COLUMN: Constructive dismissal

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Did you know that an employer needs to obtain an employee’s consent to change an important term of the employment agreement? It may be considered a termination if consent is not obtained and certain other conditions are met.  

This is called constructive dismissal and it triggers the same obligations for an employer as a straightforward termination. This may mean the employee is entitled to a severance package. 

There are two types of constructive dismissals. The first is when the employer breaches a term of the employment contract. The second is when the employer’s conduct shows an intention not to be bound by the employment contract.

The employment contract does not have to be written. 

Contracts often contain implied terms that are not expressly written or stated by the parties and include things such as an employer’s obligation to provide reasonable notice of termination.  

An employment contract is not frozen in time and the terms usually evolve as the employment relationship changes. An example is when an employee receives a promotion.  

Some common examples of constructive dismissal are when an employer unilaterally reduces an employee’s salary or significantly alters their job duties. 

Sometimes a temporary layoff is a constructive dismissal. It may also occur if an employer has failed to take reasonable steps to eliminate workplace harassment that has created a toxic work environment.

An employee who wants to claim constructive dismissal must act quickly. Failure to do so creates a risk that a court may later decide the employee accepted the change and is unable to claim constructive dismissal.

There are important exceptions that allow an employer to make a unilateral change to the terms of the employment agreement without causing a constructive dismissal. 

An employer can make changes to the employment agreement that are minor in nature or are not detrimental to the employee.  

A written employment contract may also provide an employer the right to make certain changes unilaterally. 

If an employer can show that an employee has accepted similar changes in the past or that such changes are common across a specific industry, they may also be permissible. 

Finally, if an employer provides an employee sufficient notice then an employer can unilaterally change virtually any term of the employment agreement.

Constructive dismissals are a very complicated area of law and every case needs to be assessed individually. You should seek legal advice on your specific situation as early as possible and always before you act. 

A lawyer is able to advise you on whether your circumstances meet the criteria for a constructive dismissal and assess your damages. A lawyer can also identify if there are additional intersecting legal issues. 

At the Chatham-Kent Legal Clinic, we provide advice to people who have been constructively dismissed. If your case has merit and your family income is low, then the legal clinic may be able to represent you. If your family income is not low enough to qualify for our services, we will refer you to the private bar.

  • Travis McKay is a CKLC employment law lawyer (www.cklc.ca, 519-351-6771).

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