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Should Employees Resign If They’ve Been Constructively Dismissed?

Termination from employment, whether with or without cause, is typically explicit and undeniable. In light of the COVID-19 pandemic and the impact of the Infectious Disease Emergency Leave regulation passed under the Ontario Employment Standards Act, many employees and employers became acquainted with a less straightforward form of termination known as constructive dismissalSome employees may have unknowingly been a victim of constructive dismissal in their lives, and wonder if they’ve been constructively dismissed. Some make the innocent but costly mistake of resigning from their employment instead of seeking their legal entitlement to severance.

What Is Constructive Dismissal?

Constructive dismissal is a termination implied from an employer’s conduct indicating they no longer wish to be bound by the employment agreement. When an employee is constructively dismissed from a workplace they would then be entitled to a severance package as if they were explicitly fired.  

A constructive dismissal can occur when an employer makes a significant change to the terms of employment without an employee’s agreement. Examples of significant and unilateral changes to the employment agreement that amount to constructive dismissal include demotion, modification of duties, reduction in salary, a reduction in hours, a change to geographic location, a layoff without the employer’s explicit right to do so outlined in the employment agreement and placing employees on other forms of indefinite unpaid leave.

Another form of constructive dismissal occurs when the employer engages in conduct that erodes an employee’s trust in the employment relationship to the extent it becomes irreconcilable. When an employer engages in or condones behaviour meant to humiliate, embarrass, bully or harass an employee in the workplace, they are increasingly making it unreasonable for an employee to remain in the workplace. When an employee reaches their “breaking point” because of the employer’s behaviour, they could then potentially claim constructive dismissal from their employment.  

Typically, employees are expected to resist the changes to their employment or take definitive steps to demonstrate their disapproval of those changes. An employee runs the risk of being said to have “condoned” the changes to their employment if they continued their employment and acted as though they accepted the changes. The longer an employee waits to claim constructive dismissal after a change was made to their employment, the less likely the claim will succeed.  

Should An Employee Resign If They’ve Been Constructively Dismissed? 

When an employee knows their employment agreement was unilaterally changed or they are being forced out of the workplace by their employer, they may feel like the only course of action is to resign

What many employees do not know is that by resigning their employment without consulting an employment lawyer, they may be giving up their entitlement to severance for the employer’s behaviour. A properly crafted resignation letter could be the difference between the success and failure of a claim for constructive dismissal.

There are instances where a resignation that properly outlines the change to an employee’s employment or the employer’s behaviour as the sole reason for an employee feeling forced to resign result in successful claims of constructive dismissal, but every case turns on its own facts and circumstances. 

As constructive dismissals are typically more complicated than explicit termination, employees should consult an employment lawyer before tendering a resignation to their employer after a recent change to their employment or in response to facing mistreatment from their employer.  

Contact Us 

If you are an employer facing a constructive dismissal claim, or an employee who believes you’ve been constructively dismissed, our team of experienced workplace lawyers at Achkar Law can help.

Contact us by phone toll-free at +1 (866) 508-2548 or email us at [email protected] and we would be happy to assist.