CONSTRUCTIVE DISMISSAL

What is Constructive Dismissal?

Constructive Dismissal is a situation in which a hostile or toxic work environment has been created, or where there has been a significant change to an employee’s position or duties, that the employee has not agreed to or condoned. In some situations, an employee may resign and still make a constructive dismissal claim, as the resignation may not be considered “voluntary” due to the circumstances of the resignation.

​Difference Between Constructive Dismissal and Wrongful Dismissal

The main difference between a constructive dismissal and wrongful dismissal is that a constructive dismissal does not arise from the employer deliberately terminating the employee. Rather, they have made significant changes to their employment, but they did not intentionally fire them.
A constructive dismissal occurs when the employer has made a significant change to the terms of the employment contract without providing consideration or receiving consent from the employee. This can be a change to the working environment or due to harassment or discrimination. Another way constructive dismissal can occur is if the employer makes a series of less significant changes that results in ‘a death by a thousand cuts’. In other words, the employer has done a number of things that has made it evident it no longer wishes to be bound by the terms of the employment contract.
A similarity between wrongful dismissal and constructive dismissal is the way damages are calculated. However, if the conduct of the employer was so egregious in a constructive dismissal situation, the court may also award punitive or aggravated damages.

What is Unilateral Change?

If an employer implements a change without getting the consent of the employee or providing consideration in return for that change, the employer has made a unilateral change. To have a successful constructive dismissal claim, an employee must not accept this change explicitly or implicitly. Otherwise, the employee will be deemed to have accepted the unilateral change. At that point, a claim for constructive dismissal will likely be extremely difficult.

What is Substantial Change?

While there is clear definition of what constitutes a significant change, to violate the employment contract, it must be substantial. An example of this is forcing an employee who works in Toronto to work in the Muskoka location. On the other hand, a change of location from Downtown Toronto to Midtown Toronto would very likely not meet the definition of substantial change.

Things to Know

What may be considered constructive dismissal for one employee may not apply in every employment situation.  For example, although relocating an employee’s workplace may be a constructive dismissal, that may not be the case if the employment contract states that the employer is allowed to relocate the employee’s workplace, or if the employee has either accepted relocation in the past or waits too long to protest against the relocation (i.e., the employee has condoned the employer relocating their workplace).

In constructive dismissal cases, the timeframe in which an employee protests against a change in their employment situation and makes a constructive dismissal claim is important.  While an employee is allowed some time to “try out” the new situation before claiming constructive dismissal, the employee needs to be aware that if they “try out” the situation for too long, they may be deemed to have condoned the change and therefore no longer have a constructive dismissal claim.  Unfortunately, there are no clear guidelines on exactly how long is “too long” when “trying out” the new employment situation.  It is important to consult a lawyer as soon as possible to receive guidance on this matter.