Everything You Need to Know About Constructive Dismissal

What Is Constructive Dismissal?

Constructive dismissal is a legal concept that allows the court to decide if an employee has been terminated, even in circumstances where the employee has appeared to have quit. Usually, the employer has failed to comply with the employment contract or switched a term in the contract without the employee’s knowledge in a significant respect, thus forcing the employee to quit. For example, if the employer makes changes to the employee’s terms and conditions of employment that result in a significant reduction in salary or a significant adverse change in such things as the employee’s work location, hours of work, authority, or position, that employee may be forced to quit. Constructive dismissal may also include situations where an employer harasses or abuses an employee. If an employer gives an employee an ultimatum to “quit or be fired,” and the employee resigns in response, this can be considered constructive dismissal. However, if a change in the contract becomes effective after reasonable notice of the change, then there is no constructive dismissal.

The advice of an experienced employment lawyer can be invaluable when you’ve been constructively dismissed from your job. The process is often difficult and confusing, which makes it all the more important to have someone on your side who knows what they’re doing and guiding you through every step with knowledgeable guidance!

Additionally, when constructive dismissal occurs, it’s essential to review your employment contract carefully, as many legal claims depend on the specific language used in the contract. Legal counsel can assist you in evaluating whether a violation has occurred and what your next steps should be under Ontario law.

Signs of Constructive Dismissal

• Evidence of reduction or elimination of salary, bonuses, commission, benefits, and entitlement

• Temporary lay off

• Scheduling or shift change that impacts hardship such as childcare, religious belief, obligations, affecting your personal life or work balance seems unfair or unreasonable

• Transfer to another department

• Demoted and responsibilities reduce

• Working in an unstable environment

Courts will also take into consideration harassment:

• Repeated yelling

• Repeated screaming

• The use of vulgar language

• Profane language

• Inappropriate insinuations

• A hostile work environment that results from continual use of foul language and abusive conduct constitutes a constructive dismissal

These elements can significantly alter the employee’s working conditions and may give rise to a valid claim, especially when such changes violate the employment contract.

Categories of Constructive Dismissal

• A new term introduced by the employer without notice and the consent of the employee

• The change will impact the employee’s job term

• If the employee refuses the terms of the employment contract

Ontario courts will assess whether the unilateral changes significantly alter the essential terms of the employment relationship. If so, the employee may be eligible for compensation, including a severance package, depending on the facts.

Does the Employer Have the Right to Make the Change?

A change in an employment contract will only constitute constructive dismissal if the employer did not have the right to impose it. The contract may give the company the explicit right to do so by “implied right” based upon the circumstances. It is only where that right does not exist that an individual may have a legitimate right to object. You must review any contract before you sign it.

Having an experienced employment lawyer review your contract before accepting changes—or even upon hiring—can prevent significant legal and financial issues later on.

How Can You Prove Constructive Dismissal?

In constructive dismissal cases, the onus of proof is on the employee to convince the Court that constructive dismissal is appropriate. For example, the employee can prove the employer had no right to change the employment contract. The employee can also prove that the employer’s conduct was the principal contributing factor that led the employee to leave the employment. They must demonstrate they had no other option but to leave the employment. Leaving the job is the last option.

A lawyer can help you compile the documentation and evidence necessary to support your claim and assess whether you may be entitled to a severance package under Ontario law.

What Happens If You Resign in Circumstances of Constructive Dismissal?

It is always best to seek professional advice before resigning. If the situation is akin to any of the above scenarios, you are entitled to claim compensation for constructive dismissal.

In Ontario, you may be eligible for both common law damages and statutory entitlements, which often include a severance package depending on your years of service, position, and age.

What Compensation (Damages) May I Seek for Being Constructively Dismissed?

You can get severance from your employer as a relief from constructive dismissal. You may also have a claim for compensation in the form of aggravated damages, punitive damages, or damages from a breach of statutes such as the Human Rights Code. The amount of severance you may be entitled to receive will rely on several factors, such as the contents of your employment contract, your age, your length of service, your position at the time of dismissal, and the availability of similar jobs in the market.

An experienced employment lawyer at Tailor Law can provide insight into whether you qualify for additional compensation beyond statutory minimums.

How to Make a Claim for Constructive Dismissal

You can file your claim two ways:

• Through the Ministry of Labour, which enforces the Employment Standards Act

• Through the courts, which implement the common law, which is the law that judges make

An employment lawyer can help you decide which path offers the best chance of success depending on your individual circumstances.

How Does Constructive Dismissal Work During COVID-19?

The government of Ontario made an emergency order that changed the rules for constructive dismissal due to COVID-19. As of March 21, 2020, you cannot claim constructive dismissal based on the Employment Standards Act for temporary cuts to your pay or hours of work because of COVID-19. You are said to be on a “deemed emergency leave.” These changes lasted until January 3, 2021.

Tips on How to Build Your Case

• Put everything in writing: When you reject a substantial change to your employment contract, do not only verbally tell human resources. Oral evidence is far less compelling

• Take contemporaneous notes: Whenever something relevant occurs, write it down and document the time and place it occurred. Do not wait till the end of the week to write down all the occurrences of that week. If you take notes right after the event has occurred and is fresh in your head, those notes will be more believable and effective in boosting your case

• Contact an employment lawyer: An experienced employment lawyer can assist you in taking the necessary steps. Trying to build a case for constructive dismissal with a lawyer still has risk. Doing it without the assistance of an employment lawyer is extremely risky

• Get moving: The number one mistake people make is they drag their feet. An employer will fundamentally change their employment contract, and the employee will not do anything for a variety of reasons. By doing nothing, you risk being found to have consented to the change. You typically will have more latitude in terms of speed in which you need to respond to a change in less obvious situations. An employee who has their pay reduced by 35% will typically have a concise window of time to answer. By contrast, an employee who is told they no longer report to the VP of Sales but the Director of Sales may have a bit longer to respond to the change.

Contact Us!

If you have been wrongfully terminated, contact an experienced employment lawyer to help get the justice and compensation you deserve. Employment law is complex, and it can be difficult to navigate on your own. A qualified lawyer will know the ins and outs of the system and how best to represent your case. Don’t let your employer get away with wrongful termination—call Tailor Law today for a free consultation. We can review your employment contract, assess your entitlement to a severance package, and support you through every step of your claim.