What is a Constructive Dismissal?

Mar 16, 2017

The traditional type of constructive dismissal occurs when an employer makes a unilateral and fundamental change to a term or condition of your employment contract without providing you with reasonable notice of that change.

In 2015, the Supreme Court of Canada recognized a second kind of constructive dismissal which occurs when you can show your employer no longer intends to be bound by the contract. In other words, you do not have to show that a specific term of your contract has been breached.

Being constructive dismissed is like being pregnant; either you are or you are not. If you take the position you are constructive dismissed and quit and you are wrong then you are not entitled to any termination pay.

To determine whether you have been constructively dismissed a lawyer needs to carefully review the facts of your case. Here are situations that can result in a constructive dismissal:

Pay cuts – Generally, a decrease in compensation of more than 20% has been found to be a constructive dismissal.

Late payment of wages – Paying an employee after the employer’s regular pay days can be a constructive dismissal.

Demotion – A demotion  in some circumstances is a constructive dismissal

Change in hours of work – Changing an employees hours of work can be a constructive dismissal.

Temporary layoff – Unless the employee has agreed that temporary layoffs are permitted then such a lay off is generally a constructive dismissal. There are exceptions.

Suspension – Unless the employee has agreed that the employer has the right to suspend without pay as a form of discipline, a suspension is generally a constructive dismissal. Even some paid suspensions have been found to constitute a constructive dismissal.

Poisoned work place – An employer who creates intolerable working conditions is sometimes considered to have created a poisoned workplace. Workplaces become poisoned for the purpose of constructive dismissal only where serious wrongful behaviour is demonstrated.

If you would like to speak to an employment lawyer at the MacLeod Law Firm, you can reach us at [email protected] or 647-204-8107.

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

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