What is Constructive Dismissure in Canada?

Constructive Dismissure in Canada

If your employer has changed the terms of your employment contract to a point that it is no longer viable for you to work there, you may have been constructively dismissed. This type of termination is different than a normal firing because it can be based on an action that does not violate any laws or breach any existing employment contracts.

While this form of termination is not a direct violation of any labour laws, it can still cause significant financial damage to an employee. This is because most Canadians are entitled to a severance package upon being terminated – typically a month of pay for every year they have been employed by their company. This compensation can be quite substantial. Nevertheless, this does not make it easy for employees to file a constructive dismissal lawsuit against their employer if they were forced out of their job because of an unreasonable change in working conditions.

Often, a constructive dismissal lawsuit arises when an employee feels that their employer has unilaterally made significant changes to their job without consulting them and the impact of those changes are negative. This can include both monetary and non-monetary changes. Regardless of whether the changes are positive or negative, the key is that they must have a substantial impact on the overall nature of the employment relationship. For instance, a significant reduction in salary can often qualify as constructive dismissal in Canada, but so can a demotion from a supervisory role to a lower position.

What is Constructive Dismissure in Canada?

Many employers will attempt to avoid the risk of a constructive dismissal lawsuit by communicating clearly and honestly with their employees about any changes that may affect them. This can be done through regular memos and company newsletters, announcements at meetings, and in-person discussions with individuals. The best course of action is always to put any significant changes in writing. This way, if the employee resigns as a result of these changes, it can be documented in writing.

The law that defines the scope of constructive dismissal in Canada is complex and includes both common law and statutory legislation. The statutory legislation, the Employment Standards Act (ESA), has specific provisions that define when an employer’s actions might constitute constructive dismissal. In addition to this, the courts have developed a common law understanding of what can qualify as constructive dismissal. This is based on legal principles that are developed through court decisions and offer a more nuanced view of the employment relationship, allowing it to extend beyond statutory minimums to consider implied terms and expectations in a contract of employment.

When significant changes to an employment contract occur, the best option for an employee is to seek legal advice from an experienced Toronto constructive dismissal lawyer. An employment lawyer can review the situation and the terms of the contract, determine the strength of a claim, and develop a strategy to ensure that the employee’s rights are protected. Contact Bune Law today to schedule a consultation with a Toronto constructive dismissal lawyer.