Constructive Dismissal

An employee can be constructively dismissed if the employer changes a significant term of the employment without the consent of the employee. This does not mean that any change in the terms of employment constitutes constructive dismissal. Employees must expect reasonable disruptions in employment and are not entitled to a job for life in the place of their choice.

The doctrine of constructive dismissal is based on the principle that once a verbal or written contract of employment has been formed, neither party has the right to unilaterally change a significant term of that contract. Therefore, if the employer does make substantial changes to essential terms of the employment contract, the employer may be deemed to be terminating that contract. In such cases, if the employee leaves, he or she may be entitled to receive compensation for wrongful dismissal.

In order to determine whether an employee has been constructively dismissed, the court looks at a number of factors. One of the things that a Judge considers is whether an objective, reasonable person in the same situation as the employee would have felt that the essential terms of the employment contract were being substantially changed. It is not necessary to show that the employer acted in bad faith or intended to force the employee to leave.

Courts have found constructive dismissal where the employer has significantly decreased wages to the employee, made large changes in job content, working conditions, or transferred the employee to another geographical region. A small reduction in wages together with a demotion may also constitute constructive dismissal.

In addition, Courts do take note of whether the job change was made in good faith and in the best interests of the company. Such changes are unlikely to form the basis for a successful claim for constructive dismissal. Companies are allowed to make changes as long as they are genuine business decisions which are not calculated to denigrate or undermine the employees. Employees have no property rights to a particular set of job functions. An employer is not locked in to any particular arrangement with the employee. An employer is entitled to alter the employee’s duties to meet the needs of its business.

It is important to distinguish resignations from constructive dismissal. The essential element of a resignation is that it is voluntary. The employee makes the decision to leave. The reasons why are not as important as the fact that it is the employee who has voluntarily decided to end the employment relationship. However, a resignation submitted only in response to unfair actions taken by the employer, is in effect, a constructive dismissal.

To establish grounds for a finding of constructive dismissal, there must be evidence that the changes made by the employer put the employee in the position of having to accept, as a condition of continued employment, substantial changes to wages, or working conditions, or benefits which a reasonable person, informed of all the facts, would find to be unreasonable and unfair.

Brimage Icon

Did you know?

  • You can write conditions into your Will to change it in the event of “special circumstances” » Learn more
  • Keep your lawyer’s contact information on hand at all times just in case of a legal misunderstanding » Learn more
  • Before entering a business partnership it’s important that a partnership agreement is drafted by an experienced business lawyer » Learn more
  • If a “limitation period” passes with no actions taken you could miss out on the compensation you deserve » Learn more
  • If you are arrested or detained you have the right to be told why you have been arrested or detained » Learn more
  • Sole proprietorship, partnership and incorporation all have their advantages and disadvantages » Learn more
  • Update your Will with every major change to your life, family or finances » Learn more
  • Additional expenses in real estate transactions should be transferred via certified cheque from your bank for the exact amount » Learn more
  • Many lawsuits are settled before a trial begins » Learn more
  • In custody agreements it’s important to include grandparents’ visitation rights » Learn more
  • It’s very important to have all your documents completed properly and to have your case accurately and thoroughly stated » Learn more
  • Civil claims have set limitation periods so it is important to file as soon as possible » Learn more
  • Brimage Law Group is Norfolk County’s only law firm with dedicated business lawyers » Learn more
  • Always declare an alternative guardian for any minor children in case your first choice is unable to care for them » Learn more
  • When selling a property have the utility companies do the final readings to avoid contest » Learn more
  • When buying a property all documents (from both lenders and realtors) should be run by an experienced real estate lawyer » Learn more

Stay Connected

Keep on top of all the Brimage news, events, and discussions. Or better yet, join the conversation.

Brimage Law Group Logo