Constructive Dismissal in Ontario: What You Need to Know

Constructive Dismissal in Ontario: What You Need to Know

It can start with your employer accusing you of mistakes you didn’t make or giving you a negative performance review that is vague or unfounded. Or you can come to work one day and your employer informs you that someone else is taking your position and you are being re-assigned to a junior role. If this happens to you or has happened to you, it may be considered a constructive dismissal.

If you feel like your employer is trying to build a case to justify firing you or is trying to get you to quit by changing essential elements of your job, work with an employment law firm that will give you a free, no-obligation consultation. They can tell you your rights and what the law says about your specific situation.

What is Constructive Dismissal?

Constructive dismissal can happen in two ways. The first is if an employer unilaterally changes a fundamental term of the employment contract that substantially alters it. The second is when an employer’s behavior demonstrates they no longer wish to be bound by the terms of the employment contract.

Examples of Constructive Dismissal

Some examples of unilateral changes made by the employer that can result in a fundamental change to your employment contract and possible grounds for a constructive dismissal claim include:

  • A demotion that results in a reduction of your responsibilities and status even if you retain the same pay.
  • Changing your reporting functions, i.e., who reports to you and who you report to.
  • A significant change to your hours. This could be part-time hours or switching you from day shift to afternoons.
  • Reducing your pay, or eliminating your benefits and perks.
  • Not paying your full wages, overtime, or commissions.
  • Suspending you without pay or forcing you to take a leave of absence.

How to know if it's constructive dismissal or not

It’s important to note that a court will not see all changes to your employment as constructive dismissal. Employers have the right to run their businesses however they want. Including changing an employee’s responsibilities.

The test to decide if a change to an employment contract is constructive dismissal is to first identify a specific breach of the contract. Second, the breach must be objectively significant enough that it fundamentally changed the employment contract.  This is often when a reasonable employee in the same situation would also feel they had been constructively dismissed.

Always consult an employment lawyer before making decisions that affect your career. Especially the decision to leave a job, even if you feel justified in doing so.

The second way a constructive dismissal occurs is if an employer acts in a way that demonstrates they no longer intend to carry out their contractual obligations. Examples include abusive behavior or harassment or your employer allowing it to happen through co-workers.

What are Your Options if Your Employment Changes?

If your employment changes, you can either:

  • Accept the change, do nothing and continue working under your new conditions.
  • Tell your employer that you do not accept the changes but continue to work until you find a new job. You can then seek legal advice to know if it is a constructive dismissal.
  • Notify your employer that you do not accept the changes. Then, resign from the employment if you feel you can’t continue working there. If you are leaning toward this option, consult with an employment lawyer first. This ensures you do not jeopardize any potential claims.

If you can prove a constructive dismissal, you will be entitled to severance pay. You may even possibly get EI benefits and damages in cases of harassment or abuse.

However, if you can’t prove the changes to your employment amounted to a constructive dismissal, it will be as if you resigned voluntarily. Thus, you’ll have no claim to any severance or benefits.

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