What Is Constructive Dismissal and How Can An Employment Lawyer Help You?

A constructive dismissal in Ontario occurs when an employee is forced to resign as a result of a unilateral change by the employer to a fundamental term of the employment contract. Examples include a significant cutting of an employee’s hours or wage, and creating a toxic or hostile work environment. In other words, if the employer changes your job to the degree that you are so unhappy that you are forced to quit, then you have been constructively dismissed.

Read more about constructive dismissal and the implications of COVID-19 in Ontario on our Constructive Dismissal page.

Constructive Dismissal in Ontario – Time is of the Essence

The timing of the forced resignation and declaration of constructive dismissal is essential to a successful claim. If you agree to the changes or you take steps to condone the change, your ability to make a successful claim for constructive dismissal could be impaired because the employer may successfully argue that you have accepted the change.

When your work conditions or compensation change drastically, it is wise to consider rejecting the change, keeping good records, and getting legal advice.

What is the compensation for constructive dismissal?

When constructive dismissal occurs, the employer is deemed to have indicated that they no longer intend to be bound by the terms of the employment contract. None of the terms of the contract will apply and the employee will be entitled to full severance pay through a wrongful dismissal claim. The amount of severance pay will be calculated based on a holistic accounting of the employee’s age, education, seniority, specialization, the availability of similar employment amongst other factors. Reasonable notice of termination at common law is often a much higher amount than the minimums stipulated in the Employment Standards Act (ESA).

What are 5 legitimate reasons for suing your employer for constructive dismissal?

1. A significant decrease in your compensation

A decrease in compensation, or your ability to earn commissions, will be considered valid grounds for constructive dismissal, so long as the change is not insignificant, and the change is a unilateral decision on the part of your employer.

2. A significant decrease in your working hours

Similarly, a significant decrease in your working hours can trigger a claim for constructive dismissal. The law understands that businesses have changing needs and not all changes in hours will justify such a claim. An employment lawyer will be able to tell which scenarios justify a claim for constructive dismissal.

3. A change to your place of work

A change in your place of work could trigger a claim for constructive dismissal, so long as there is a significant difference in the location of your workplace. For example, if the employer moves your regular office to another part of the city (or another city or province altogether) and your commute time is no longer tolerable.

4. A demotion in title, responsibilities or reporting relationships

A demotion in title, responsibilities, or reporting relationships can be considered a unilateral change of a fundamental term in your employment contract. For example, if you were a Vice President or Director and you have been demoted to a Manager, or if you previously had direct reports and now you have fewer reports or no reports at all, you may be able to make a constructive dismissal claim.

5. The creation of a hostile or toxic working environment

It is an implied term of any employment contract that you will be working in an environment that is free from hostility and harassment. Where such conduct takes place and your employer condones it, you may have a claim for constructive dismissal, as your employer has breached the implied term in your employment contract.

How an employment lawyer can help you claim constructive dismissal

An employment lawyer will assess the conduct of your employer and determine if you have a viable claim for constructive dismissal. An employment lawyer will know what factors are relevant in making such a claim and can undertake a holistic analysis of your situation. In some cases, an employment lawyer can help you remove yourself from employment where the terms are unjust, or the environment has been rendered toxic by the unilateral actions of your employer.

Employment lawyers at Monkhouse Law are experienced in constructive dismissal matters. If you believe you have been constructively dismissed it is crucial that you contact Monkhouse Law as soon as possible.

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