By: Stephanie McDonald and Ravi Bhaduri
Key Lessons from McFarlane v. King Ursa Inc
The Superior Court of Justice of Ontario’s decision in McFarlane v. King Ursa Inc., shows how the law protects workers returning from maternity/pregnancy leave or parental leave. When you’ve stepped away to give birth or raise a child, your return should be met with respect and appreciation. You’ve done something extraordinary and still want to support your workplace—that deserves encouragement, not added stress. If your employer mishandles your return or demotes you without proper cause, the court can make a finding of constructive dismissal and award compensation.
Case Facts
McFarlane was a senior executive at King Ursa, an advertising company. During her tenure, she was promoted quickly from Director of Analytics in 2019 to Senior Vice President by 2021. While on maternity leave, the company delayed her return to work twice, and discussed offering her a severance package. Subsequently, they provided her with a letter that demoted her, and cut her pay by a whopping $90,000. McFarlane refused the offer and resigned. She claimed constructive dismissal, suggesting the employer made her job so different that it was like being fired.
The Court’s Decision
The court agreed with McFarlane stating that:
- A demotion and pay cut, especially for a senior executive, can result in constructive dismissal
- Employers must respect the dignity and status of employees, especially upon their return from maternity leave
- The company’s claim that the demotion letter was a “typo” was insufficient
- Employers are responsible for the documents they provide to their employees
Damages and Notice
McFarlane won:
- 12 months’ notice-even though she worked there for only four years.
- $40,000 in moral damages for the company’s inconsiderate treatment.
The court emphasized that senior executives often struggle to find similar jobs, which explains the longer notice period. The court also discussed the emotional impact of a demotion, especially when the employee is at risk, such as returning from maternity leave, or facing financial pressure.
Final Takeaways for Employees
If you’re coming back from maternity leave, you deserve a fair and respectful transition—not a demotion or a surprise pay cut. McFarlane v. King Ursa Inc. shows that the courts take these situations seriously.
A big title change, loss of status, or salary reduction can amount to constructive dismissal. You do not have to accept conditions that undermine your role or dignity, especially after parental leave.
If you are demoted after maternity or parental leave in Ontario, pause before signing anything. Get legal advice, understand your rights, and make an informed choice. Standing up for yourself is not only about compensation—it’s about protecting your career and your worth.
At Workplace Sage Legal, we specialize in protecting the rights of vulnerable employees. Our experienced team understands the nuances of employment law and will fight ferociously to help you receive fair treatment, proper compensation, and the respect you deserve. If you are looking for compassionate and capable legal advice, book a consultation with Workplace Sage Legal today.
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