Constructive Dismissal

Constructive Dismissal Lawyer Calgary

What Is Constructive Dismissal?

Our office gets tons of inquiries from employees who are in a weird limbo. On the one hand, they have not been handed a termination letter, on the other hand, the employer’s treatment towards them just doesn’t sit right so much so they’ve thought about resigning. This state of uncertainty is arguably more stressful than a direct firing because the employee carries the burden of the decision. They fear that if they resign, they forfeit their right to Employment Insurance or severance, yet staying seems impossible due to the deteriorating conditions.

Very often a termination does not always look like a formal firing. Sometimes, an employer makes the workplace environment intolerable or changes the job duties so significantly that the employee feels they are forced to quit. This is constructive dismissal, which occurs when an employer unilaterally changes a fundamental term of the employment contract without consent, or when their conduct shows they no longer intend to follow the contract. Essentially, the employer breaks the employment agreement, and the employee accepts that breach by resigning. It is a disguised dismissal. The employer attempts to alter the employment relationship so drastically that the employee has no choice but to leave, effectively allowing the employer to bypass their legal obligations to provide reasonable notice or pay in lieu thereof.

How Does Constructive Dismissal Work?

Constructive dismissal always involves a serious breach of contract. If an employer violates a written or unwritten term of employment, and that breach is substantial, the courts may treat this situation as a dismissal. This may be the case even if the employee tendered involuntary resignation. The law looks at whether a reasonable person in the same situation would have felt they had no choice but to leave. If the court determines constructive dismissal occurred, the employee can pursue severance pay and damages just as if the employer had wrongfully terminated them directly. It is a way to prevent employers from forcing employees out to avoid paying severance.

It is important to understand that the legal test is objective rather than subjective. It does not matter if the employee personally felt offended; the court asks whether the employer’s conduct indicates an intention to no longer be bound by the employment contract. There are generally two branches of constructive dismissal recognized by the Supreme Court of Canada. The first branch involves a single, unilateral act by the employer that breaches a fundamental term, such as a massive pay cut. The second branch is cumulative; it involves a series of acts that, taken together, show the employer no longer intends to maintain the employment relationship. This often manifests as a “death by a thousand cuts” scenario where no single incident is enough to quit over, but the total treatment renders continued employment untenable.

Constructive Dismissal Signs

Not every frustration or minor change in the workplace qualifies as constructive dismissal. Generally, there must be a major breach of a core employment term. The most common signs we see are detailed below. Note that context is vital; what constitutes a constructive dismissal for a senior executive might be viewed differently for a junior associate, depending on the specific terms of the employment agreement:

• Significant Compensation Cuts – A significant reduction in salary, commission structures, or wages without agreement. For instance, if your employer unilaterally reduces your base salary by twenty percent despite your objections.
• A temporary layoff that is not expressly permitted by the employer, or if the job you had prior to your layoff is no longer available upon your return. An example involves a salaried manager being placed on an unpaid leave of absence due to a seasonal slowdown when their contract contains no layout clause.
• Demotions – A substantial change in job title, reporting structure, or authority that effectively lowers the employee’s status. Consider a scenario where a Senior Vice President is stripped of all direct reports and reassigned to perform entry-level administrative data entry.
• Toxic Work Environment – Persistent harassment, bullying, discrimination, or unsafe conditions where the employer fails to intervene. This could involve a supervisor who habitually subjects an employee to public humiliation and profanity while Human Resources ignores repeated formal complaints, thereby condoning the harassment.
• Relocation – Forcing an employee to move to a different city or office location or a certain work arrangement that was promised by the contract at the time of the hiring without reasonable notice or a contractual clause allowing it. Imagine an employer demanding a daily commute to a satellite office one hundred kilometers away when the employment agreement specifies a downtown Calgary location.
• Suspensions – Unpaid administrative suspensions that are not authorized by contract or specific legislation. For example, being sent home without pay for an indefinite period while the employer conducts a vague investigation.

When you notice these changes to your employment, contact an employment lawyer right away. Sometimes the employer may try to solicit a consent – do not fall for it. An express consent will nullify a constructive dismissal claim even if it is otherwise legitimate.

Compensation You May Be Eligible For

If a claim is successful, the compensation often mirrors what an employee would receive in a standard wrongful dismissal case. The objective of the damages is to put the employee in the financial position they would have been in had the employer provided proper working notice of the changes. This typically extends beyond the minimums in the Employment Standards Code, up to 24 months’ wages (26 months in extraordinary cases). You may be entitled to:

• Full severance pay calculated based on age, length of service, position, and the availability of similar work.
• Compensation to cover the loss of health coverage, pension contributions, or stock options.
• If the employer acted in a deceptive, malicious, or unduly insensitive manner during the process, courts may award additional compensation known as bad faith damages.

The Role of a Constructive Dismissal Lawyer

Navigating these claims is complex and risky. A lawyer assesses the facts to determine if the changes to employment are truly “fundamental” under Alberta law. The burden of proof lies with the employee to demonstrate that the breach occurred. This is the opposite of a standard firing, where the employer must prove they had a reason to terminate. For a constructive dismissal claim to be successful, the employee almost always needs to “build a case” – this meaning retaining key documents and making sure communication with the employer during this critical time is bulletproof.

Timing is also critical; resigning too early or waiting too long can destroy a claim. If you resign too early, the court may find the employer was not given a fair chance to rectify the issue. If you wait too long, you risk condonation. A lawyer provides advice on exactly when and how to resign to preserve legal rights. They also manage communications with the employer to prevent the employee from accidentally waiving their rights to severance.

How TZ Law Can Help Employees Facing Constructive Dismissal

We focus on protecting workers who are being pushed out of their livelihoods. Our team reviews employment histories and contracts to build a strong strategy before any resignation letter is submitted. We handle the difficult negotiations with employers to secure a fair resolution, often avoiding the need for a trial. Our goal is to level the playing field so that employees do not have to face a corporate legal department alone. We advocate for the maximum entitlement available under common law.

Contact Our Calgary Constructive Dismissal Lawyer

Do not let an employer force you out empty-handed. If you are experiencing fundamental changes to your job duties or a toxic work environment, legal advice is essential before you quit. Contact TZ Law today to review your situation.

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