Ottawa Constructive Dismissal Lawyer

Our Ottawa employment lawyers handle claims for constructive dismissal.  Many employees may not know that when an employer makes significant changes to the employment relationship, this may be a form of termination known as constructive dismissal.  A constructive dismissal occurs when an employer does not terminate an employee outright; rather, it breaches or changes the terms of the employment agreement and nature of employment.  Constructive dismissal can also occur where there is a toxic work environment or when an employee has been harassed or discriminated against.

Constructive Dismissals

If you have been constructively dismissed, you may be entitled to compensation just as you would be had you been wrongfully dismissed.  This is the case even if your voluntarily resign from your job as a result of the changes to your employment situation.

The Supreme Court of Canada held that there are two ways that an employer can constructively dismiss an employee based on a contractual breach:

• When an employer violates or unilaterally changes a term of the employment contract (whether express or implied); or
• When an employer’s actions indicate that it no longer intends to be bound by the employment contract.

In that decision, the Supreme Court outlined two branches that courts will use to determine whether a constructive dismissal based on contractual breach has occurred. Under the first branch, the contractual term (express or implied) that was breached must be identified. Once the court establishes objectively that a term was breached, it must then determine whether the breach was substantial enough to establish a constructive dismissal. A minor breach will not constitute constructive dismissal. This is an objective test: whether “a reasonable person in the same situation as the employee would have felt that the essential terms of the employment contract were being substantially changed”.

Under the second branch, the court will look at the actions of the employer to determine whether there has been a constructive dismissal. The court must determine whether the employer’s actions, “when viewed in the light of all the circumstances, would lead a reasonable person to conclude that the employer no longer intended to be bound by the terms of the contract”. The employee need not identify a specific breach or unilateral change in contract terms; rather, the focus is whether the employer, through its actions, demonstrates an intention to no longer be bound by the contract.

An employee has several options when an employer unilaterally changes the terms of the employment agreement. The Ontario Court of Appeal (Wronko v. Western Inventory Service Ltd) has held that an employee can:

• accept the change (either implicitly or explicitly);
• reject the change and resign, and claim constructive dismissal; or
• in certain situations, object to the change but remain employed.

If the employee rejects the change and resigns, he/she can sue for damages for wrongful dismissal. The employee will have the onus of establishing that the employer’s actions amounted to constructive dismissal.

The following are examples of situations that have been found to amount to constructive dismissal:

• fundamental changes to an employee’s duties, essentially amounting to a demotion;
• corporate reorganization resulting in the elimination of an employee’s position;
• changes to an employee’s status;
• a decrease in the amount of compensation;
• changes to the hours and location of work; and
• a temporary lay-off, not provided for in the employment agreement.

When there is a toxic work environment or an employee has been harassed or discriminated against, may also amount to constructive dismissal.

Do You Have a Case of Constructive Dismissal in Ottawa?

Constructive dismissal is a complex, fact-specific area of the law. It is important to note that even where an employee has been constructively dismissed, he/she will still be under a duty to mitigate his/her damages.  In other words, the employee must actively attempt to find alternative employment.

If you think you have a case for constructive dismissal in Ottawa or anywhere in Eastern Ontario, contact one of our employment lawyers today for a consultation by completing our online contact form, or by calling our office at (613) 518-2416.