What is constructive dismissal?
Generally, constructive dismissal occurs when your employer negatively changes important or material terms of your employment relationship without your agreement. When this happens, an employee can quit and sue his or her employer for constructive dismissal damages. If you quit because of a constructive dismissal, you are generally entitled to severance pay and employment insurance (EI).
When can I quit for constructive dismissal?
Constructive dismissal occurs when your employer makes significant changes to your employment, or otherwise shows an intent to no longer honour the terms of the employment relationship. When a constructive dismissal occurs, you can either accept the change (by continuing to work) or quit and sue your employer.
How do I know when to quit?
Whatever you do, do not quit to claim constructive dismissal against your employer, without speaking to an experienced employment lawyer first. There is no such thing as "near" constructive dismissal - courts take an "all or nothing" approach. If your case comes "close" to but does not qualify as constructive dismissal, you will be entitled to nothing. Do not take the risk! Every case requires its own analysis. Speak to a qualified lawyer about your specific situation.
What are examples of constructive dismissal?
Constructive dismissal can occur in many ways, including:
- Reduction in pay: Not every reduction in pay results in constructive dismissal. Generally, a reduction in pay of around 15-20% is required to establish a constructive dismissal.
- Demotion: Demotion is often coupled with a reduction in pay, status, and/or responsibility. There must be some clear, objective criteria to show that a reassignment was actually a "demotion" in order to rise to the level of a constructive dismissal.
- Change in work location: If your employer moves locations, either increasing your commute or requiring a move for yourself, this can give rise to a constructive dismissal.
- Arbitrary suspension/layoff: Having your employment suspended arbitrarily - even with pay - can give rise to a constructive dismissal. Similarly, your employer cannot temporarily lay you off unless doing so is consistent with past practice and/or the terms of your employment.
- Dangerous/poisoned work environment: If you are being subjected to serious harassment, abuse, discrimination, or risk of physical injury in the workplace, you may be entitled to quit and claim constructive dismissal.
What is not constructive dismissal?
There is a fine line between what is and what is not constructive dismissal. The differences are subtle, but important. Some common misconceptions about constructive dismissal include the following:
- Condoned changes: if you wish to claim constructive dismissal, you must act quickly. Failing to quit when a constructive dismissal occurs can signify to a court that you have accepted the change.
- Discipline: Employees sometimes feel that discipline is unwarranted, overly harsh, or harassing in nature. This is a difficult argument to make. Generally, your employer is entitled to discipline you - and that discipline may be harsh or extremely critical. For instance, a disciplinary suspension, even without pay, does not establish a constructive dismissal case, so long as it is warranted in the circumstances.
Is it "worth it" to claim constructive dismissal against my employer?
Constructive dismissal exists as relief for employees whose jobs have truly become intolerable. Employees should not claim constructive dismissal in hopes of obtaining a "windfall" - most employees are better off being terminated without cause. Consider a constructive dismissal claim as insurance, not a jackpot.
What can Hyde HR Law do for me?
The lawyers at Hyde HR Law are experts on constructive dismissal. We have guided several of our employee clients through constructive dismissal claims to reach reasonable settlement agreements with their employers. In many cases, we have formulated strategies that have resulted in our clients being terminated without cause, eliminating the need for long and expensive litigation.
If your employment has become intolerable, we can create a strategy to maximize your bargaining position and help you negotiate a reasonable severance package with your employer. Failing that, we will initiate constructive dismissal proceedings against your employer and vigorously represent you at every step. Contact us today.