What does Constructive Dismissal mean?
Whether you are a part-time, full-time, temporary or permanent employee, your employment relationship is governed by the terms of an employment contract that you entered into with your employer. Whether written or not, each employment contract contains a contractual term that requires an employer to provide an employee with advance notice prior to terminating his or her employment. The reason why employers must give their employees advance notice is because employees need time to prepare for the end of their employment and seek out other employment opportunities. This term may exist by virtue of the common law because the parties did not agree to a specific amount of advance notice (i.e., implied term), can be contained in a written employment contract setting out the amount of advance notice the parties agreed to (i.e., explicit term), or may be imposed by the Employment Standards Act, 2000 (“ESA”) or Canada Labour Code (i.e., statutory term).
When an employer changes a fundamental term of its employment contract with an employee without the employee’s consent, that change may constitute a constructive dismissal depending on the particular circumstances. Simply put, although the employer did not tell the employee that he or she had been terminated, the law may view the employer’s unilateral decision to change the employment contract as an indication that the employer no longer wants to be bound by the original employment contract (i.e., a repudiation of the employment contract) and provides the employee with an opportunity to proceed as if he or she has been terminated.
Absent exceptional circumstances, employers have an obligation to provide employees with advance notice prior to implementing any fundamental changes to the employment contract. Where the term requiring advance notice is implied, the common law requires an employer to provide an employee with a “reasonable” amount of notice. What constitutes a “reasonable” amount of notice is determined based on factors such as an employee’s age, position, length of service, education, training, skills, etc. Where the term of an employee’s contract that deals with notice is explicit, the employer must provide an employee with the amount of notice previously agreed to by the parties. In both situations, the ESA and Canada Labour Code set out the absolute minimum amount of notice that an employer can provide to a provincially-regulated employee and federally-regulated employee when he or she is terminated. When an employer unliaterally changes a fundamental term of an employment contract without providing him or her with an appropriate amount of advance notice, the employee has been constructively dismissed and, subject to mitigation, is entitled to recover the wages and other compensation he or she would have been entitled to had he or she been given an appropriate amount of notice (i.e., pay in lieu of notice).
What should I do if I have been, or think I have been, constructively dismissed?
Your employer just demoted you, changed your responsibilities, reduced your pay or modified a significant term of your employment contract without your consent. Some of your co-workers and friends have mentioned constructive dismissal but you don’t know whether or not your employer’s actions were illegal or just distasteful. All you know is that something doesn’t feel right and you need answers from an experienced advocate who you can trust.
This is not the time for quick uninformed decision making. Others may tell you and you may believe that you have a rock solid case but the reality is that the law in this area is complex and very fact-specific. Believe us, this is not the time to tell your boss that you know your rights, you’ve been constructively dismissed, and you’ll see him or her in Court. Although there’s good reason for you to be upset, the decision maker hearing your case may not agree that your employer acted inappropriately, and even if the decision maker does, he or she may think that it was unreasonable for you to end the employment relationship given the circumstances.
Assessing the likelihood of whether or not a decision maker will conclude that an employee has been constructively dismissed, determining the amount of compensation you are likely entitled to and figuring out the best approach to securing that compensation requires legal training and “hands on” experience that most employees and many lawyers do not have.
In order to figure out what to do next, you need information from an experienced employment lawyer that you can trust. Now is the time to speak to an employment lawyer who knows about constructive dismissal, can review the facts surrounding your specific situation, and can give you a frank opinion about the strengths and weaknesses of making a constructive dismissal claim.
If you think you may have been constructively dismissed, now is the time to call Franklin Law to book a Consultation. Because a significant part of Franklin Law’s practice involves representing employees who have been constructively dismissed, our lawyers are well positioned to provide you with timely and trustworthy advice, represent you in negotiations with your employer and if necessary, represent you in an action (or lawsuit) against your employer for constructive dismissal.