CONSTRUCTIVE DISMISSAL – Update from the Supreme Court

Mar 11, 2015

Many of us experience variations in our work and working conditions. However, if a change is significant enough it may amount to constructive dismissal.

Constructive Dismissal Definition

A constructive dismissal 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 an abandonment of the contract of employment by the employer.  That means that an employee can treat the contract as wrongfully terminated and resign. This then gives rise to an obligation on the employer’s part to provide damages in lieu of reasonable notice.

Suspensions

In a recent Supreme Court of Canada decision, Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10, the court addressed when a suspension may be a constructive dismissal.

David Potter was appointed as an Executive Director of the Commission for seven years.  After several years, the Commission administratively suspended Potter indefinitely with pay and assigned his duties to another employee. Potter claimed that he had been constructively dismissed. The Supreme Court agreed. The Court found that the Commission did not have the express or implied right to indefinitely suspend Potter based on his employment contract.  The court then concluded that the suspension was a substantial change to his contract. The court also found that the employer had not acted in good faith by failing to give Potter reasons for his suspension.

Other Changes to Employment Contracts

For other types of changes which may be constructive dismissals, see here.

Whatever the change, it must be fundamental or substantial to be considered constructive dismissal. The courts will look at the specific facts of the employment position in order to determine whether you have been constructively dismissed. It is up to the employee to prove that the change was significant enough that it amounted to a dismissal.

If you would like to speak with an employment lawyer who has knowledge about this area of law, please contact us at [email protected] or 647-633-9894.

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