What is a Constructive Dismissal in Ontario Employment Law?

In Ontario, a constructive dismissal occurs when an employer makes a significant change to an employee’s job terms of employment, working conditions or employment contract without the employee’s consent. Specifically, the change to the employee’s job must be so significant that it essentially amounts to a termination of the employment relationship, or otherwise made the employee’s working conditions so objectively intolerable that they employee has no choice but to resign (which is a risky decision to take without the guidance of an employment lawyer). Interestingly, a constructive dismissal means employment came to an end even though the employer did not formally terminated the employee’s employment (such as by providing them with a termination letter and severance package).

What are some examples of a constructive dismissal?

A constructive dismissal can take place in many different ways, and if such change is significant and without an employee’s consent, can provide an employee with a legal right to challenge an employer. This can include, for example, an employer:

reducing an employee’s hours of work
changing an employee’s work location
demoting an employee without good reason
unpaid temporary layoff
unpaid administrative suspension
failing to pay an employee their full wages or benefits
changing an employee’s job duties or responsibilities in a way that the job is different from what the employee was originally hired to do
workplace harassment, bullying, intimidation, toxic work environment or discrimination

If an employee believes they have been constructively dismissed by their employer, they may have the right to pursue a legal court claim against their employer, which is called a constructive dismissal claim. Among other things, a constructive dismissal claim allows an employee to sue their employer to recover damages, including compensation for severance pay and benefits.

However, not all changes to an employee’s terms of employment and working conditions result in a constructive dismissal. In fact, the courts have said whether an employee is justified in refusing a change to their job, protesting and resigning from their employment, will always depend on the specific facts of every case. If an employee is unable to prove to a court that the change(s) made by the employer was so significant that it amounted to a constructive dismissal claim, the employee will generally be found to have voluntarily quit, leaving them without a job or any entitlement to receive a severance package. For this reason, it is important for employees to always seek legal advice from a leading employment lawyer if they believe they have been constructively dismissed.

How do I prove a Constructive Dismissal?

In order to prove a constructive dismissal, an employee must prove that:

the changes made by the employer were so significant that they fundamentally altered the terms of the employment relationship
the employee did not consent to the changes
the employee did not have any other reasonable option but to resign
the employee must first undergo a “try out” period to allow themselves a reasonable opportunity to assess the change(s) before they are forced to agree to them or take the position that they were constructively dismissed

If an employee successfully proves that they were constructively dismissed, a court may award them damages for lost salary and all other compensation (e.g., bonus pay, health benefits, pension benefits, and so on). In some cases, an employee may also be entitled to additional compensation for an employer’s unfair conduct, including emotional distress caused by a constructive dismissal.

While Ontario employment law is complex and always changing, proving a constructive dismissal is usually very difficult, risky and complicated. Among other things, it is not always clear (or easy to convince an employer or judge) that a change to an employee’s terms of employment or working conditions were significant, unacceptable, without consent or acquiescence. In every case, a court will consider the specific circumstances to determine if an employer’s actions resulted in a constructive dismissal, such as the nature and extent of the changes and the impact of those changes on the employee (e.g., remuneration, place of work, prestige and responsibilities of the job, work environment, and so on).

Contact Employment Lawyer Today

If you are an employer who is facing a constructive dismissal claim and need employer defence counsel for assistance or representation, or an employee who believes you have been constructively dismissed by your employer and you would like to know if you have the right to sue your employer for constructive dismissal, review your employment contract or negotiate a severance package, our experienced constructive dismissal lawyer at Bune Law can help. Contact us by phone 647-822-5492 or fill out the contact form to the side. We would be happy to assist in your employment law matter as quickly as possible.

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