Resignation Under Duress: Understanding Constructive Dismissal

When it comes to employment law, the word “dismissal” usually brings to mind a formal termination letter or a direct conversation in which an employee is told they are being let go. The law does, however, recognize a less obvious but just as serious type of termination called constructive dismissal. Employees need to understand this idea because it gives them a way to take legal action when an employer’s actions, not their words, end the employment relationship. A constructive dismissal happens when an employer makes a big change to an important part of the employment contract without the employee’s consent, leaving the employee with no choice but to quit.

Unilateral Changes: Breaking the Employment Contract

A constructive dismissal claim is based on the employer breaking the employment contract on their own. This breach doesn’t need a formal written agreement. The contract usually has implied terms that come from long-standing practice, company policy, and common law. A fundamental change is one that significantly changes the job, status, or pay that was agreed upon when the person was hired.

Some common changes that can lead to constructive dismissal are:

Significant Demotion: A big drop in title, power, or the way people report to you.

Compensation Reduction: A big, one-sided cut in pay, wages, or important benefits.

Change in Location: A forced move to a different city or area that makes things harder for the employee.

Change of Duties: Taking away important job duties or giving someone completely different duties that change the nature of the job.

The main legal test is whether the change is so big that it shows the employer no longer wants to be bound by the main terms of the original agreement.

The Work Environment That Can’t Be Tolerated

A lot of constructive dismissal cases are about breaking a contract, but the idea also applies to cases where the employer’s behavior makes the workplace hostile or unbearable. This path is often harder to prove because the employee has to show that the working conditions were so bad that anyone would have felt they had to quit.

This could mean ongoing and unaddressed harassment, bullying, discrimination, or a level of micromanagement that is meant to punish the employee and force them to leave. It is important that the employer either made the situation unbearable or didn’t fix it after being told about it. In this case, the employee’s resignation is not seen as a choice, but as a forced response to a toxic workplace.

Mitigating Risk: The Employee’s Responsibility to Act

If an employee thinks they have been constructively fired, they need to act quickly and decisively. An employee who doesn’t object to the one-sided change or who keeps working under the new conditions for a long time runs the risk of being seen as having agreed to the new terms. When someone accepts, they can no longer claim constructive dismissal.

So, when an employee learns about a big change, they should clearly and unambiguously object to it, preferably in writing, and get legal advice right away. If the employer won’t go back to the original terms, the employee can quit and file a wrongful dismissal claim based on constructive dismissal.

Looking for Help and Advice

If an employee wins a constructive dismissal claim, they can get the same benefits as if they had won a wrongful dismissal claim. These include a severance package based on the employee’s years of service, position, age, and market conditions, as set out by common law. It is very hard to prove that an employer’s actions are bad enough to make someone quit, so getting the right legal help is a must. It takes a lot of experience and legal judgment to figure out if a change crosses the “fundamental breach” line. People who are in these tough job situations often need the help of lawyers who have handled similar cases successfully, like the top criminal lawyers in Canada. These lawyers are experts in criminal law, but many of them also have strong litigation and strategic negotiation skills that are useful in many other areas of Canadian law, such as employment matters that involve important reputation or regulatory issues.