Constructive Dismissal

TORONTO EMPLOYMENT LAWYERS ADVISING ON AND DEFENDING AGAINST EMPLOYER-SIDE CONSTRUCTIVE DISMISSAL CLAIMS

Change in the workplace is unavoidable, and key to remaining competitive in an ever-evolving corporate landscape. However, employers need to exercise caution when implementing change, lest they find themselves facing a claim of constructive dismissal from one or more employees.  Too much change or change that occurs too quickly can result in expensive litigation for an employer.

Any employer considering implementing changes directly affecting employees should seek counsel from an experienced employment lawyer for advice. The employment lawyers at Sultan Lawyers have considerable experience providing practical advice to employers with an eye towards mitigating risk.

HOW IS CONSTRUCTIVE DISMISSAL DIFFERENT FROM WRONGFUL DISMISSAL?

Unlike wrongful dismissal or termination for cause, a constructive dismissal claim does not arise from deliberate termination of the employment relationship. Rather, constructive dismissal occurs when an employer does one of two things:

1. Makes a unilateral and substantial change to the working environment or conditions that violates the terms of the employment contract; or
2. Undertakes a series of actions that, when viewed cumulatively, demonstrate that the employer no longer wishes to be bound by the terms of the employment contract. This can include allowing the workplace to become a poisoned or hostile environment for one or more employees.

If constructive dismissal is found, damages will be calculated in the same way they would if the employee had been wrongfully dismissed. In cases involving egregious conduct on the part of the employer, punitive or aggravated damages may also be awarded.

Looking more closely at the terminology in the definition is helpful to illustrate what types of acts would be considered violations significant enough to warrant a finding of constructive dismissal.

Unilateral Change

A unilateral change means that the change was implemented by the employer without the consent or input of the employee. If an employee consents to the change, either explicitly or implicitly, it will be difficult for them to make a successful claim for constructive dismissal. An employee who does not raise any objection for a significant period of time may be seen to have implicitly consented to the change.

Substantial Change

A change must be relatively significant to satisfy the definition of “change” in such a way that it would violate the employment contract. For example, a remote worker who works from home and is asked to start attending a monthly meeting in the office would not likely be able to make a successful claim. However, if the location of the office is moved an hour away from the original location, this would likely be considered significant for any employee who regularly works onsite. With respect to compensation, a small decrease of, say, 5%, would not likely form the basis of a successful claim, but a reduction of 15% or more likely would. It is important to note that a court will examine each case based on the specific circumstances, and so it is not possible to provide an exhaustive list of changes that would be considered substantial in every circumstance.

Poisoned/Hostile Work Environment

A work environment can be deemed to have been ‘poisoned’ when an employee is subject to harassment that is known to be unwelcome. In this context, the harassment is usually something that occurs over an extended period of time, however, may be attributed to a single incident if the conduct is particularly egregious. Where an employee has been the subject of such treatment and the employer fails to take action on their behalf, a successful claim for constructive dismissal can be made if the work environment has become untenable for the employee. As with claims based in a change in the work environment, a court will consider each case on its own merits.

HOW EMPLOYERS CAN AVOID OR DEFEND CLAIMS FOR CONSTRUCTIVE DISMISSAL

Employers can take preventative action to avoid claims for constructive dismissal by ensuring that they take the following steps:

• Provide adequate notice for any significant change to an employee’s’ working conditions.
• Obtain explicit consent from any employee who will be affected by the change. Provide notice in writing and ask the employee to acknowledge their consent in writing as well.
• Provide consideration to any employee affected by the change. For example, provide a one-time compensation bonus to an employee who will be affected by a location change. This should be done in conjunction with obtaining written consent.
• Take any reports of harassment or bullying in the workplace seriously and investigate all reports thoroughly. If harassment is found, take meaningful action against the offending party or parties.

Given that constructive dismissal is heavily dependent on circumstance, employers are encouraged to seek legal advice when considering changes to the work environment. An employment lawyer will provide advice on mitigating risk and proactive measures to avoid claims for constructive dismissal.

SULTAN LAWYERS: ADVISING EMPLOYERS ON CONSTRUCTIVE DISMISSAL CLAIM DEFENCE AND PREVENTION

At Sultan Lawyers in Toronto, our exceptionally experienced employment lawyers regularly advise employers across the province on best practices when implementing change in the workplace. We will assist with designing a proactive plan for rolling out change with an eye to minimizing risk for the employer and preventing future claims for constructive dismissal. We will also provide guidance and strategic representation in the defence of claims for constructive dismissal. We help a wide range of employers across Canada and the world to ensure they provide adequate protections for employees while mitigating their own risk. Contact us online or at 416-214-5111 for a consultation.