Constructive Dismissal Disputes

In Ontario, employers generally have some room to make changes to an employee’s duties and responsibilities, because a business needs to be properly managed and to adapt to changing market conditions. Employers are usually expected to provide reasonable notice of the changes to the employee’s duties and responsibilities, especially when they may amount to substantial changes. Reasonable notice is assessed on the basis of various factors such as the employee’s position, age, and length of service with the company, and the availability of similar employment.

Constructive dismissal occurs when an employer unilaterally makes a substantial change to an essential term of the employment contract, or acts in a way that shows it no longer intends to be bound by the employment contract. The employee can then treat the employment as terminated and claim compensation, as in a wrongful dismissal. This gives employees a remedy when the substance of their role is substantially altered without their agreement and without reasonable notice.

Constructive dismissal can also occur through the employer’s conduct, for example where an employee has been harassed, treated inappropriately and abusively, or has experienced intolerable working conditions through workplace discrimination.

Changes Should Be Significant

Employers can make a reasonable reassignment of duties, as long as it is not significant enough to constitute a constructive dismissal. Where an employee’s job description allows for flexibility with regard to duties and responsibilities, it will be harder to show that the changes constituted constructive dismissal.

The changes to the contract need to be serious and sizeable and cannot be minor. Examples include negative changes to the terms of employment, made unilaterally by the employer without the employee’s consent, such as a significant reduction in pay or a significant negative change in work location, responsibilities/duties, or working hours. A layoff, even one intended to be temporary, may also amount to constructive dismissal if the employment contract does not allow it.

Employees Need to Act Promptly

Before making any decisions on how to proceed, it is always best to speak to an experienced employment lawyer who can point you in the right direction. When dealing with a constructive dismissal, it is important that the employee acts on these changes promptly, to ensure that their actions are not seen as “acceptance” of the changes.

If an employee continues to report to work, without making it clear that he or she does not accept the changes to the terms of employment, this can be construed as acceptance of these changes. Where an employee does not take steps to reject or oppose an amendment to the terms of employment, this may result in the employee later losing his or her right to claim constructive dismissal. An employee who has been constructively dismissed can treat the employment as ended and commence an action against the former employer, generally within two years. Resigning carries risk, however: if a court finds that the changes did not amount to constructive dismissal, the employee may be treated as having simply resigned. Under the Employment Standards Act, 2000, the employee must resign in response to the change within a reasonable period of time for it to count as a termination.

Demotion

A demotion occurs where an employee’s job rank is lowered. Where an employer cannot prove that there was “just cause” for the demotion, the courts may see this as a constructive dismissal. To determine if the demotion amounts to constructive dismissal, there will be an examination of the reasons for the change.

When an employee is offered a transfer to an alternative but lesser position, this may still constitute a constructive dismissal. Even where the change in responsibilities occurs gradually over a period of time, it may constitute a constructive dismissal if there is a substantial change in the duties.

When the demotion puts the employee in a position where he or she is unable to perform the role, this may amount to constructive dismissal. Also, a significant reduction in an employee’s salary, as a result of the demotion, can constitute a constructive dismissal.

If you have experienced a change in your duties/responsibilities and have questions or concerns related to that change and the possibility of constructive dismissal, contact an employment lawyer today to discuss your options.

Law Wise employment lawyers approach constructive dismissal issues with logical and creative solutions. We have the know-how to guide you through a constructive dismissal dispute. Each individual’s situation will be unique. Contact us to assess whether you have been constructively dismissed.

Call us at +1 647 948 7819 today!