Jan 18

A Comprehensive Analysis of Constructive Dismissal: The Case of Airways Transit Service Ltd.


In the intricate landscape of employment law, the case of Airways Transit Service Ltd. and Badder Capital Group Ltd. 2023 ONSC 5725, adjudicated on October 11, 2023, stands as a noteworthy example. This case brings to light the complexities of constructive dismissal, a pivotal concept in employment relationships, offering valuable insights for both employers and employees.

Background of the Case

The case centers around Airways Transit Service Limited (“Airways Transit”), a significant player in the airport shuttle service industry in the Greater Toronto Region. The economic turmoil brought on by the COVID-19 pandemic in March 2020 resulted in the layoff of many of its employees, including the plaintiff, a long-serving and high-ranking member of the company. Following the layoff, a few employees, including the plaintiff continued to work, unpaid, from March to June 2020. In June 2020, the plaintiff discovered that many positions had been restored to full-time work, and from June to December 2020, fifty-one employees were recalled back to work, excluding the plaintiff. Subsequently, the plaintiff initiated a claim for constructive dismissal against Airways Transit 

Exploring Constructive Dismissal

At the heart of this dispute is the legal concept of constructive dismissal. This occurs when an employer makes a substantial change to the terms of employment without the employee’s consent, effectively forcing the employee to resign. The central question in this case was whether the actions of Airways Transit amounted to constructive dismissal of the plaintiff.

The Plaintiff’s Journey and Role

The plaintiff’s association with Airways Transit began in 1992, evolving over the years to the role of Vice-President. His responsibilities were broad, touching every aspect of the company’s operations. Despite being laid off, his commitment to the company remained steadfast, as he continued to work without pay for several months during the pandemic. His efforts to assist the company financially during this challenging time, however, did not result in his recall to work, a point of contention in the case.

Legal Strategy and Arguments

The plaintiff sought resolution through summary judgment, a legal route that allows for a decision without a full trial. He argued that all the evidence necessary for a decision was already available, rendering a full trial unnecessary. Airways Transit partially concurred, agreeing on the question of liability via summary judgment but suggesting further examination for the determination of damages.

Key Legal Questions

The case raised several pivotal legal questions:

(1) Whether Regulation 228/20 – Infectious Diseases Emergency Leave (“Regulation 228”) precludes common law claims for constructive dismissal.

(2) The determination of whether the plaintiff was constructively dismissed.

(3) Establishing the appropriate notice period for the termination.

(4) Evaluation of the plaintiff’s efforts in mitigating damages.

(5) Assessment of the right compensation for the plaintiff.

(6) Consideration of aggravated moral or punitive damages.

Court’s Decision

The Superior Court of Justice concluded that Regulation 228 does not preclude the plaintiff from pursuing a common law claim for constructive dismissal due to a COVID-19 pandemic-related layoff. The ability to pursue civil remedies for wrongful dismissal outside of the purview of the Employment Standards Act, 2000 is well-established in Ontario.

On the issue of the plaintiff’s constructive dismissal, the court decided that the plaintiff was constructively dismissed. The layoff, which had persisted for almost three years without a recall to work, was deemed by the court as neither temporary nor justified by reasons related to the COVID-19 pandemic. An indefinite, unpaid layoff, can constitute constructive dismissal, and this fundamental change was found to be imposed unilaterally on the plaintiff by Airways Transit.

The court awarded the plaintiff 25 months’ compensation in lieu of notice, along with $30,000 in punitive damages. The justification for the punitive damages lay in Airway Transit’s failure to satisfy its duty of good faith in dealing with the plaintiff and recalling him back to work.

Implications for the Workplace

This case underscores the complexities inherent in employer-employee relationships, particularly during unforeseen situations such as a global pandemic. It highlights the importance of understanding the legal ramifications of changes to employment contracts and the responsibilities that both parties hold in such circumstances.

Employers’ Responsibilities and Challenges

In challenging economic times, employers often face difficult decisions regarding staffing and operations. The Airways Transit case illustrates the potential legal consequences of decisions perceived as constructive dismissal. This emphasizes the need for employers to carefully consider the legal implications of their actions, ensuring clear communication and adherence to legal standards when altering employment terms.

Employees’ Rights and Legal Pathways

For employees, understanding their rights in situations where they feel forced out of their employment is crucial. Recognizing the legal definition of constructive dismissal and the pathways available for legal recourse is important. In cases like the plaintiff’s, seeking legal counsel and pursuing the right legal action is often a necessary step.

Mitigating Damages and Legal Proceedings

A notable aspect of this case is the emphasis on the plaintiff’s duty to mitigate damages. This legal requirement necessitates that an employee claiming constructive dismissal make reasonable efforts to lessen their losses, such as actively seeking alternative employment. The case also highlights the utility of summary judgment as a method for resolving legal disputes efficiently, bypassing the need for a full trial in clear-cut legal issues.

Summary Judgment: A Closer Look

The pursuit of summary judgment in this case is illustrative of how certain legal disputes can be resolved effectively without the extensive time and resources required for a full trial. This approach is particularly beneficial in cases where the primary facts are not in dispute, and the legal issues are clear enough to be decided based on the available evidence. However, it’s important to recognize that summary judgment is not suitable for all cases, particularly those involving complex factual disputes or where a thorough examination of evidence is necessary.

The Role of Legal Advice in Employment Disputes

This case also underscores the importance of obtaining professional legal advice in employment disputes. Both employers and employees can benefit from legal counsel to navigate the complexities of employment law, ensuring that their rights and obligations are clearly understood and effectively represented.


The Airways Transit Service Ltd. case provides a comprehensive look into the complexities of constructive dismissal. It serves as a reminder of the nuances of employment law and the importance of informed decision-making in the workplace. For both employers and employees, this case emphasizes the value of understanding their legal rights and the importance of seeking professional guidance in employment-related issues.

Monkhouse Law is an employment law firm located in Toronto focusing on employees’ issues. Please contact us at 416-907-9249 or fill out this quick form for a free 30-minute phone consultation.