupled with the discredit inveighed against him during the performance appraisals before his departure, it was reasonable for the trial judge to conclude there had been a comparatively rapid onset of dissatisfaction with Thibert’s work. The trial judge attributed Thibert’s untenable position in part to the instructions to sell a non-existent product of ongoing services and to lack of support. The trial judge also accepted that Pope told Thibert he had been trying to fire him for some time. In Matthews v Ocean Nutrition Canada Ltd2020 SCC 26, paras 87, 449 DLR (4th) 583, the majority noted: “in addition to whatever financial dimension work entails, a person’s employment is “an essential component of [their] sense of identity, self-worth and emotional well-being” […]

[54]           An unacceptable workplace environment can be created directly by the employer, or indirectly through condonation of mistreatment […] It is not unreasonable for a trial judge to consider the matter holistically. “Termination of employment can take many forms, not just that of a dismissal” […]

The ABCA upheld the finding that the inducement away from secure employment had the effect of lengthening the reasonable notice period, as follows:

[61]           The trial judge made no error in assessing the reasonable notice period by considering not only Thibert’s length of actual employment with Alberta Computers, but also that he was induced to leave his previous secure and well-paying position. This approach could be considered compensation for the time it took Thibert to restore himself to an employment position comparable to what he left or alternatively, was a distinct basis for compensation. Either way, consideration of Thibert’s inducement in the assessment of a reasonable notice period is supportable in light of the principles in Hadley v Baxendale.

The ABCA upheld the finding that the letter sent out by the employer was defamatory, and rejected the usual employer defence of “qualified privilege”.  

In simple terms, “qualified privilege” is a defence to defamation which allows certain parties such as employers to say or write things that might otherwise be defamatory to third parties about an employee without a penalty.   Here was the ABCA’s reasoning in rejecting the defence of qualified privilege in this case:

[68]           The privilege is not absolute and may be defeated in two ways: first, if the dominant motive for publishing is actual or express malice. Second, if the limits of the duty or interest have been exceeded in that, for example, the information communicated was not reasonably appropriate to the legitimate purposes of the occasion: […]

[69]           Qualified privilege is not a license for an employer to bad mouth a former employee to people with which that former employee might attempt to engage in business. Alberta Computers and Pope were not simply attempting to provide a warning about risks in dealing with Thibert, but attempting to dissuade others from dealing with him. […]

My Take

To me, there are no individual findings in this case that are surprising or that change the law in any significant respect.  However, any time the Alberta Court of Appeal weighs in on these important employment law matters it has the effect of steering the law in the province to some degree and of causing some lines of authority to get cut off.  This decision is a win for employees because for the most part it adopts the lines of authority on these issues that is more favorable to employees.

In addition, there are not many employment law cases involving successful claims of defamation by an employee against an employer, and is good to see the ABCA weigh in on that and provide some direction that an employer can certainly be held liable for defamation of a former employee on the right facts.

Alberta Inc. v Thibert, 2021 ABCA 213 can be found at the following link on CanLii: