What is a constructive dismissal?

A constructive dismissal occurs when the employer unilaterally makes fundamental changes to the terms and conditions of an employee’s employment. This can take a variety of forms, for example:

∙ A demotion

∙ A pay cut

∙ Reduction in benefits & perquisites

∙ Relocation of work

∙ Changes to hours

∙ Change in job duties.

The common theme for a constructive dismissal is that the change must be:

1) fundamental in nature; and

2) it is unilaterally imposed without the employee’s consent.

A constructive dismissal can also occur when there is a change in the work environment. For example, if the employee is being harassed, discriminated against, bullied, or exposed to a toxic working environment.

A constructive dismissal is assessed from an objective reasonable persons standard.

In other words, would an objectively reasonable person standing in the employee’s shoes, consider the employer, through its actions, to have repudiated the employment relationship?

If the answer is “yes”, then the employee has been constructively dismissed.

How do you know if you have a strong constructive dismissal claim?

Constructive dismissal cases are not always clear cut.

First, in order to be successful in a constructive dismissal claim the employee has to meet the objective threshold of establishing that there has been a fundamental change to employment terms or working conditions.

Many people believe that they have been constructively dismissed because of a workplace issue, whether it’s a conflict with a manager, an unfair performance rating, or there has been a change to employment terms that the employee disagrees with.

But meeting the objective reasonable person standard is a fairly high threshold. Not all changes or workplace issues meet that standard, regardless of how upsetting the situation may be for the employee.

Further complicating matters is proving the constructive dismissal. This can be tricky, particularly if the changes or workplace issues are not clearly evidenced in documentation. Employers often dispute the employee’s description of the events leading to the employee’s departure, and this can come down to a credibility contest between the parties.