Executive Summary: Key Legal and Evidentiary Issues

• Whether Valcom’s introduction of new layoff, suspension, termination, and unilateral change clauses in March 2024 amounted to a unilateral and substantial change to essential terms of Mr. Comeau’s employment contract, giving rise to constructive dismissal.
• How the history of fixed-term contracts, salary increases, and the employer’s failure to explain or highlight new adverse terms informed the court’s view that Valcom no longer intended to be bound by the previous contractual framework.
• The significance of the employer’s reliance on ESA-minimum termination language and expanded layoff/suspension powers without fresh consideration or meaningful consultation in assessing the materiality of contractual changes.
• Whether Mr. Comeau’s departure and lack of further direct communication with Valcom after March 25, 2024 constituted abandonment of employment, viewed objectively in light of the constructive dismissal finding.
• The extent of the plaintiff’s duty to mitigate by remaining in or returning to employment with Valcom, given the altered contract terms, lack of outreach from the employer, and the breakdown of trust.
• Determination of a reasonable notice period in light of Mr. Comeau’s long service, senior role, limited mitigation evidence, and the mutual conduct suggesting both parties were effectively prepared to end the relationship.

Facts of the employment relationship

Timothy Comeau was 56 years old and had worked continuously for Valcom Consulting (through a corporation at first and then as an employee) as a senior project manager at CFB Gagetown from 2009 until March 2024. His work was tied to Valcom’s contract with the Department of National Defence for courseware development at the base. For years, the parties operated under a pattern of fixed-term employment contracts. From 2016 onward, Mr. Comeau signed a series of written fixed-term employment agreements that set out his salary and the specific term of each contract. These contracts covered periods from October 2016 through March 2024, with annual salary increases typically in the 2–3% range and a final annual salary in the 2023–2024 contract of $122,463.81. The termination language in the existing contract was relatively simple: either party could terminate with the greater of 10 working days’ notice or the statutory minimum, and the employee could be terminated without notice for cause. Mr. Comeau’s day-to-day work and role as senior project manager remained stable throughout this time, and he worked solely for Valcom.

Events leading up to the contractual dispute

As the March 31, 2024 contract end date approached, Valcom still lacked confirmation from DND about renewal of its underlying project contract. On February 21, 2024, Valcom wrote to Mr. Comeau and other employees advising that their fixed-term contracts would expire on March 31, 2024 because the DND contract had not yet been extended, while expressing optimism that renewal would occur. At the same time, Valcom sent Mr. Comeau a new draft employment contract for April 1, 2024 to March 31, 2025, offering an annual salary of $126,137.72, a 3% increase over the prior year. Mr. Comeau understood from discussions with his supervisor, Mr. Grant, that he was to receive a 5% raise. He refused to sign the February 2024 draft because the salary increase did not reflect the 5% he believed had been agreed upon. The employer later issued a revised employment contract on March 21, 2024. This new agreement changed the structure of the relationship: it was framed as an indefinite term contract and, crucially, it contained an expanded set of layoff, suspension, termination, and unilateral change provisions that had not appeared in the earlier contracts. The salary remained at the 3% increase Mr. Comeau opposed. At their March 25, 2024 meeting, Mr. Grant explained in general terms that contracts were being changed “because of Larry,” a former employee, but did not go into detail. Mr. Comeau reiterated that he would not sign a contract that did not give him the 5% salary increase he expected. Both sides agreed that the only terms he directly complained about in his discussions with Valcom were the salary terms. The new layoff, suspension, termination of employment, and changes clauses were not expressly discussed with him at that stage.

Key contractual clauses and changes at issue

The earlier February 2024 draft contained relatively limited termination language: either party could end the agreement with 10 working days’ notice or statutory minimum notice, and immediate termination for cause remained possible. The March 21, 2024 draft, however, introduced several new clauses that materially shifted risk and control to the employer. A new layoffs clause allowed Valcom to place the employee on temporary layoff “due to economic, business or other conditions” and expressly stated that such layoffs, if compliant with employment standards legislation, would not constitute termination or constructive dismissal. A new suspensions clause allowed Valcom to suspend the employee, with or without pay, where it deemed it “reasonable,” including for performance or behaviour issues. The termination of employment clause limited the employee’s entitlement on a without-cause termination to only the minimum notice, pay in lieu, severance, vacation pay, and benefit continuation required by the Employment Standards Act, with no further notice or compensation. It also allowed the employer to deduct income earned from other employment during the notice period and stated that this provision would survive all changes to employment, including promotions and varying lengths of service. A further “changes” clause (C.15) gave Valcom broad discretion to unilaterally alter duties, responsibilities, hours, location, reporting structure, or to amend or eliminate plans, with the employee expressly agreeing that such changes would not constitute termination, breach, or constructive dismissal, provided eight weeks’ prior written notice of material changes was given. In his affidavit, Mr. Comeau later explained that he did not understand these changes at the time, had not been walked through them by Valcom, and was particularly concerned that the new layoff provisions could be used to cut costs by sending employees home without pay over holidays or between contract renewals, in a way that had not occurred under the older contracts. He also felt that receiving a termination notice followed by two conflicting contracts signalled Valcom no longer intended to honour previous arrangements, including what he saw as agreed salary increases.

Breakdown of the relationship and departure from the workplace

Mr. Comeau’s last week of work was March 25–29, 2024. With no clarity on renewal and only the revised contract on offer, he used his remaining paid time off on March 29 and submitted his time report on March 28. He received no direct communication from Valcom about contract renewal terms between March 25 and the end of March. On March 31, 2024, Mr. Grant went to the workplace to follow up, found that Mr. Comeau was not present and that he had removed his belongings, and made no further attempt to contact him. For his part, Mr. Comeau also did not reach out to Mr. Grant or anyone at Valcom after March 25. He later testified that he reasonably believed, given the February “expiry” notice and his rejection of both the February and March contracts, that he had no valid employment agreement after March 31, 2024. The next communication from him came via counsel in April 2024, when his lawyer wrote to Valcom alleging constructive dismissal and advising that legal action would be commenced. Valcom’s position was that he had effectively walked away from his job and abandoned his employment around March 27, 2024.

Parties’ positions on constructive dismissal and abandonment

The plaintiff’s case framed the March 21, 2024 contract as an attempt by Valcom to unilaterally impose materially less favourable terms without consultation or fresh consideration. He argued that the new layoff, suspension, ESA-minimum termination, and unilateral change clauses were substantial alterations to essential terms of the employment relationship. From the standpoint of a reasonable employee, these changes signalled that the employer no longer intended to be bound by the prior contractual framework, satisfying the test for constructive dismissal. He relied on Supreme Court of Canada authorities such as Potter v. New Brunswick Legal Aid Services Commission and Farber v. Royal Trust, as well as Holland v. Hostopia on the significance of introducing new termination language without consideration. Valcom, by contrast, argued that the main live issue raised contemporaneously by Mr. Comeau was simply the size of his salary increase. It emphasized that he had never raised the layoff, suspension, or termination provisions in discussion with Mr. Grant, and claimed these did not amount to a fundamental change repudiating the contract. It further contended that the March 2024 agreement was in some respects more favourable (indefinite term, salary increase) and that no fundamental change in his core duties or compensation structure had occurred. On abandonment, Valcom relied on the test that an employee abandons employment only if his words or conduct clearly and unequivocally demonstrate an intention not to be bound by the employment contract, arguing that his failure to return to work or communicate after March 25, coupled with removal of his belongings, satisfied that test.

Court’s analysis on constructive dismissal and abandonment

The court approached the case using the two-branch test for constructive dismissal from Potter. It first considered whether there had been a unilateral change breaching the employment contract and, if so, whether that change substantially altered an essential term of the contract. It then considered the broader question under the second branch: whether, viewed in light of all the circumstances, a reasonable person would conclude the employer no longer intended to be bound by the contract. The judge determined that the dispute about a 3% versus 5% raise was not enough to support a constructive dismissal claim, especially given that Mr. Comeau’s historical increases had been within the 2–3% range and that the employer’s refusal to grant 5% was not a fundamental change. The key, instead, lay in the introduction of new and significantly more restrictive language on notice of termination, layoffs, suspensions, and unilateral changes to terms. Those provisions directly affected job security, income protection on termination, and the stability of Mr. Comeau’s working conditions. The court found that these were substantial alterations to essential terms of employment. The employer had not drawn these new clauses to Mr. Comeau’s attention, provided no meaningful explanation, and did not seek to negotiate them. That lack of consultation, combined with the substantive content of the clauses, meant Valcom had unilaterally attempted to impose a materially inferior contractual regime. Against that backdrop, the court held that Mr. Comeau was constructively dismissed in March 2024. Having reached that conclusion, the judge rejected Valcom’s abandonment argument. Once an employer’s conduct amounts to constructive dismissal, the employee’s decision to leave is treated in law as a reaction to the employer’s repudiation, not as an abandonment of a continuing contract. In the circumstances—where the employer had provided a notice that the contract would expire, tendered two successive contracts that were not accepted, and then stopped communicating—the court found that Mr. Comeau’s departure did not amount to a clear and unequivocal renunciation of an ongoing employment relationship. Instead, it was consistent with his belief (ultimately validated by the court) that the prior contract had ended and that Valcom was trying to impose unacceptable new terms.

Mitigation and the parties’ mutual conduct

Valcom argued that Mr. Comeau could and should have mitigated his damages by accepting the revised March 2024 employment agreement and continuing to work for the company. Relying on Evans v. Teamsters Local Union No. 31, it suggested that an employee may need to mitigate by staying with or returning to the same employer where salary and conditions are not substantially different and the atmosphere is not hostile or untenable. The court took a nuanced view. It observed that in this case both sides appeared to be engaged in a kind of “game of chicken”: Mr. Comeau made it clear he would not accept the 3% raise, did not seek further negotiation once he consulted a lawyer, and did not communicate further with Valcom; Valcom similarly did not follow up with him, did not reassure him that his position remained available, and did not attempt to explain or adjust the contentious contractual clauses. Because the court had already found that the new contract terms amounted to constructive dismissal and significantly altered job security, this was not a situation like Evans where an employee could be expected to mitigate simply by staying on under largely unchanged conditions. Further, Valcom had not clearly offered continued employment on acceptable terms nor informed him that the original position, on prior terms, was still available. In these circumstances, the court held that Mr. Comeau was not required to mitigate by accepting the revised contract or returning to work with Valcom, and it did not find that he had failed to mitigate in that specific way.

Assessment of reasonable notice and outcome

Turning to notice, the court considered Mr. Comeau’s age, length of service, and position. He had been associated with Valcom since 2009 and had been an employee since 2016, always in a senior project management role. This provided him with a broad skill set but also meant that his experience was specialized and tied to the defence-related courseware context. The evidence on his job search was limited but showed that since termination he had applied to dozens of positions, undergone interviews and screenings through platforms such as LinkedIn, and received Employment Insurance benefits from March 31 to mid-December 2024, with no new employment secured at the time of the hearing. At the same time, the court was strongly influenced by its sense that both parties had, in effect, been content to let the relationship end. While this mutual disengagement did not defeat his constructive dismissal claim or amount to a failure to mitigate, the judge considered it relevant to the length of reasonable notice. Balancing all of these factors, the court fixed the notice period at ten months. Mr. Comeau was therefore entitled to ten months’ salary and benefits in lieu of reasonable notice, calculated on the basis of his employment at the time of constructive dismissal. The judgment did not specify a precise dollar figure for that salary-and-benefits component, so the exact total amount of damages under this head cannot be determined from the reasons alone. In addition, the court awarded him costs fixed at $5,000 plus all taxable disbursements. In the result, the successful party was the plaintiff, Timothy Comeau, who obtained an order for ten months’ salary and benefits in lieu of notice (exact sum unspecified in the decision) together with $5,000 in costs and his taxable disbursements, with the precise overall monetary value of the award not fully quantifiable from the text of the judgment.