What is a constructive dismissal in Ontario?
Many people ask me about constructive dismissals. At its core, a constructive dismissal is like other without-cause dismissals. The key difference is that the employer has not made the dismissal explicit or put it in writing. Therefore, the worker has an additional requirement to prove that they were, in fact, terminated.
Under Ontario’s ESA, employers who want to terminate an employee must do so by putting it in writing. In most cases employers follow the law. However, there are, of course, exceptions. For instance, some employers may refuse to acknowledge what they are doing to try to save money (not a good idea). Other employers may think they can simply do what they want and make radical changes to terms of employment without the agreement of the worker (also not a good idea).
Judges and adjudicators have used the principle of constructive dismissal to deal with these tense situations. It is called a “constructive” dismissal because judges construe or construct the termination out of the facts. The classic examples of constructive dismissal are: (1) demotions; (2) pay cuts; and/or (3) toxic workplace conditions that the employer lets fester or is outright the cause of.
To put it simply, constructive dismissals boil down to situations where the employer changes fundamental terms of employment in a significant manner, unilaterally and without reasonable notice, and without the agreement of the worker. The employer also has stopped short of acknowledging (especially in writing) that what they are doing is, in effect, tantamount to a termination of the existing employment agreement.
Workers need to react to a constructive dismissal within a reasonable period, or they may be deemed to have accepted the change in employment terms. If you are a business that needs to make changes, or if you are a worker who is facing a demotion, pay cut or toxic workplace, please get in touch to get legal advice without delay so you can understand the risks and make an informed decision.
This article was originally published by The Hamilton Spectator.
