Constructive Dismissal -What you Need to Know

Constructive Dismissal: What to do if you have been forced out of your job? 

By Sania Chaudhry 

This blog post only applies to non-unionized workers and those who work under provincial regulation. If you are in a union or work under federal regulations, then different rules apply to you. As the below is not specific to your case, this does not constitute legal advice. Please contact us to discuss and obtain legal advice if you have been terminated and are wondering about your rights.  

Constructive dismissal occurs when you are forced out of your job in a way that it is in effect a termination. Normally, if you resign from your employment, you are not entitled to EI or to any severance. However, if your resignation occurs because you were constructively dismissed, you are entitled to both severance and EI. 

It is tricky to determine whether or not you were constructively dismissed. It is best to consult with a lawyer before you resign from your job to see if your employer has, indeed, constructively dismissed you before you make the massive decision of quitting. A lawyer can also help you word your resignation letter in a way that it will not hurt your claim for constructive dismissal. As noted, the main reason to claim constructive dismissal is so that you can get EI and severance if you were indeed forced out of your employment. 

There are two ways you can be constructively dismissed:  

  1. If your job duties, hours, and pay were so drastically changed by your employer that the employer-employee relationship and/or employment contract have been eroded.  
  1. The work environment is so toxic that the employer has made clear from its actions that it does not wish to abide by the terms of the employer-employee relationship and/or employment contract.  

For a constructive dismissal claim based on a drastic change to the employment hours, duties, and pay, the changes have to be fundamental to the employment contract. Whether or not these changes are sufficient to constitute constructive dismissal would depend on the facts of each case. For instance, a 10% reduction in pay with few hours in the face of an economic downturn would not likely amount to constructive dismissal, while a 20% and above reduction in pay in the face of another significant unilateral change to the employment relationship (such as a change in fundamental duties with a  demoted position title and significantly less hours of work) would more likely amount to constructive dismissal. Again, this would depend on the facts of each case.  

However, if you consent to these changes in your job, whether in writing or whether by continuing to work for a certain amount of time despite the unilateral changes made, then you lose your ability to make a constructive dismissal claim.  

It is more difficult to claim constructive dismissal on the basis of a toxic working environment, in terms of this being more nuanced and it, at times, being difficult to prove “toxicity” in a workplace. An example of where a toxic environment would amount to constructive dismissal would be, for instance, where an employee has repeatedly reported workplace harassment and discrimination to an employer but the employer refuses to correct this. Another example is where an employee is prevented from doing his/her job tasks due to unjustified criticism and interference in their tasks in the context of bullying. Again, this is not clear-cut and you would need to review your circumstances with a lawyer to see if your situation meets the requirements for constructive dismissal. Mere workplace politics does not amount to a toxic work environment leading to constructive dismissal.  

A Word About COVID-19 and Temporary Layoffs 

You may be wondering if your employer temporarily laying you off due to the economic impact of COVID-19 amounts to a constructive dismissal. In actuality, the Employment Standards Code allows for your employer to temporarily lay you off for a maximum of 120 days with reasonable notice given to you (one week if you have been employed less than two years and two weeks if you have been employed more than two years with the company). If your employer does not hire you back after the maximum period of 120 days, they have to terminate you and pay you severance (see our blog post about severance [add link]). If they do not call you back but also  do not formally terminate you, then you could claim constructive dismissal if the facts are right – again, this would depends on the facts of your case.