After 35 years with Hydro Québec, a senior manager was told to move into a position that represented a demotion. He refused the change and brought a claim for constructive dismissal. The trial court agreed that the employer's action amounted to constructive dismissal, but denied damages because it believed he should have accepted the new role to reduce his financial losses.
The Quebec Court of Appeal reached a different conclusion in Poulin c. Hydro Québec, 2026 QCCA 758, decided June 4, 2026. The appeal concerned an important distinction: whether an employee who has been constructively dismissed must always continue working for the same employer in a diminished role to mitigate damages. Mitigation is a real obligation, but it doesn't necessarily require a worker to accept a substantially inferior position or surrender reasonable concerns about dignity and workplace relations.
The Court of Appeal allowed the employee's appeal. It held that the trial court had erred in treating the proposed demotion as work the employee was bound to accept during the reasonable notice period. The employer hadn't offered the new position as a clear opportunity to work through the notice period, and the surrounding circumstances mattered. The court awarded $836,365, representing 24 months of remuneration, plus interest and an additional indemnity.
This wasn't an exemption from the general duty to make reasonable efforts to find substitute employment. Instead, it demonstrated why proposed mitigation work must be assessed in context. A replacement job with the same employer may be a reasonable option in some cases. That doesn't make every offer, particularly one constituting the very breach of contract at issue, automatically reasonable.
For organizations considering a reorganization, the risk often begins before the employment actually ends. A fundamental change in duties or status can be a dismissal in law even if salary continues. If the employer wants an employee to work through a notice period, the terms and purpose of that offer should be communicated clearly rather than assumed.
An application for permission to appeal to the Supreme Court was subsequently filed. That procedural step does not alter the Court of Appeal's reported disposition on the record reviewed here.
Source: Quebec Court of Appeal, Poulin c. Hydro Québec, 2026 QCCA 758. Detailed judicial reporting: https://carrefourrh.org/lois-et-reglements/jurisprudence/2026/09/836-365-%24-pour-avoir-refuse-mutation