The Case of Stamos v. Annuity Research - Costs of Workplace Incivility

The case of Stamos v. Annuity Research & Marketing Service Ltd., 2002 is often used to highlight the potentially prohibitive costs of failing to address workplace incivility. 

Stamos suffered severe stress working for her employer’s uncle, who six as having an “explosive personality.”  The uncle often referred to the women in the office using the term "bitches," waylaid meetings and had been resistant to directions and suggestions.

According to an article written by Harvey Enchin for the Vancouver Sun, Stamos’ employer’s uncle:

“burst (ed) into the woman's office, made accusations against her and threatened her to the extent that she locked herself in her office and, at one point, called the police."

Also, despite the blatant display of rudeness and abuse, the employer would not fire his uncle.

The judge ruled the case in favour of Stamos. Annuity Research & Marketing Service Ltd. was required to pay Stamos “six months' salary, vacation pay, and expenses incurred in finding another job, as well as a bonus the employer had offered as an inducement for her to stay, another $3,600 for dental repairs arising from grinding her teeth due to stress and an additional sum to cover mental distress.”

Key points from the case

• When the owner's uncle was hired to administer disability claims, the atmosphere changed in the office.
• The uncle was accustomed to outbursts, had an explosive personality, and took criticism badly. He made sexist and racist comments that created a stressful atmosphere for all six workers. He was especially rude to Stamos.
• When Stamos complained to the owner, he suggested she avoided the uncle and took no disciplinary action. After a time, she resigned as her health deteriorated and she dreaded going to work.

Key issue

Whether constructive dismissal can arise if a co-worker, not an employer or a supervisory employee, creates intolerable working conditions

Decision

The Ontario Superior Court of Justice ruled that the employer constructively dismissed Stamos, as he had a duty to ensure that the work atmosphere allowed the employee to perform her job.

The employer’s failure to prevent harassment by a co-worker breached this duty and constituted constructive dismissal. Instead of reprimanding his uncle for his inappropriate conduct, the employer allowed the employee to suffer physically and emotionally from repeatedly abusive behaviour and language. 

She was awarded six months’ pay in lieu of notice plus $2500 for mental distress.

The test for establishing constructive dismissal

The first test is composed of two parts:

1. Identifying an expressed or implied contractual term that has been unilaterally breached. This is an objective test; if the authority to make the change exists or consent is given, then there will be no breach; and
2. Determining whether the breach was sufficiently serious to constitute constructive dismissal. Typically, issues of compensation, work assignments or place of work are raised. All are questions of degree.

The second test is: Looking at the conduct of the employer, considering all the circumstances, and determining whether a reasonable person would conclude that the employer no longer intended to be bound by the terms of the contract. The employee is not required to point to a specific breach of the contract, but rather whether the course of conduct cumulatively amounts to an actual breach.

About The Mandatory Training Group

The Mandatory Training Group is the leading UK provider of accredited soft skills and communication courses, including the 'Civility in the workplace' e-learning course. Click on the link below to find out more about our workplace civility online training course:

Civility in the Workplace - Online CPD Training Course & Certification.

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The Case of Stamos v. Annuity Research - Costs of Workplace Incivility