Sultan Lawyers on Dismissal Pt. 3: The Difference Between Wrongful and Constructive Dismissal

You may be aware of two common terms often used to describe the actions of an employer who violates the rights of an employee at the time of the termination of that employee’s employment: wrongful dismissal and constructive dismissal. So what do they each mean?

In general terms, an employee is wrongfully dismissed when the employer explicitly intends to terminate their employment, and in doing so, breaches a term of the employment agreement or a principle of employment law as defined in legislation or case law. By contrast, an employee is constructively dismissed when an employer does not explicitly intend to terminate their employment but acts in such a way that effectively repudiates the employment agreement or otherwise renders the employee’s continued employment untenable.

Common examples of wrongful dismissal:

• An employee is dismissed “for cause” for performance issues without having been previously advised of any problems with their performance or given the chance to remedy the defect.
• An employee is dismissed “without cause” but is provided with insufficient notice of termination or termination pay.
• An employee is dismissed for a reason protected by human rights law or other employment standards legislation (for example: for being pregnant, for reporting an incident of workplace harassment, or for taking a leave of absence protected under the Employment Standards Act).

Common examples of constructive dismissal:

• An employer makes a unilateral change to a fundamental term of an employee’s employment (for example: by substantially reducing their salary or removing a benefit entitlement).
• An employer fails to investigate or address a complaint of workplace harassment or workplace violence made by an employee and the workplace has been rendered a toxic and/or dangerous work environment for the employee.
• An employer acts in such a way so as to be clearly trying to pressure an employee to resign (for example: by consistently changing performance targets such that it is impossible for an employee to carry out their job, or by removing tools and equipment that are necessary for the employee to complete their work).

The importance of recognizing constructive dismissal

Constructive dismissal is important to recognize in situations where an employer is trying to coerce an employee to resign, possibly to avoid having to provide an employee with the entitlements owed to them upon termination.

If the actions of an employer legally constitute a constructive dismissal of an employee, this allows the employee to act as though their employment has been terminated and to seek many of the same damages available to employees who have been wrongfully dismissed.

The importance of seeking proper legal advice

A determination of whether wrongful or constructive dismissal has occurred in any given case requires a careful and complete review of the facts specific to that situation.

It is especially critical to seek legal advice in deciding when to walk away from active employment or whether to accept a severance offer made by an employer upon termination of employment.

Employees will also want to carefully consider their obligation to mitigate damages resulting from their loss of income. In certain situations, this obligation may even require an employee to continue working for an employer following their wrongful or constructive dismissal.

If you believe that you may have been wrongfully or constructively dismissed and you would like to consult with a qualified employment lawyer to better understand your rights and obligations, please contact Sultan Lawyers by telephone at 416-214-5111 or by here.

This post is part three of a six-part series. Please see the previous posts below:

• Part 1: What Defines Wrongful Dismissal?
• Part 2: My Employer is Reducing my Pay. Am I Entitled to Damages for Constructive Dismissal?