Lawson Lundell LLP
  February 1, 2014 - Canada

Constructive Dismissal: Should I Stay or Should I Go?
  by Ritu Mahil

"Should I stay or should I go?" may be the question an employee asks himself when he faces a difficult working environment and considers filing for constructive dismissal. Constructive dismissal is when an employer indirectly encourages an employee to resign by failing to comply with the employment contract or one sidedly changing the employment terms without the employee's consent. 

It is distinguished from an ordinary resignation because it is the employer that initiates changes to the terms and conditions of the employment contract. Put bluntly, it is when the employer makes the working conditions completely intolerable for the employee with the intention of 'swaying' the employee to resign instead of outright firing him. 

Once the employer has changed the terms and conditions of the employment contract, the employee must file for constructive dismissal within a 90-day time period from when the changes took place for the case to be admissible in the courts. The extent of an employer's failure to meet its contractual obligations and time taken to deliberate also affect the likelihood the employee will win a constructive dismissal case. 

To put this into context, common examples of changed to an employee's working conditions include: 
  • Reductions in the employee's powers or duties that involve a significant loss of that employee's prestige and status as a result of reorganization in reporting arrangements. 
  • Threats of dismissal or demotion and unfair suspensions.
  • Significant reductions in working hours, salary or employee benefits. 

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