Constructive Dismissal
Most people are familiar with the concept of a wrongful dismissal and how it works.
Typically, the employer advises the employee that his/her employment is terminated and that they are to leave immediately. It is clear to everyone that the employment has been terminated. Less clear is a constructive dismissal, though the results are the same: employment is terminated.
A constructive dismissal occurs when the employer repudiates the employment relationship by demonstrating an intention to no longer be bound by it.
A constructive dismissal occurs when the employer repudiates the employment relationship by demonstrating an intention to no longer be bound by it. Typically, this involves a unilateral change by the employer to a fundamental term of an employee’s employment, without notice. A constructive dismissal can also occur if the employer treats the employee in such a manner that continued employment is intolerable for the employee.
The Ontario Court of Appeal has opined recently that in order to establish a constructive dismissal, the employee need not show both a unilateral and fundamental change going to the root of the contract and an employer’s intention to end the relationship.
When faced with constructive dismissal you have two choices.
When faced with your employer’s substantial action or inaction that triggers a decision, you have two choices: 1) accept the change to the employment or the employer’s conduct or 2) not accept the change or conduct, leave the workplace and assert a constructive dismissal. Obviously, the second option is the most risky as it is not a certainty that a Court will agree with you that you were the victim of a constructive dismissal.
Taking this second position is one-way street. You become unemployed and your income will be interrupted. You will likely have to wait possibly until trial, for the resolution. It is sometimes a defendant’s tactic to refuse to discuss settlement until the eve of trial even if they are in the wrong. In the interim, you are scrambling to find other work while maintaining litigation. Of course, there are situations that warrant removing yourself from the workplace regardless of the consequences. Equally, it may not be reasonable to accept the change or the employer’s conduct and so, you really do not have a choice.
Two common examples of constructive dismissal are a lay-off in a non-unionized setting or a disciplinary suspension.
Within the non-unionized workplace, an employer cannot lay-off an employee without pay and benefits unless it was a term of the employment contract. In other words, absent specific agreement by the employee at the commencement of the relationship, a lay-off of this nature will usually amount to a constructive dismissal.
A company that suspends a salaried employee, absent a discipline policy that identifies suspension as an appropriate possibility or evidence of custom, usage or presumed intention of the parties, will likely be found to have constructively dismissed the employee.
If you believe that your employment has been constructively terminated, please call me to discuss your situation. Each situation is different and very dependent upon the facts.
