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Employment Constructive Dismissal

There may be several good business reasons for an organization to make changes to an employee’s contract. For example, an employer may need to restructure or redeploy staff based on operational requirements; an employee may be underperforming in their current role; or compensation plans need to change to improve performance metrics.

Whatever the business rationale, changes that may make sense for the organization, can pose significant legal implications if not planned or executed properly.

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What is a constructive dismissal?

Simply put, a constructive dismissal occurs when an employer unilaterally alters fundamental terms and conditions of an employee’s contract without that employee’s consent. Some scenarios that may trigger constructive dismissal include:

Demotion;
Temporary layoff;
Reduction in pay or benefits;
Change to compensation structure;
Change to job duties;
Change in location or work;
Suspension pending investigation;
Change in remote or on-site work requirements;
Other material changes to contract terms.

Similarly, a constructive dismissal can arise if an employee is forced to quit because they have been subjected to discrimination, harassment, workplace ‘bullying’, or toxic work conditions, making the workplace unbearable.

The test for a constructive dismissal is an objective one. In other words, would an objectively reasonable person in the employee’s circumstances consider the employer to have repudiated its core obligations under the employment contract.

An employee who been constructively dismissed can choose to resign and pursue constructive dismissal damages instead of remaining in the job.

Is a current or former employee alleging constructive dismissal?

Our Team at JPAK Employment Lawyers have expertly advised and represented organizations in countless constructive dismissal cases. We also provide strategic advice to employers with a view to proactively taking steps to avoid employment matters escalating to contentious and costly proceedings.

If your organization requires advice about a possible constructive dismissal claim, has received a lawyer’s letter or has been named in a civil action in connection with a constructive dismissal claim, contact our team at JPAK Employment lawyers for legal advice about next steps and strategies for reducing potential liability to your organization.