When his salary became dividends he claimed he'd been pushed out, but the clock had other plans
A shareholder who spent years working at an Ontario engineering company argued the business forced him out by switching his pay from a salary to dividends. A judge disagreed, ruling he stopped being an employee years earlier and sued too late.
Justice A. Doyle of the Ontario Superior Court of Justice released the decision on June 11, 2026, in a dispute between Kirk Guttin and Brian W. Creber, the shareholders behind B-Con Engineering Inc. and BCE Realty Ltd. Guttin had sought $167,455.67 in constructive dismissal damages tied to dividends his holding company received in 2018 and 2019.
From salary to dividends
Guttin's work at B-Con included running machinery to fabricate optics, managing staff, and handling IT and maintenance. He studied mechanical engineering but did not finish, holds no professional designations, and is not an engineer. From 2007 to 2016, he and Creber drew salaries tied to a federal research and development tax credit. After 2016 the credit lapsed and the salaries stopped.
What followed was a return to an older arrangement: shareholder loans through the year, offset by dividends at year end. In 2018 and 2019, on the accountant's advice, those dividends came from BCE Realty rather than a financially strapped B-Con. Guttin's holding company received $80,000 in 2018 and $88,000 in 2019. He said he did not agree to that method of payment.
Guttin argued the end of his salary and the move to BCE dividends amounted to constructive dismissal, pointing to a clause in the B-Con shareholder agreement providing that "Guttin and/or Creber shall not be terminated for convenience by the Corporation." Creber and the companies opposed the claim as out of time and unproven.
Shareholder, director, employee
Justice Doyle worked through what each label carries. A shareholder has no automatic right to a salary. A director may be paid only if that pay is authorized, and usually receives director fees rather than wages. Holding shares or sitting on a board does not by itself make a person an employee.
The court found Guttin worked for the company, under its direction, for wages from 2007 to 2016. There was no termination letter. He started at Nordion in January 2021 and that month asked to be removed from B-Con's health plan. The judge accepted Creber's evidence that wages stopped in 2017 once the credit lapsed.
That left whether changing the form of his pay was a substantial breach. It was not, the court held. "Even if the unilateral change of payment satisfies the first step in Potter, I do not find that a reasonable person in the same situation as Mr. Guttin would have perceived that the company had substantially changed an essential term of the contract," Justice Doyle wrote.
Filed too late
The court found the claim came too late. Civil claims in Ontario carry a two-year limitation period. Guttin's last employment income was paid in 2016, per his 2016 T4 slip, with nothing showing a salary in 2017. His application, filed in December 2019, fell outside that window.
Under cross-examination, Guttin acknowledged that from 2017 to 2020 he took loans offset by year-end dividends. He stopped coming in when the company could no longer pay him, and was later told he was no longer employed. The court fixed the end of his employment at 2016, not 2020.
The judge concluded the claim was barred and that, in her words, "He was not an employee within the meaning of the Employment Standards Act after 2016." The broader fight ended in divided success: the court found Creber had unfairly disregarded Guttin's right to timely financial disclosure but rejected most other allegations and declined to appoint a receiver-manager.
