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Constructive Dismissal

A ‘constructive dismissal’ may occur when an employer unilaterally makes a fundamental or substantial change to an employee’s employment contract. Where an employer fundamentally breaches the contract, an employee may consider himself or herself to have been constructively dismissed.1

A constructive dismissal may be established by an employee where an employer breaches an express or implied term of the employment contract, if the breach is sufficiently serious. This can include, for example, a substantial and unilateral change to the employee’s compensation, work assignments, or place of work. A constructive dismissal can also be established if the employer’s conduct more generally demonstrates that the employer no longer intends to be bound by the contract, making continued employment intolerable.2

Whether or not there is a valid complaint of constructive dismissal tends to be highly fact specific, because the features of each employment contract and each situation must be taken into account to determine whether the essential terms of the contract have been substantially changed.3

An employee who wishes to complain of a constructive dismissal must do so reasonably quickly. If an employee fails to do so in a reasonable period of time, they may lose the right to sue for constructive dismissal on the basis that they have condoned the changes.4

The onus is on the employee to prove that an employer’s act is not only a breach of contract, but one that constitutes a constructive dismissal.5 Where an employee leaves the employment but is unable to prove a constructive dismissal, they will be considered to have resigned.6

Like any type of wrongfully dismissed employee, a constructively dismissed employee is generally expected to make reasonable efforts to mitigate any losses caused by the dismissal. In certain cases this can even mean that an employee is expected to mitigate by temporarily returning to work with the same employer, as long as the employee is not returning to an “atmosphere of hostility, embarrassment or humiliation.”7

  1. Farber v. Royal Trust Co., [1997] 1 SCR 846 at para 33 [↩]
  2. Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10 at paras 32-33 [↩]
  3. Farber v. Royal Trust Co., [1997] 1 SCR 846 at para 35 [↩]
  4. Wedding v. Motorola Canada Limited, 1999 BCCA 752 at para 2 [↩]
  5. Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10 at para 60 [↩]
  6. Bishop v. Rexel Canada Electrical Inc., 2016 BCSC 2351 at para 12 [↩]
  7. Evans v. Teamsters Local Union No. 31, 2008 SCC 20 at para 30 [↩]