A Constructive Dismissal happens when an employer makes a major change to a key part of the employment contract. In that case the employer is deemed to fired the employee and is liable to damages as if they had terminated the employee without cause (the constructive part of constructive dismissal comes from this deeming.
So what constitutes change which is major enough that it is a Constructive Dismissal? Demotions, corporate reorganizations, changes in job descriptions, changes in locations, major changes in hours, changes in compensation, changes in org structures, changes in duties are all things which could constitute constructive dismissal. These situations are very fact specific, and not every individual change will be enough to be constructive dismissal.
Creating a toxic, bullying atmosphere has been found to be constructive dismissal as well.
What should I do if I am constructively dismissed?
If your employer approaches you about a change in your employment relationship, you do not necessarily have to accept it right away. The law says you are entitled to a certain period of time (perhaps as much as a month or two) to make the decision if you are going to accept the change. We have heard of employers threatening termination if people don't agree to changes, which we do not think is proper. You have a few of options, ultimately, although it is best to speak with a lawyer. You agree with the change, in which case you lose your right to sue. You continue working, but under protest- the Supreme Court of Canada mentioned this as an option in Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10 (CanLII) although there has not been much other caselaw on this. The most common remedy is to resign and sue for constructive dismissal.
The damages in that case would be based on the principles set out in the case of Bardalv. Globe & Mail Ltd. (1960), 24 D.L.R. (2d) 140. You can see our article on that here: https://www.flodenward.com/post/how-is-severance-calculated-in-alberta.
If you believe you have been constructively dismissed, please feel free to contact us.
The information contained in this article is not legal advice. No solicitor client relationship is formed through this article. The reader is encouraged to retain counsel for advice in these matters.
