Court Rules no Class Action for Constructive Dismissal

Published on April 29, 2011

The Ontario Superior Court of Justice has refused to permit a group of former Allstate Insurance employees to sue Allstate for constructive dismissal in a class action.  The group of former sales employees alleged that they were constructively dismissed when the company rolled out a new, company-wide model for product distribution and agent compensation.  Because the policy affected the entire group, the plaintiffs argued it was appropriate to deal with their case by way of a class action.

In refusing to “certify” the class action, the court held that “the law of constructive dismissal requires an individual inquiry to determine if an employee’s claim should succeed.”  In particular, the court held that each plaintiff’s individual circumstances, including their position, age, experience, prospects for reasonable alternate employment, and effect on their broader employment relationship, could not appropriately be litigated in a class proceeding.

As a result of this decision, the plaintiffs will be forced to bring their actions individually (unless they successfully appeal the decision).

Read the entire decision on CanlII.

employment law