... speak with an employment lawyer regarding your potential constructive dismissal claim under Ontario employment law, such as...

When an employer officially terminates an employee from their employment, it can be in one of two ways:

For Cause – the employer believes the employee committed serious misconduct in the performance of their job that justifies “firing” them immediately – with no prior notice or severance compensation.
Without Cause – the employer does not have any specific reason for terminating the employee’s job – in fact, it may have no reason at all (as long as it is not the result of discrimination or unlawful reprisal).

In either of the above scenarios, if the employee believes their termination of employment was improper, he/she may be able to bring a claim against the employer for wrongful dismissal. Put simply, what this means is that the employee believes their termination of employment was “wrongful” in the sense that:

the employer fired them “for cause” with no prior notice/severance, and they were not justified in making that harsh decision; or
the employer fired them “without cause” but failed to provide them with their full severance entitlements under common law (i.e., they did not have an employment contract with a termination clause that legally limits their entitlements to only the minimums under the Ontario Employment Standards Act, 2000).

If successful in a wrongful dismissal claim, the employee would be awarded compensation (a severance package).

The key element in a wrongful dismissal claim is that the employer has made the official decision to terminate the employee’s job – and the issue is did it have cause for dismissal and, if not, did it provide the proper severance package the employee was entitled to receive.

By contrast, in a claim of constructive dismissal, the employer has not officially terminated the employee’s job. Instead, the employee believes the employer has conducted itself in such a way that it has effectively (but not officially) terminated his/her job by unilaterally changing a fundamental term or condition of their employment without their permission that has negatively impacted the employee.

Some examples where an employee believes they have experienced constructive dismissal include significant changes to their job in terms of

demotion (substantial changes to the employment contract such as imposing a downward change in the employee’s status)
fundamentally altering the employee’s reporting functions, job responsibilities or working conditions
pay cut
work relocation
unauthorized temporary layoff
workplace harassment or toxic work environment resulting from an employer decisions or actions relating to the employee’s job, such as a decision to change the work to be performed or the working conditions, to discipline the worker or to terminate employment
forced leave of absence
unilaterally changing an employee’s contract of employment from one of indefinite hiring to a fixed-term contract
requiring an employee comply with illegal directives, such as participating in an illegal activity
unfairly imposing a probation period on an employee, with a threat of dismissal if performance does not improve (i.e., not authorized in an employment contract)
forced retirement.

In such cases, the employee may be able to bring a claim of constructive dismissal against the employee. If successful, the employee would be entitled to receive compensation (severance package), just as with a successful wrongful dismissal claim.

However, it is important to note that the onus is on the employee to prove that an employer’s actions constitute constructive dismissal. The employee must prove on a balance of probabilities that the employer’s unilateral change to the employee’s terms or conditions of employment violated the employment contract, and that that conduct substantially changed the essential terms of the employee’s job.

Moreover, it is important for employees to seek the assistance of an experienced employment lawyer before taking any steps when facing a constructive dismissal situation at work. If unsuccessful in constructive dismissal claim, the courts will consider the employee to have voluntarily resigned, thereby forfeiting any rights he/she may have had for a severance compensation.

In making the determination of whether an employer’s conduct resulted in a constructive dismissal, the courts apply a strictly objective test:

(a) the employer’s unilateral conduct resulted in a significant change to the employee’s rights/entitlements in the employment relationship; and

(b) a reasonable person in the same situation as the employee would have viewed the breach as substantially altering an essential term of the employment contract – that is, that the employer’s conduct evinced an intention no longer to honour its obligations under the employment contract.

As illustrated above, whether an employee has a valid claim of constructive dismissal is an entirely fact-specific determination that a only a court is able to make.

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For employees, claiming a constructive dismissal is risky, and it is important to speak with an experienced employment lawyer for legal advice regarding your own work situation. For instance, if it turns out the changes to the terms of employment were not significant enough to amount to a constructive dismissal, the employee will be found to have voluntarily resign or abandoned their job, and therefore not be entitled to a severance package.

If you are an employee who would like to review your situation about a potential constructive dismissal case, contact us today for a consultation and review.

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