Constructive Dismissal

What is Constructive Dismissal in Alberta?

A constructive dismissal occurs when an employer makes a unilateral and fundamental change to a term of an employment contract without providing reasonable notice to the employee. Constructive dismissal can also occur when an employer creates, allows or otherwise ignores a toxic, hostile or unsafe work environment. Courts in Canada have held that the obligation of an employer to ensure that an employee is protected from a toxic workplace, is an implied term in standard commercial employment contracts.

When the terms of employment are significantly changed in this manner, an employee may be able to treat the contract as wrongfully terminated and seek severance pay as well as other types of damages through a wrongful dismissal claim.

What Changes Can Constitute a Constructive Dismissal?

It is important to note that not all changes made to an employee’s contract will give rise to a constructive dismissal. Under the law, an employer is entitled to make “reasonable” or “non-substantial” changes to an employment contract, as long as these changes are not “fundamental” and would not be seen by a court as going to the “root of the contract.” Examples of “fundamental” changes that may give rise to a constructive dismissal claim are:

• Lowering of wages or compensation
• Significant changes to an employee’s benefits
• Changes to the employee’s position or core work duties, such as a demotion
• Alteration of working conditions, such as a significant change in work hours
• Relocation of the employee’s workplace
• Imposing a leave of absence or suspension without sufficient reasoning

What Happens If an Employee Accepts These Changes?

If an employee gives informed consent to the changes, the employee will likely not have a claim for constructive dismissal. In addition, if the employee does not give express consent, but continues to work under the new changes without protest for a period of time, a Court may find that the employee has “acquiesced” to the changes, and therefore does not have a claim for constructive dismissal. Employees who believe they have been constructively dismissed should proceed with caution and consult a lawyer about their rights under the law before accepting any fundamental changes to their employment agreement.

How Can A Lawyer Help?

Constructive dismissal claims can be very complicated and sometimes difficult to prove. In a constructive dismissal claim, the onus is on the employee to establish that a constructive dismissal has occurred. This is different than in other wrongful dismissal claims where the onus is usually on the employer to prove that a wrongful dismissal has not occurred. A lawyer can help you navigate these challenges and also ensure you are fulfilling your duties under the law such as your duty to mitigate (searching for alternate employment).

If you believe that you have been constructively dismissed, it is a good idea to speak to an employment lawyer before you resign if possible, in order to preserve your rights and ensure you are aware of all your legal options.