Constructing dismissal: recognizing when your employer is pushing you out, and what to do about it
Constructive dismissal is a term of art. Law art. And it describes a situation when your employer has changed your terms of employment — including salary, position, location, tasks or responsibilities — to the extent that the law considers you to have been effectively fired from your old job and hired into a changed one.
Here’s an example: say you arrive at work, and your employer has removed your desk, taken your phone, removed your access to e-mail, instructed you to work on the floor in the customer waiting area, and cut your pay by a third. In this example based loosely on a real case, you have been constructively dismissed.
So what? Whatever the employer’s motivation, constructive dismissal matters because it generally entitles you, the constructively dismissed employee, to a notice period before the changes take effect. That is to say that the law requires your employer to notify you of significant changes to your salary or other terms of employment in advance. A failure to give that advance notice could entitle you to compensation.
To determine whether you’ve been constructively dismissed, your particular factual circumstances must be analyzed by a lawyer or paralegal. However, there are a few general principles to help you figure out whether constructive dismissal is a possibility.
The key difference between a constructive dismissal and a legally acceptable change in working conditions lies in the extent of the change. A minor change to your terms of employment — say a change of work area to an adjacent desk — will likely not be constructive dismissal. Minor changes are actually permitted by the law.
More than a minor change, however, could amount to constructive dismissal. And while the definition of a minor change is highly dependent on the context, it is possible to identify a more-than-minor change on the basis of certain thresholds. Below are some thresholds to watch out for, starting with changes to salary and wages.
Changes to wages and salary
Salary and wages are a good starting point for figuring out whether you have been constructively dismissed. Unfortunately, the law in Ontario is pretty harsh on employees when it comes to changes to salary or wages. If your salary is the only condition that was changed, then it will have to have been reduced by 20% or more before constructive dismissal becomes a possibility. If, however, the reduction was accompanied by another significant change to your working conditions, then you may have been constructively dismissed where your salary or wage was reduced by 14-17%. Reductions of 10% or less tend not to amount to constructive dismissal, even with other changes.
Other changes to working conditions
Because changes to other working conditions are not as measurable as salary or wage, it can be even more difficult to draw bright lines where constructive dismissal begins. Still, constructive dismissal lawsuits have been won by employees in a wide variety of cases, including on the basis of demotions, promotions, relocations, harassment, changes in reporting functions, changes in job responsibilities, changes to hours of work, layoffs and forced leaves of absence, as well as many other changes!
What is it worth?
There are several different ways a constructive dismissal can play out, or pay out, depending on if and when you were given notice of the changes, and if and when the changes took effect.
The best outcome for a constructive dismissal entitles you to stay home to look for a new job while receiving your full salary and benefits for a certain period of time. In law, that period is called a “notice period”. The notice period begins at the point you were constructively dismissed (i.e. when your terms of employment changed significantly), and its length can vary depending on how long you’ve been employed, what your position is, what your responsibilities are, how old you are, and what the job market is like.
But even though notice periods can vary, they generally fall within a defined range. For the most part, the length of a notice period will be between 3 to 5 weeks per year of employment. For example, without considering other factors, a five year employee could be entitled to receive between 15 and 25 weeks of notice.
Not all constructive dismissals will mean you get compensation, however. Depending on your situation, you may be required to work in the changed position during the notice period, or you may only be entitled to notice, and no compensation. In order to determine if you are entitled to compensation, you’ll have to speak to a lawyer or paralegal.
What to do
- Don’t quit. At least not without consulting a lawyer or paralegal.
- Don’t explicitly agree to the changes.
- Call us or someone else (but preferably us). An employment lawyer or paralegal will be able to tell you fairly quickly, and generally for free, whether it could be financially worth it for you to pay for legal advice. And most legal professionals will be honest when it’s not worth it.
- If you have to self-represent, there are free resources online. For starters, consult the eText on Wrongful Dismissal and Employment Law by Peter Neumann and Jeffrey Sack, which is available for free online. It has a whole chapter on constructive dismissal, and it is an invaluable resource for both lawyers and laypersons. In addition, Community Legal Education Ontario (CLEO) publishes several resources on legal issues for employees. You can also try contacting Legal Aid Ontario, but their resources have been cut so radically in recent times that they may not be able to help you.
This article is for informational purposes only and does not constitute legal advice, which cannot be given without consideration of your individual circumstances.
Featured image by Rodion Kutsaev, falling under Creative Commons CC0 license.