What is Constructive Dismissal?

An employee who has not been formally terminated may, as a result of changes made to his/her employment, be effectively terminated, and able to claim significant damages.   

Damages are normally measured as pay in lieu of reasonable notice, but depending on the circumstances, the employee may have a claim to other kinds of damages as well.

The effective termination happens when the employer, without the consent of the employee, makes substantial changes to essential terms of the employment contract.  

The employment contract may be written, verbal or a combination of both.  Certain elements of an employment contract may be implied, or established under employment standards legislation. 

The level of change that will amount to constructive dismissal varies according to the facts of each case.  

Common triggers are a significant decrease in salary or benefits, or a significant change in job duties, or a “toxic work environment.” 

The kinds of changes made, when they were made, and under what conditions, require careful consideration and expert legal advice.  

There may be an obligation on an employee to remain in the changed employment to mitigate his/her damages, but this depends very much on the circumstances of the particular case.  

Employees are not expected to remain in an employment environment that is humiliating or overtly hostile.  

Whether you are an employee or an employer, appreciating your rights and obligations at an early stage will help in achieving the most favorable and cost effective outcome.  

If you have questions about your particular situation, please feel free to give our office a call at 250.475.0775.