Why Constructive Dismissal Claims Don’t Always Succeed in Ontario

Date: January 29, 2026

Summary:

Constructive dismissal cases are hard to win in Ontario because, unlike in wrongful dismissal cases, the onus is on employees to prove a fundamental change to the terms and conditions of their job and that they acted in a timely fashion.

Key Take-Aways:

• Constructive dismissal claims are not about unfair termination, but about an employer committing a fundamental change to an employee’s job
• Ontario courts apply a high legal standard when deciding these claims
• Employees are required to take timely action to protect their rights by protesting the significant changes that were made without consent
• In some cases, an employee’s decision to resign or continue working in altered work conditions can undermine the claim
• Many employees lose cases due to insufficient evidence, overestimating the significance of changes to their job, or timing issues
• A constructive dismissal claim should generally be considered as a last resort as it is a risky option for employees to pursue when contesting work-related disputes. As such, it should only be made after consulting with a constructive dismissal lawyer.
• Early advice from an experienced Ontario employment lawyer can help assess whether a constructive dismissal claim is legally viable

Many employees assume that an unfavourable changes to their job, such as a pay cut or change in their job title, automatically amounts to constructive dismissal. In reality, Ontario employment law sets a high bar.

When dealing with constructive dismissal claims, the courts in Ontario closely analyze whether the employer fundamentally altered the employment relationship and whether the employee responded appropriately. As a result, even situations that feel clearly unfair may fail to meet the legal test for constructive dismissal.

This article does not address whether a particular workplace change qualifies as constructive dismissal in isolation, but rather discusses why many claims fail even when employees believe a particular change is significant.

As Sezar Bune, employment lawyer and founder of Bune Law, explains:

“If your job is changing in ways that feel unfair, it’s important to speak with an employment lawyer before resigning or claiming constructive dismissal. A lawyer can carefully review your situation, explain whether your case meets the test for constructive dismissal, and help protect your rights, potentially affecting the outcome of your claim.”

What Makes Constructive Dismissal Cases Harder to Win?

To succeed in a constructive dismissal claim, employees are required to prove that an employer made a fundamental and unilateral change to an essential term or condition of employment, or otherwise demonstrated an intention not to be bound by the employment contract. This is a strict test that is determined by the facts and evidence in each case .

In my experience dealing with employment litigation disputes, particularly when reviewing legal research on caselaw, constructive dismissal claims usually fail because the change complained of by an employee does not meet this legal threshold or because the employee’s response undermines the claim. 

The Legal Standard Employees Must Meet

To succeed in a constructive dismissal claim, an employee must prove one of two legal tests recognized by the Supreme Court of Canada’s decision in Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10:

1. A unilateral and fundamental change to an essential term of employment (such as pay, duties, hours, or reporting structure), or

2. A course of conduct by the employer that shows an intention not to be bound by the employment contract (i.e., not follow its own requirements in the contract).

For a full explanation of what constitutes constructive dismissal in Ontario, see our detailed guide here.

What Counts as a “Fundamental Change” to Employment?

Not every negative workplace change qualifies as constructive dismissal. In fact, Ontario employment law distinguishes between a minor, inconvenient change to an employee’s terms and conditions of employment, as opposed to a significant, negative, and unilateral change made by an employer without consent that strike at the heart of the employment contract.

In other words, the operative words are: “significant”, “negative” “unilateral” changes to an employee’s job.

In my experience as an employment lawyer dealing with constructive dismissal cases, the job changes may qualify if they are significant and made without consent:

• A reduction in compensation
• Unpaid suspension
• A demotion or material loss of responsibility, prestige or authority
• Refusal to pay an employee’s salary, bonus or commission
• Forced job relocation
• Change in reporting structure 
• Temporary layoff
• Substantial changes to work hours or schedule

Examples that usually do not qualify when minor in nature:

• Personality conflicts with management
• Increased workload without other changes
• Temporary changes or minor adjustments
• Workplace harassment or discrimination
• General dissatisfaction with workplace culture (where there is no workplace harassment or discrimination)

This distinction is one of the most common reasons constructive dismissal claims fail.

Signs Of Constructive Dismissal In Ontario

• Your employer significantly reduces your pay or benefits
• Your job duties and responsibilities are changed dramatically
• You are demoted to a lower-level position without consent
• Yours work hours or location are changed significantly
• You are placed on a temporary layoff
• You are facing extreme workplace harassment (poisoned or hostile work environment)

If you experience many of these changes at once, it may increase the strength of a constructive dismissal case.

Condonation: Why Timing and Employee Response Matter

Even where an employer implements a fundamental change to an employee’s job without permission, how an employee responds can sometimes make or break the claim.

Generally, court cases establishes that employees should object clearly to the change (protest). However, the decision to object to the change must be reasonable and not made without proper consideration.

In other words, to claim constructive dismissal, an employee is allowed a “reasonable period” to test out the new conditions before taking the radical step of resigning and claiming constructive dismissal. How long? There is no clear-cut rule, and the duration varying based on the type of change and personal circumstances.

Based on my experience helping employees with constructive dismissal claims, this “reasonable” trial period is one challenging aspect that carries key risk for employees. Why? Because the longer an employee continues to work in the altered changes, the greater the likelihood a court rule they condoned the change (an implicit acceptance of the change complained of by an employee), making it hard to succeed with a constructive dismissal claim. As one court put it in Belton v. Liberty Insurance Co. of Canada, 2004 CanLII 6668:

“The vulnerability of employees who believe they may have been constructively dismissed and the difficulty of making the life-altering decisions they face must be recognized. Allowing employees reasonable time to assess the new terms before they are forced to take an irrevocable legal position not only addresses their vulnerability, but also promotes stability and harmonious relations in the workplace.”

Common Reasons Constructive Dismissal Claims Fail

In handing constructive dismissal cases when representing employers, I have typically found that unsuccessful constructive dismissal cases usually fail for predictable reasons, including:

• The change complained of did not amount to a significant or fundamental alteration of employment terms, reflecting a common divergence between an employee’s subjective assessment and the law’s objective standard

• The employer implemented changes with the employee’s consent in an employment contract

• The employee waited too long before protesting or objecting to the changes

• There was insufficient documentation or evidence to prove the employer unilaterally made changes that were significant and negative 

• The employee overestimate the nature or severity of the change to the terms and conditions of their job (such as a minor pay cut)

Put simply, a constructive dismissal claim is highly fact-specific, and small details often determine the outcome.

Frequently Asked Questions about Constructive Dismissal in Ontario

What qualifies as constructive dismissal in Ontario?

Constructive dismissal occurs when an employer unilaterally makes a significant and negative to an essential term of employment without consent, or otherwise behaves in a way that shows they no longer intend honour their obligations under the employment contract.

Can I stay working and still claim constructive dismissal?

Only for a “reasonable time.” To ensure a better chance in succeeding with a constructive dismissal claim, employees must object to significant and unilateral changes by an employer and resign within a reasonable period, or the court may find they accepted the change.

However, it is extremely important for employees to first speak with an experience constructive dismissal lawyer before resigning, as if if they are unsuccessful, a court would view the resignation as voluntary (forfeiting their legal rights to financial compensation, including a severance package).

Is a toxic work environment constructive dismissal?

In most cases, severe workplace harassment or discriminating that results in a toxic, hostile or poisoned workplace can amount to a constructive dismissal. 

Do I need to quit to claim constructive dismissal?

Not right away, but timing is essential. Waiting too long may amount to an implicit acceptance of the changes (condonation), but quitting too early may amount to a voluntary resignation, defeating a constructive dismissal claim. However, at all times, it is important not to quit without legal advice from an employment lawyer.

Written by: Sezar Bune, J.D. | Toronto Employment Lawyer

With over 12 years of experience advising employees and employers, Sezar practices in all workplace disputes, including wrongful dismissal, constructive dismissal, severance packages, and employment contracts.

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