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The Legal Effect of a Demotion or Reorganization in Alberta

Updated: Aug 21, 2020

Organizations sometimes wish to demote staff or make changes to their organizational structure. Many employees and employers are not aware that if the demotion or changes are big enough (or “material”) and not agreed to by the employee, that the situation might actually involve Constructive Dismissal.


Constructive Dismissal


Constructive Dismissal occurs in Alberta when an employer makes a unilateral, material change to an indefinite contract of employment.


Whether or not a certain situation falls into this category depends upon the scope of the change and can be very fact specific, but in the event this happens the employee has the right to resign and sue for Constructive Dismissal, but only if the change has actually occurred. Just discussing a potential change with an employee may not be enough.


The damages that an employer is liable for in this instance are the same as if the employer had fired the employee without cause, and depends on the employee’s

  • age

  • seniority

  • position

  • experience

  • expertise

  • educational credentials

and other factors, as well as the manner in which the situation was handled.


This can be a thorny area of law and often requires legal advice. If you find that you are in this situation with your employer, or you wish to make large changes within your organization, please contact Floden Ward today.





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