Constructive Dismissal
Sometimes you aren’t fired. Instead, your job changes so much that staying becomes intolerable. Lower pay, demotion, a worse role, a hostile new boss imposed on you, a transfer to a far-off location, a sudden permanent reduction in hours.
When the change is big enough, the law treats it the same as a termination. This is constructive dismissal.
What Counts
Section titled “What Counts”Not every unwelcome change is a constructive dismissal. The change has to go to a fundamental term of the employment. Common examples:
- A significant reduction in pay or in commission/bonus structure
- Demotion, a real loss of responsibility, status, or authority, not just a title change
- A fundamental change in role and responsibilities, being moved into unrelated work, stripped of your team, or reassigned to make-work
- A forced relocation to a workplace far enough away that it materially changes your life
- A substantial reduction in hours that wasn’t part of your original arrangement
- A toxic or hostile work environment that the employer knew about and failed to address, the bar here is high but it can apply
Single isolated incidents rarely qualify. A pattern, or one big enough unilateral change, can.
Why This Matters
Section titled “Why This Matters”If you simply quit because you can’t stand it anymore, the law generally treats it as resignation, no termination pay, no severance, no Employment Standards claim for unpaid notice.
If the same situation is a constructive dismissal, the law treats your departure as a termination by the employer, and you may be entitled to the same notice or pay in lieu as if you’d been let go without cause.
What to Do Before You Walk
Section titled “What to Do Before You Walk”This is delicate. A few principles:
- Don’t quit on impulse. A resignation given in anger is hard to undo and can be used against you.
- Object in writing when the changes happen. A clear written record that you did not accept the new terms, but were continuing to work under protest while you assessed your options, is important. Silence can be read as consent.
- Keep working under protest if you can stand to, while you get advice. Walking off the job before you’ve established the situation is a constructive dismissal can complicate things.
- Get advice early. Constructive dismissal cases are very fact-specific. A lawyer can quickly tell you whether what you’re facing crosses the line.
Constructive Dismissal and Employment Standards Claims
Section titled “Constructive Dismissal and Employment Standards Claims”Some constructive dismissal situations can be addressed through an Employment Standards claim, particularly when there are also unpaid wages, vacation, or overtime in the picture. Others, especially where what you’re seeking is full common-law notice, are pursued in court.
The right path depends on the facts and the dollar amount at stake. A short consultation with an employment lawyer can usually tell you which.
- Termination, for context on what notice and pay in lieu look like when constructive dismissal applies.
- When to file a claim, including the timing question for someone in this situation.