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Constructive Dismissal Ultimate Guide

  What is Constructive Dismissal?

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This is the ultimate guide to Constructive Dismissal and a complete guide regarding suing for constructive termination.

Employment Law Constructive Dismissal happens when an employer unilaterally makes a fundamental change to a material term or condition of an employment contract. If you think you may have been treated unfairly, you might be considering suing for constructive dismissal. If you're thinking about doing this, you need to understand the language that was used when you were fired or being constructively dismissed.

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For an employer, a mishandled constructive dismissal claim will cost you dearly. For an employee, in a constructive dismissal case, you want to retain an experienced constructive dismissal lawyer to maximize your recovery.

As an employer or an employee, it makes sense to consult with constructive dismissal lawyers from time to time especially if you live in the Toronto area. Constructive dismissal Lawyer a phone call away! FREE Initial Consultation.

No-Win-No-Fee for constructive dismissal cases.

Questions to Ask a Constructive Dismissal Lawyer:

Questions to Ask a Constructive Dismissal Lawyer

Infectious Disease Emergency Leave (IDEL) expired on July 30, 2022. An employee on IDEL temporary layoff might be entitled to quit and claim constructive dismissal if not reinstated to the same position, duties, and pay he or she had before the pandemic. Click here to learn more about IDEL.

Click here to check out the wrongful dismissal ultimate guide - a dismissal claim for those who are wrongfully terminated by their employer.

 
What is Constructive Dismissal
1 - What is Constructive Dismissal

1 - What is Constructive Dismissal?

Constructive Dismissal COVID Announcement!!

Please note that laws related to layoffs, furlough have changed during COVID-19. Please click here to go to the COVID-19 page to learn more.

Constructive Dismissal - A Quick Summary

Constructive Dismissal - A Quick Summary

In employment law context, Constructive dismissal is defined as a contractual breach where an employer, by words or conduct, unilaterally makes a fundamental change to a material term or condition of an employment contract without obtaining the consent of the employee.

Constructive Dismissal are frequently tied to issues such as layoff, discrimination against disabilities. Constructive dismissal happens, ACT immediately!!

 

A Constructive Dismissal Toronto Lawyer can help. No-Win-No-Fee for constructive dismissal cases.

Constructive Dismissal Toronto Lawyer

Constructive dismissal may occur through substantial, unilateral changes to essential employment terms such as compensation (salary, benefits, or bonus), job responsibilities, reporting functions within the company hierarchy, working conditions, hours of work, the term of employment, or the employee’s location of work.

A constructive dismissal, in employment law context, might occur even if there’s no breach of a specific employment term in the employment contract; rather, constructive dismissal occurs where the employer’s overall conduct indicates it no longer intends to be bound by the employment contract, for example, by a series of actions that cumulatively makes the employee’s position intolerable.

You can claim constructive dismissal under both common law and under the Employment Standards Act (ESA). The ESA incorporates by reference the common law test for constructive dismissal.

Constructive Dismissal vs. Wrongful dismissal vs. Unjust Dismissal

Constructive Dismissal happens when an employer, by words or conduct, unilaterally makes a fundamental change to a material term or condition of an employment contract.

Wrongful dismissal is a similar yet completely different concept. Wrongful dismissal occurs when an employee is dismissed, or terminated, by their employer, WITHOUT just compensation. There are two types of wrongful dismissal claims:
 

 

  • Termination for Cause: Inappropriately dismisses an employee for cause and fails to pay any compensation.

Click here to learn more about Wrongful Dismissal.

Constructive Dismissal vs. Wrongful dismissal vs. Unjust Dismissal

Unjust Dismissal is completely different than Wrongful Dismissal or Constructive Dismissal. Unjust Dismissal is ONLY available to federally regulated employees under Division XIV - Unjust Dismissal of Part III of the Canada Labour Code. Click here to learn more about Unjust Dismissal.

Time is Of Essence In a Constructive Dismissal Case

Time is Of Essence In a Constructive Dismissal Case

The courts have generally given employees a reasonable time frame after the change to consider their options. If the employee fails to act within that time frame and treat the contract as terminated, the employee is deemed to have acquiesced to the change, and the claim of constructive dismissal is thus extinguished.

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Time is crucial, and if you wait too long, your prospects of collecting damages will be diminished, and you may even be prohibited from doing so by law.

Call a constructive dismissal lawyer to book a constructive dismissal lawyer consultation as soon as you suspect that you might have a claim of constructive dismissal. Call us now at 647-849-6582 or Contact Us if you have any questions or inquiries regarding constructive dismissal.

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Constructive Dismissal Examples

1. Unfair Performance Targets & Toxic Working Environment

​Unfair Performance Targets: Making it extremely difficult for a person to do his or her work successfully by expecting an employee to achieve unreasonable performance objectives is one of the most common reasons for constructive dismissal.

 

In a toxic workplace, the employer would typically micromanage the employee's daily tasks, pick on little mistakes, hide or minimize the employee's accomplishments, and require the employee to document everything he or she does.

All of these measures are intended to compel the employee to resign from his or her position so that the employer is not required to pay a severance package.

Constructive Dismissal Examples

2. Some Other Common Reasons for Constructive Dismissal

Constructive dismissal is highly fact-specific, and it necessitates a thorough understanding of the applicable employment laws. Here are some common examples of constructive dismissal:

  • Paying an employee wrong wages or lowering their pay without their consent or agreement.

 

  • Failure to pay a commission or altering the way a commission is earned without the employee's permission.

 

  • Significantly modifying an employee's job duties, responsibilities, or obligations without consent or agreement.

 

  • Unauthorized demotion of an employee

Common Constructive Dismissal Toronto Examples
typical constructive dismissal examples
  • Giving an employee an overburdened workload, which is likely to produce failure, stress, or anxiety.

 

  • Suspending an employee who DOES NOT have a temporary layoff provision in their employment contract.

 

  • Significantly changing an employee's working environment in such a manner that the employee's ability to perform their job successfully is seriously compromised.

 

  • Constant pressure or intimidation from supervisors, managers, or even other board members, making it very difficult, if not impossible, for the employee to carry out his or her work duties.

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How Do You Prove Constructive Dismissal?

Constructive dismissal discussion here only applies to non-unionized working environment. In unionized environments, collective agreements provide for employees’ rights and responsibilities, and union workers’ concerns are to be addressed through their unions and the grievance processes in place.

How Do You Prove Constructive Dismissal?

Whenever there’s any notable change in the working circumstances, employers often argue that NO fundamental breach of contract occurred and that they acted appropriately in accordance with the contract.

An Employee, on the other hand, will argue that a serious breach of the employment contract has occurred, compelling him or her to resign.

Before quitting your job and pursuing a claim for constructive dismissal, you should consider all of your options.

What an Employee Needs to Do to Prove Constructive Dismissal

What an Employee Needs to Do to Prove Constructive Dismissal

Employees must show that a breach occurred, while employers must show that this was not the case and that the resignation was voluntary. In any case, resigning is not something to be taken lightly. Before taking that final step, you should seek legal advice from an experienced constructive dismissal lawyer.

Each constructive dismissal claim is unique. The Court has found a case of constructive dismissal under the following circumstances:​

1. Subject an employee to a temporary layoff when the employment contract DOESN'T have a layoff provision allowing the employer to do so.

2. Altering the established work responsibilities of an employee substantially.

3. Significantly reduce an employee's salary, even if only temporarily, without the employee's permission.

successful constructive dismissal claims

However, please notes that the Court has NOT found a case of constructive dismissal under the following circumstances:​

unsuccessful constructive dismissal claims

​1. Dispute over the method for determining a bonus suggested by an employer.

2. An unpleasant working environment if the activity complained of does not, objectively, amount to harassment.

3. Suspend an employee until a substantial misconduct has been properly investigated.

4. The decision of the employee to withdraw from the employment contract for reasons unrelated to a fundamental change.

5. Change an employee's working hours to an earlier start time and punish an employee for insubordination for failure to comply.

The Legal Test for Constructive Dismissal – A Brief Summary

The Legal Test for Constructive Dismissal – A Brief Summary

Constructive dismissal arises when an employer, by words or conduct, unilaterally makes a fundamental change to a material term or condition of an employee’s employment contract.

When it comes to Constructive Dismissal, the employee has the burden of proof to showcase that the acts of the employer were in violation of the contract's provisions.

When an employer (1) unilaterally changes an express or implied term of an employment contract in a way that a reasonable person in the employee's shoes would interpret as substantially altering an essential term of the contract, or (2) when the employer otherwise acts in a way that would lead a reasonable person to conclude that the employer no longer intends to be bound by the contract, the employer commits a breach of contract, which allows the employee to consider himself or herself constructively dismissed and to seek monetary compensation accordingly.

A breach of an explicit term is usually easier to prove than a breach of an implied term.

 

A breach of an explicit term occurs when an employer cancels a contract's benefits, eliminates defined job responsibilities, imposes a pay decrease, imposes an arbitrary suspension, or fails to maintain safe working conditions.

 

A breach of implied conditions may be more difficult to prove, but any bad faith behaviour that destroys the employee-employer relationship of trust and confidence without good reason would most likely qualify.

first branch of constructive dismissal test

Under the first branch of the test, constructive dismissal may occur when essential employment terms such as compensation (salary, benefits, or bonus), job responsibilities, reporting functions within the company hierarchy, working conditions, hours of work, the term of employment, or the employee's location of work are changed significantly and unilaterally.

second branch of constructive dismissal test

Under the second branch of the test, no specific breach of employment terms is required; rather,  constructive dismissal occurs when the employer's overall conduct indicates that it no longer intends to be bound by the employment contract, for example, through a series of actions that cumulatively make the employee's position intolerable.

Constructive Dismissal FAQs

Related Constructive Dismissal FAQs:

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2 - Where to Sue for Constructive Dismissal & What's the Time Limit?

2 - Where to Sue for Constructive Dismissal & What's the Time Limit?

Choosing where to sue for Constructive Dismissal is always a source of great frustration.

It is critical that you hire a constructive dismissal lawyer in Toronto or an constructive dismissal lawyer near me to help you get through this difficult time as smoothly as possible. There are numerous legal forums to choose from when looking for where to sue for constructive dismissal.

2 - Where to Sue for Constructive Dismissal & What's the Time Limit?

Before claiming for damages, you MUST first decide whether you want to quit your job.

1. Quit To Sue For Constructive Dismissal

You MUST quit before you can sue for constructive dismissal. It’s a risky business. But if your employer's treatment of you amounts to a fundamental breach of contract (i.e. going to the root of contract formation), you are entitled to file a constructive dismissal claim against your employer in Court after you resign.

Quit To Sue For Constructive Dismissal

This fundamental breach is shaped by the explicit contractual terms, as well as the implied terms of relationship of trust and confidence between the employer and the employee.

The employee bears the burden of proof to demonstrate that the employer has breached the employment contract.

A breach "goes to the root of the contract" when it has the effect of depriving the innocent party substantially of the benefit he expected to receive under the contract, regardless of whether the party in breach intended to deprive the other of that benefit.

Resignation Letter or Notice to Employer

One of the most important steps for an employee who wishes to resign as a result of constructive dismissal is to inform the employer of the contractual breach. There cannot be a constructive dismissal if there was no fundamental breach of contract prior to the resignation.

Resignation Letter or Notice to Employer

While a resignation letter is not a prerequisite in filing a constructive dismissal suit, it is STRONG evidence that the employee quit due to the employer's serious breach of contract.

An employee who wishes to make a claim of constructive dismissal should include in their resignation letter a statement stating why they feel they have no choice but to resign.

It is also a good idea for an employee to give a thorough explanation of why they are quitting to the business.

A breach of contract can sometimes take the form of a series of events or activities.

 

Even if the most recent incident may not constitute a fundamental breach on its own, a series of occurrences or actions may be combined to create a fundamental breach.

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How Long Can An Employee Wait Before Quitting?

How Long Can An Employee Wait Before Quitting?

An employee must typically resign from his or her employment within a "reasonable" period following the employer's unilateral change of contractual terms to properly claim constructive dismissal.

If the employee does not resign within that time frame, the employee will be deemed to have acquiesced to the change.

The length of time an employee has to decide whether or not to accept the change varies depending on the kind of change that triggered the employee's right to claim constructive dismissal and the employee's specific circumstances.

An employee whose salary has been significantly reduced, for example, may be compelled to make a quick decision.

An employee whose job duties have been significantly altered, on the other hand, would most likely have more time to try out the new role before being compelled to make a definitive decision.

time limit to claim constructive dismissal

The Obligation of a Constructively Dismissed Employee to Accept Re-employment

rehired.png

Existing law in Ontario says that if the new employment contract is fundamentally different than the original one, the employee has no duty to accept the "re-employment."

The most essential question is whether or not the new alternative employment is substantially similar to the original one.

If an employee is forced to accept a 30% pay cut or is demoted from a managerial position to a clerical one, the "re-employment" is unlikely to be substantially similar in the eyes of the Court.

2. Do I have to Quit My Job to Claim Damage?

2. Do I have to Quit My Job to Claim Damage?

You are not obliged to leave your employment in Ontario before making a claim for damages.

While you're still working, you may file a complaint to one of the administrative tribunals. It makes no difference whether you quit your job, as long as you submit the complaint within the time period.

You may submit a complaint with the Workplace Safety and Insurance Board (WSIB), the Human Rights Tribunal of Ontario (HRTO), or the Ministry of Labour (MOL).

you must Quit To Sue For Constructive Dismissal

However, before bringing a Constructive Dismissal case in Small Claims Court or Superior Court, you MUST resign.

3. Legal Venuses Available and Time Limit to Sue

The following are the various legal venues accessible to workers who have been constructively dismissed:

Time Limit to File Complaint: 6 Months within the Incident

Limitation: Only available for certain type of cases.

Workplace Safety and Insurance Board

Under the Workplace Safety and Insurance Act (WSIA), an employee’s civil claim for constructive dismissal that is based on an allegation of workplace harassment may be statute barred in some situations making WSIB the only available legal forum.

Please read the article below to learn more:

WSIB is the forum of choice for many. Section 13 of the WSIA provides for entitlement under the insurance plan for chronic mental stress and traumatic mental stress, where a worker is entitled to benefits under the insurance plan for qualified mental stress arising out of and in the course of the worker’s employment. In these cases, the worker is entitled to WSIB benefits as if the mental stress were a personal injury by accident.

Click here to learn more about how to file a complaint to WSIB.

Time Limit to File Complaint: 12 Months within the Incident

Limitation: Only available for certain type of cases.

Human Rights Tribunal of Ontario

In Ontario, the Human Rights Code (The Code) expressly prohibits workplace discrimination and workplace harassment because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sexual orientation, gender identity, gender expression, age, record of offences, marital status, family status or disability. But HRTO will only entertain discrimination and harassment based on protected grounds, mentioned above.

Click here to learn more about how to file a complaint to the HRTO.

ministry of labour

Time Limit to File Complaint: 12 Months within the Incident

Limitation: Only available for certain type of cases.

You can claim under Occupational Health and Safety Act (OHSA) if you have been terminated in Reprisal for trying to enforce the rights protected by OHSA.

​OHSA requires employers to provide employees with a healthy and safe working environment that is free from discrimination in the workplace and harassment in the workplace. And an employee who is terminated by the employer for trying to enforce OHSA protections can file a reprisal complaint against the employer with the Ontario Labour Relations Board (OLRB).

Click here to learn more about how to file a complaint to OLRB for a reprisal complaint.

Time Limit to File Complaint: 2 years within the Incident

Limitation: Only available for certain type of cases.

You can file a claim to the Ministry of Labour, Ontario Branch, under the Employment Standards Act if you believe that your employer is owing you wages. Do note that if you claims includes claims for workplace harassment, then a ESA claim is probably not for you.

Click here to read more about what’s your protection under the ESA.

Click here to learn more about how to file a complaint to Ministry of Labour.

Time Limit to File Complaint: 2 years within the Incident

Advantage: Much higher damage rewards as compared to other forums, almost all types of cases can be filed to the Court.

Disadvantage: Slow & Costly, and if you lose, you have to pay for the legal fee of the other side. In addition, you MUST quit your job before suing for Constructive Dismissal in Courts.

ontario court of justice

The filing of a constructive dismissal action in Court is reserved for the most serious cases, where the damages awarded in one of the other administrative tribunals listed above are inadequate.

Or if your circumstance WILL NOT fit into any of the other tribunals, you will be forced to take the matter to Court.

Unfortunately, we have encountered far too many instances when an employee has no option but to bring a constructive dismissal lawsuit in Court since the deadline to file in one of the respective statutory forum has expired.

The majority of cases filed with the Court system will be settled at the mediation / settlement stage to reduce cost.

Whether your lawsuit is tried in Small Claims Court or Superior Court is determined by the amount of damage you seek.

 

In Ontario, the maximum amount you may sue your employer in Small Claims Court for constructive dismissal is $35,000. If the amount is more, you must take the matter to the Superior Court.

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Constructive Dismissal FAQs

Related Constructive Dismissal FAQs:

 
Why You Need A Constructive Dismissal Lawyer?
3 - Why You Need A Constructive Dismissal Lawyer?

3 - Why You Need A Constructive Dismissal Lawyer?

If you've been the victim of constructive dismissal, you're not alone. While this time in your life may be terrifying, a Toronto constructive dismissal lawyer can work with you to help you fight back and take control of your life once again.

Why You Need A Constructive Dismissal Lawyer Toronto

Constructive dismissal happens often, and proving that you were compelled to resign is our goal. We'll work with you to understand your career situation, and talk about what happened that forced you to quit and sue for constructive dismissal. We'll go over the issues that you may have had at work, how they were handled, what circumstances led to your constructive dismissal.

Usually time is of the essence in an employment law constructive dismissal case. If the employee fails to act within a reasonable amount of time and treat the contract as terminated, the claim for constructive dismissal will be extinguished. An experienced constructive dismissal lawyer will likely prove a make-it-or-break-it move in many constructive dismissal suit.

We'll examine the circumstances of your employment and work with you to discover how your employer violated employment law and /or breached the employment contract that compelled you to resign. It's key to give us as much information as possible so that we can build a strong case against your former employer.

We are often able to settle out of court as we can show your employer that he or she did something unlawful. This may result in your employer giving you a settlement or reinstating your job. We'll handle the back-and-forth negotiations needed to get you what you deserve.

constructive dismissal consultation
constructive dismissal support

We understand that going through a constructive dismissal in Toronto can be heartbreaking, and we're here to help you regain your life by carrying out the necessary actions. You know your employer should have breached the contract, but confronting your employer on your own may be stressful. We have the resources to put you on equal footing with corporate behemoths.

If you've are a victim of constructive dismissal, it's essential that you reach out for help ASAP. You DON'T have to fight this alone. Don't wait!! Time is of the essence.

 

No-Win-No-Fee for constructive dismissal cases. Call us now at 647-849-6582 or Contact Us Now if you have any inquiry regarding constructive dismissal or you want to book an appointment with us for a no obligation constructive dismissal lawyer consultation.

 
4 - How Employment Lawyer Consultation Works

4 - The HTW Law – Employment Lawyer Approach

HTW Law - Employment Lawyer is a full-service employment law firm in Toronto that also offers employment law services near me to residents of various communities.

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Core Beliefs at HTW Law – Employment Lawyer

HTW Law - Employment Lawyer Core Beliefs

At HTW Law - Employment Lawyer, we believe in taking a client-centered approach and are dedicated to developing long-term relationships with our clients while providing employment law services and practical legal advice tailored to their specific needs.

We value every client who visits our employment law Toronto office, even if it is just for a lawyer consultation with an employment lawyer. Our clients aren't just file numbers or cash register receipts; they're living, breathing people in our minds and hearts.

We are not a personal injury firm that also practices employment law because we think it is profitable. We like helping people, which is why we founded HTW Law.

No one at our firm will put a client under pressure to settle an employment law case quickly so that we can laugh all the way to the bank, nor will we make up a plethora of fees and charges and bill you as "out-of-pocket costs."

success stories of HTW Law - Employment Lawyer

We are passionate about employment law and keep ourselves up-to-date by attending seminars, conferences, and staying current on employment law cases and legislation.

We want you to succeed in your employment law litigation because we believe that word-of-mouth advertising based on your success stories is the most effective form of advertising.

It's simple. Good employment law Legal Services = happy client.

The HTW Law – Employment Lawyer Advantage

HTW Law – Employment Lawyer Advantage

At HTW Law – Employment Lawyer, we provided free employment law consultation to employees in need, and we offer no-win, no-fee counsel in qualified employment law cases, which means that we don't get paid unless and until you get paid. You can rest assured that you are in capable hands, especially given that our success is dependent on your recovery.

We are well-versed in employment laws and human rights laws and have extensive experience in various aspects of employment law practice at HTW Law - Employment Lawyer.

If you have been a victim of workplace harassment, workplace discrimination, age discrimination, disability discrimination, marital status discrimination, or other forms of discrimination prohibited by the Human Rights Code, we can MAKE SURE that the human rights issues are properly addressed in addition to your severance pay, constructive dismissal or wrongful dismissal claims.

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HTW Law - Employment Lawyer has the necessary professional expertise to successfully protect your employment rights. At HTW Law – Employment Lawyer, we have a team of medical professionals, accountants, and other experts at our disposal to produce medical reports, financial reports and damage assessments for you when your employment law litigation calls for it.

Experience

Experience counts, and we are prepared to go to court if a resolution cannot be achieved.

Client-Orientated

We listen. And from listening to your needs and wants, we formulate our legal approaches.

Full Range Service

We are a full-service employment law firm. We'll take care of it if it is employment law related.

Experience

We know how much your case is worth based on our experience and previous Court judgments in similar situations, and we'll work hard to get you there while paying attention to your needs and desires.

We Care for You

We understand how tough it is for you to lose your job. We will offer you with confidence, respect and support in a relaxing environment. A kind gesture, a cup of coffee, or something trivial can sometimes be the missing link in rapport building.

FREE initial employment law consultation with an experienced employment lawyer for qualified employment law cases!! We handle sensitive employment law clients’ information with care. Call us now at 647-849-6582 or Contact Us Now if you have employment law questions or inquires or want to book an appointment for an employment lawyer consultation.

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5 - The Legal Test for Constructive Dismissal

5 - What is Termination Without Cause - Wrongful Dismissal?
Contractual Repudiation – The Legal Test for Constructive Dismissal

What is Contractual Repudiation

The concept of constructive dismissal originates from the contract law concept of contractual repudiation. Contractual Repudiation occurs when one party, by act of conduct, either explicit or implied, indicates "an intention to abandon or refuse performance" of an employment contract.

It’s a fact-driven question, requiring one to look at the actual evidence to determine whether the party’s actions indicate that he or she no longer intends to continue with the contract. Thus, many constructive dismissal cases are decided on purely factual grounds.

What is Contractual Repudiation

A party who attempts to exercise rights he or she does not have under the contract will generally be taken to have repudiated. For the same token, if the party’s actions amount to an attempt to impose new terms or conditions upon the other party, then this may amount to repudiation.

Distinction between Contractual Repudiation and Breach of Contract

Repudiation may occur before the time for performance has arrived (anticipatory breach), at the time for performance, or after performance has commenced.

A Breach of Contract occurs when there’s non-performance or defective performance at the time performance is due. The remedy for a breach of contract is an action for damages, and, if the breach "goes to the root of the contract", termination of the contract at the election of the innocent party.

The Legal Test for Constructive Dismissal

The Legal Test for Constructive Dismissal

A constructive dismissal arises when, although there is no formal dismissal, an employer’s conduct establishes an intention to no longer be bound by the employment contract.

An employee is generally only successful on a constructive dismissal claim if he or she can prove, on an objective assessment, that the impugned change to the employment contract was unilaterally imposed by the employer, that the employee did not accept or condone the change, and that the change was significant.

supreme court of canada

In its landmark ruling of Potter v New Brunswick Legal Aid Services Commission, 2015 SCC 10, the Supreme Court of Canada cited the Court’s leading authority on constructive dismissal, Farber v Royal Trust Company, [1997] 1 SCR 846, and confirmed there are two branches for constructive dismissal claims:

1. The employer unilaterally makes a fundamental or substantial change to a material term or condition of an employee’s employment contract (“Branch # 1”).

 

2. The employer’s cumulative acts or conduct, taken together, demonstrates that the employer no longer intends to be bound by the contract (“Branch # 2”).

BRANCH # 1

Branch # 1 of the test for constructive dismissal entails a two-step analysis (Potter, at para. 37)

branch 1 of the constructive dimissal test prong 1

1. The employer’s unilateral change must be found to objectively breach an express or implied term of the employment contract.

 

  • This is the objective element of the Branch # 1 analysis

 

  • “[T]o qualify as a breach, the change must be detrimental to the employee.”.

 

  • “If an express or an implied term gives the employer the authority to make the change, or if the employee consents to or acquiesces in it, the change is not a unilateral act and therefore will not constitute a breach.”

branch 1 of the constructive dimissal test prong 2

2. The employer’s breach must substantially alter an essential term of the employment contract. The question to ask is whether “at the time the [breach occurred], a reasonable person in the same situation as the employee would have felt that the essential terms of the employment contract were being substantially changed” (Farber, at para 26)

 

  • This is the subjective-objective element of the Branch # 1 analysis

 

  • “A breach that is minor in that it could not be perceived as having substantially changed an essential term of the contract does not amount to constructive dismissal.” (Potter, at para. 39)

BRANCH # 2

Under Branch # 2 of the test for constructive dismissal, the employee is not required to point to any specific substantial change to a material term of employment. Rather, the question is whether the employer’s course of conduct, viewed in light of all of the circumstances, “would lead

a person to conclude that the employer no longer intended to be bound by the terms of the contract”. Such a course of conduct “amounts cumulatively to an actual breach”. (Potter, at para. 42)

 

The second branch of the constructive dismissal test is similar to that of step two of Branch # 1 in that the perspective is a subjective-objective one. In another word, either a single incident that’s very serious in nature or a series of incidents that are not serious on its own, but cumulatively is very serious.

how to prove constructive dismissal

A constructive dismissal will be established if the requirements of either branch are met. The onus is on the employee to establish a constructive dismissal on a balance of probabilities.

 

As the Supreme Court observed in Potter, in each case, determining whether an employee has been constructively dismissed is a “highly fact driven exercise” in which the court must determine whether the changes are reasonable and whether they are within the scope of the employee’s job description or employment contract.

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What Employer's Conduct Amounts to a Constructive Dismissal?

What Employer's Conduct Amounts to a Constructive Dismissal 1

 

  • Suspension without Pay, especially when the employer suspend employee prematurely without any proper investigation into misconduct being conducted. See e.g. Filice v. Complex Services Inc., 2018 ONCA 625.

What Employer's Conduct Amounts to a Constructive Dismissal 2
What Employer's Conduct Amounts to a Constructive Dismissal 3
  • Employer's Unilateral Change of Oral Promise on work arrangements, particularly if the oral promise was honoured for a long time prior to the unilateral change. See e.g. Hagholm v. Coreio Inc., 2018 ONCA 633. 

 

  • Poisoned work environment / Failure to maintain a healthy and safe Working environment. See. e.g. Colistro v. Tbaytel, 2019 ONCA 197.

 

Please read the following post to learn more about successful consecutive dismissal cases in recent years:

 

Successful Constructive Dismissal Cases In Recent Years

What Employer's Conduct DOES NOT Amounts to a Constructive Dismissal?

What Employer's Conduct DOES NOT Amounts to a Constructive Dismissal 1
  • Disagreeing with employer’s proposed formula for calculating a bonus is not necessarily constructive dismissal, when formula was not stipulated in the employment contract. See e.g. Chapman v. GPM Investment Management, 2017 ONCA 227.

 

  • An unhappy work environment is not necessarily constructive dismissal if, objectively speaking, the conduct complained of does not rise to the level of harassment. See e.g. Lemesani v. Lowerys Inc., 2017 ONSC 1808.

  • Suspending an employee pending an investigation into substantial misconduct is not necessarily constructive dismissal. See e.g. Pierro v. Hospital for Sick Children, 2016 ONSC 2987.

 

  • An employee's decision to resign for reasons unrelated to a fundamental change to the employment contract does not entitle him or her to damages for constructive dismissal. See e.g. Persaud v Telus Corporation, 2017 ONCA 479.

What Employer's Conduct DOES NOT Amounts to a Constructive Dismissal 2
What Employer's Conduct DOES NOT Amounts to a Constructive Dismissal 3

Interplay Between Employment Contract Amendment, Constructive Dismissal and Wrongful Dismissal

According to Wronko v. Western Inventory Service Ltd., 2008 ONCA 327, when an Employer attempts to amend an employment contract containing terms disadvantageous to the employees, the employees have three options:

  1. Accept the change in employment contract;

  2. Reject the change and sue for constructive dismissal; or

  3. Reject the new term and insisting on the original terms of employment.

If an employee has accepted the new contractual conditions, he or she cannot resign and claim constructive dismissal.

no claim for constructive dismissal if agree to change to employment contract

An employer may NOT compel an employee to accept contract modifications without providing sufficient consideration.

 

New contractual modifications may be unenforceable due to a lack of consideration. In a wrongful dismissal case, only legal and enforceable contract amendments will be examined in addition to the original contract conditions in existence at the time of contract formation.

Kohler Canada Co. v. Porter

In Kohler Canada Co. v. Porter, 2002 CanLII 49614 (Ont SCJ), the Ontario Superior Court stated:

 

[c]ontinued employment, without anything more of value passing to an existing employee, is not consideration for a new promise disadvantageous to the employee.”

 

Kohler at para. 31.

ESA Constructive Dismissal

ESA Constructive Dismissal

Under Section 56 (1)(b) of the Employment Standards Act (ESA), an employer is deemed to have terminated an employee, for the purpose of the ESA, when he or she constructively dismisses the employee, and the employee resigns.  

 

The employer is then liable to pay the employee ESA termination pay and ESA severance pay (if appliciable) under Part XV of ESA. Unpaid salary, vacation pay, and other benefits should be included in the severance package as well.

 

The ESA incorporates by reference the common law constructive dismissal test to determine whether someone has been constructively dismissed.

Temporary Layoff

Temporary Layoff

An employee is on temporary layoff when an employer reduces or eliminates his or her job without terminating the employment.

The absence of a recall date by the employer when laying off an employee does not always imply that the lay-off is not temporary.

It should be noted, however, that a layoff, even if intended to be short, may result in constructive dismissal if it is not permitted under the employment contract.

Service Areas

Common Law Temporary Layoff

Common Law Temporary Layoff

There is no particular rule under common law for temporary layoff.

A temporary layoff, or any kind of job reduction or suspension, may be regarded as contractual repudiation under common law, and therefore trigger the common law constructive dismissal test.

Please see the preceding section "What Employer's Conduct Amounts to a Constructive Dismissal?" for information on instances concerning laying off an employee where there is no right to do so under the employment contract.

ESA Temporary Layoff

Employment Standards Act

For the purposes of the ESA's termination provisions, a "week of layoff" is defined as a week in which the employee earned less than half of what they would normally earn in a week.

A layoff week does not include any week in which the employee did not work on one or more days because the employee was unable to work, was subject to disciplinary suspension, or was not supplied with work due to a strike or lockout at their place of employment or elsewhere.

Employers are not obliged under the ESA to give workers with written notice for a temporary layoff, nor are they required to offer a cause for the layoff. But an employer might be required to so under the collective agreement or employment contract.

Under Section 56 (1)(c) of Employment Standards Act (ESA), a "temporary layoff" is allowed, if there’s a “temporary layoff” provision in the employment contract.

Under Section 56 (2), for a non-unionized worker, a “temporary layoff” is:

(a)  no longer than 13 weeks in any period of 20 consecutive weeks; or

(b)  more than 13 weeks in any period of 20 consecutive weeks, but less than 35 weeks in any period of 52 consecutive weeks and, the employee continues to receive some benefits or payment from the employer.

An employee will be entitled to ESA termination pay and ESA severance pay if an employee is deemed to have been terminated under Section 56 (1)(b) of the ESA (constructive dismissal clause) or under Section 56 (1)(c) of the ESA if an employee is laid off for a time longer than the period of a temporary layoff.

ESA constructive dismissal entitlements