Constructive dismissal claims typically arise when an employer makes a unilateral and fundamental change to the employment relationship, for example, a material pay cut or demotion.
An employee who refuses the change may resign and pursue constructive dismissal damages. However, an employee who fails to protest the change and instead continues to work under the changescan be considered through his or her conduct, to have “condoned” or “acquiesced” to the employers’ breach. In other words, through their conduct the employee is considered to have accepted the change.
As a result, the employee should generally act promptly in the face of a fundamental breach of the employment contract. There is no specific legal standard for how much time an employee has before s/he must act, as this will depend on the circumstances. However, in a recent decision by the Alberta Court of Appeal (“ABCA”) in Kosteckyj v Paramount Resources Ltd, 2022 ABCA 230, it was held that an employee who continued to work under the new compensation terms for 3 weeks, was held to have tacitly agreed to the change, therefore compromising her constructive dismissal claim.
Background
Attrial the plaintiff argued that the employer had unilaterally lowered her compensation and thereby constructively dismissed her. Despite these changes, the plaintiff continued to work for the employer for an additional 3 weeks at which time she was in fact terminated without cause. The trial judge agreed with the plaintiff and awarded damages.
The employer appealed this decision to the ABCA. The main issue was whether the trial judge erred in applying the test for constructive dismissal. Of significance was the fact that the plaintiff did not accept or refuse the reduction in compensation and continued working the same job and duties with reduced pay for 3 weeks. The plaintiff’s failure to protest the change within a reasonable time was considered a tacit acceptance of the new terms. This case is exceptional as the court provided a specific number of days within which the plaintiff could have reasonably made her disagreement known to the employer.
Justice Wakeling ruled that while there was no error in the finding that the employer failed to satisfy its obligations under the employment agreement, however he disagreed with the trial judge on whether there was a constructive dismissal.The judge applied a “bright line test” and stated that the reasonable time within which the plaintiff, a professional engineer, could have collected the relevant information to determine whether she would accept or refuse the new terms was 10 business days. An employee “without the attributes” of the plaintiff may require more time, but it would be rarefor that person to need more than 15 business days to make a similar choice.
Similarly, Justices Pentelechuk and Justice Ho agreed with Justice Wakeling, but were reluctant to state a specific time period for the plaintiff to make her decision. However, in consideration of the facts 25 days was sufficient period of time to do so in this case.
Takeaway
Although the ABCA stated specific time periods, this ruling does not necessarily mean that 10, 15, or 25 days will be the benchmarks for the reasonable time to refuse contract changes for every constructive dismissal claim. The number of days were determined in consideration of the plaintiff’s sophistication, economic realities the employer was facing, and ultimately came down to what the judges found to be a reasonable timeframe.
Many cases have allowed constructive dismissal claims well beyond the 25-day mark on similar facts and that is what makes this a notable development in jurisprudence.However, this decision does confirm that employees should resist unwanted changes to their employment as soon as possible. The longer the wait, the greater the likelihood that you implicitly accepted the new terms.
If you are facing unwanted changes to the terms of your employment, contact JPak Employment Lawyers as soon as possible for legal advice. Email us atinfo@jpakemploymentlawyers.com or contact us here.
