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Understanding Your Rights and Potential Payout in Ontario

Constructive dismissal occurs where an employer does not fire an employee but instead changes the working conditions for an employee to the extent that it is considered a termination of employment in law. In this situation, an employee is forced to stay at work and accept the changes or to walk away and claim constructive dismissal to get a payout. This is one of the hardest decisions an employee is likely to have to make in their career and for this reason, it should only be made with proper employment law expertise, due to its significant impact on the employee’s career and financial situation.

If you are successful at claiming constructive dismissal, how much can you get?


Compensation for a constructive dismissal claim is determined on a case-by-case basis, including whether you have a contract restricting your entitlements. However, it would not be unusual to see that an employee receives approximately one month of income (including bonuses etc.) per year of service. 

This can be paid out in the form of a lump sum or as a continuation of salary/benefits. Specifically, in the event your employment is found to have been terminated (through constructive dismissal), courts aim to provide enough compensation based on an assessment of how long it will likely take you to find another job.

Factors Influencing Compensation:

Age: Older employees may face a longer job search, potentially increasing the compensation amount.

Type of Role: Specialized or high-level positions can influence the compensation due to the challenge in finding similar roles.

Length of Service: Longer tenure often leads to a longer notice period and potentially higher compensation.

Availability of Similar Employment: The local job market and the employee’s prospects of finding similar employment play a crucial role.

Notice Period Considerations:

A key factor in determining Constructive Dismissal payout is the notice period according to set minimum in Employment Standards Act,2000 (“ESA“). It is influenced by the employee’s length of service, age, position, and the likelihood of finding comparable employment. Notice periods can range significantly, up to 24 months in some cases.

Mitigation of Losses:

Dismissed employees are generally expected to make reasonable efforts to find comparable employment. For example, regularly applying for relevant job openings and attending interviews would constitute such efforts. Any income earned during the notice period from new employment can reduce the compensation amount  from the constructive dismissal claim.

Additional Factors and Damages:

Courts consider various factors, including potential aggravated or moral damages due to the employer’s conduct. Legal costs may also be recoverable, depending on the case.

Legal Guidance:

Given the complexities and variability of constructive dismissal cases, seeking professional legal advice is crucial. An employment lawyer can help in assessing the situation, determining an appropriate claim amount, and negotiating a favorable deal.

It is important to remember that dismissed employees have a general duty to make reasonable efforts to mitigate their losses in income by actively seeking comparable employment after their dismissal. Any compensation amounts which exceed the minimum notice and severance pay obligations under the applicable employment standards legislation are subject to reduction once you obtain new employment and start to earn a new income. This is another reason why it’s important to seek proper employment law counsel to maximize the chance that you can negotiate a favorable deal.

If you are thinking about making a claim against your former employer and are seeking legal advice in relation to awards, please contact Toronto employment lawyers, Sultan Lawyers at 416-214-5111 or via contact form.

Contact us today to schedule a consultation with us