Constructive Dismissal



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In Ontario,constructive dismissal occurs when an employee has not been dismissed, but the terms or conditions of their employment have changed significantly


The Remedies for Constructive Dismissal

These changes may relate to, among other things, compensation, title, duties, office location or working hours. Recent case law suggests that abusive behaviour by an employer may also constitute constructive dismissal. The current leading decision is Potter v. New Brunswick Legal Aid, 2015 SCC 10. A constructive dismissal can be found in one of two ways: a. the employer “substantially alters an essential term of the contract of employment”; or b. the employer pursues a course of conduct which “evinces an intention to no longer be bound by the contract.” The test is not whether the employer intends to be bound, but whether a reasonable person in the circumstances of the employee would think that the employer has objectively evinced the intention to no longer be bound.

The remedies for constructive dismissal are similar to those found in a wrongful dismissal suit. This is because the terms of employment have been substantially altered or the employer’s conduct shows an intention to no longer be bound by the employment contract, as though the employee has been dismissed. In this situation, the employee is entitled to reasonable notice because the employment contract has ended and they have essentially been terminated from the job that they signed up for. Constructive dismissal is an extremely complex area of employment law. Professional legal advice should be sought at an early stage to help you negotiate an exit package. Please note that the above information does not constitute legal advice. It is general information about the law. If you require legal advice and assistance in an employment matter, please contact the experts at Ball Professional Corporation.


Canadian Employment Law

Mr. Ball is author of the authoritative and definitive text Canadian Employment Law - published by Canada Law Book (a division of Thomson Reuters). The text is used and cited by lawyers, law schools and judges across Canada.

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