Constructive Dismissal: The Cole’s Notes Version

Constructive dismissal is a term used in Ontario frequently. It is not uncommon for us to get a call from an employee who is very unhappy because the person’s employer has imposed a new term of employment without prior discussion. It could be a change in job duties, a change in compensation, a demotion, a change in hours, or a mandatory transfer. The person wants to know whether the change amounts to a constructive dismissal and, if so, what are his or her rights.

Have I been constructively dismissed?

To answer this question, a lawyer will review your individual circumstances and apply the following test:

The Test

A constructivedismissal occurs when an employer makes a unilateral and fundamental change to a term or condition of an employment contract without providing reasonable notice of that change to the employee.

Such action amounts to a repudiation of the contract of employment by the employer whether or not he intended to continue the employment relationship. Therefore, the employee can treat the contract as wrongfully terminated and resign which, in turn, gives rise to an obligation on the employer’s part to provide damages in lieu of reasonable notice.

What are my options under constructive dismissal?

1. You may accept the change in the terms of your employment, either expressly or implicitly through apparent acquiescence, in which case the employment will continue under the altered terms. There are a variety of factors considered in determining whether you have acquiesced or condoned changes to your position.

2. You may reject the change and sue for damages if the employer persists in treating the relationship as subject to the varied term. This course of action is considered a “constructive dismissal”

3. You may make it clear to the employer that you are rejecting the new term. The employer may respond to this rejection by terminating your employment with proper notice and offering re-employment on the new terms. If the employer does not take this course and permits you to continue to fulfill your job requirements, then you are entitled to insist on adherence to the terms of the original contract. In other words, if the employer permits you to discharge his obligations under the original employment contract, then — unless proper notice of termination is given — the employer is currently generally regarded as acquiescing to your position.

4. You may be able to commence a constructive dismissal action against your employer while remaining in your employment in an effort to mitigate your damages.

For information about wrongful dismissal, see here.

If you think you have been constructively dismissed and wish to speak to one of our  employment lawyers, please contact us at  [email protected] or 1-888-640-1728 (toll free) or 647-633-9894 (within the GTA).