The Canadian Bar Association
Employment & Labour

Q&A: constructive dismissal from employment

By Paul Willetts

Q&A is a recurring series on the Vey Willetts LLP blog. The aim is to provide quick answers to questions we commonly encounter in our day-to-day practice of employment law. In this edition, we focus on constructive dismissal from employment.

Q. What is constructive dismissal?

A. Constructive dismissal is a legal concept that refers to any situation where your employer has made a unilateral and fundamental change to a term of your employment, such that your job has substantially changed as a result. By making this change absent agreement, your employer is deemed to have terminated your employment contract. 

Q. What types of changes may be considered a constructive dismissal?

A. There is no exhaustive list of the changes that will lead to a constructive dismissal. That said, some of the common forms that a constructive dismissal may take are:

  • a demotion;
  • a reduction in your total compensation (whether salary, commissions or bonus);
  • a change in your job location (i.e from Ottawa to Thunder Bay),
  • a significant increase (or decrease) in your hours of work; 
  • a substantial change in your organization's internal reporting structure; or
  • the creation of a toxic work environment (i.e. through persistent harassment).

Q. My boss is reducing my pay, is this a constructive dismissal?

A. Possibly. The answer to this question will likely depend on the amount of the reduction. For example, a minor reduction (i.e. 2 per cent) is unlikely to be considered "fundamental" and thus may not be viewed by a court as a constructive dismissal. On the other hand, a reduction in pay of 20 per cent or more would likely constitute constructive dismissal. As such, if your compensation is reduced, it is best to seek legal advice from an employment lawyer before taking any further steps. 

Q. I think I am being constructively dismissed, can I quit my job?

A. While in certain circumstances it may be appropriate, or necessary, to resign in response to an alleged constructive dismissal, these situations are relatively limited (i.e. where staying in the workplace the person will objectively experience hostility, embarrassment and/or humiliation). It is important to remember that affected employees bear the onus of proving that they were constructively dismissed. As such, in the event that a constructive dismissal is not found, and the person has already resigned, all that the individual will have done is quit a job and likely forfeited any severance entitlement they may have otherwise had.  

As such, this step should never be taken without first speaking with an employment lawyer.

Q. What compensation (damages) may I seek if I have been constructively dismissed?

A. If you have been constructively dismissed, you can likely seek severance from your employer. Also, in particularly egregious cases, you may also have a claim for compensation in the form of aggravated damages, punitive damages and/or due to breaches of statute such as the Human Rights Code

The amount of severance you may be entitled to receive will be based on a number of factors, including: the contents of any employment contract that you signed; your age; your length of service; your position at the time of the constructive dismissal; and the availability of similar jobs in the local market.

Read More at Vey Willetts LLP Blog

To Read More Paul Willetts Posts Click Here
Lawyer Directory
BICO: NEW AD TO ROTAE MONTHLY WITH BPFGToronto Lawyers AssociationMKD InternationalFeldstein Family LawLegal Print & Copy Inc.Fireman DayaBenson Percival Brown - Flat Box Ad Unit - 300x125Engel DUI