Constructive Dismissal
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The document is a presentation about constructive dismissal given by Karen McClellan. It discusses what constitutes constructive dismissal under employment law, including unilateral changes to employment conditions that fundamentally breach the employment contract. It provides examples of changes that could trigger constructive dismissal, such as reductions in pay or demotions. It also covers an employee's options if they believe they have been constructively dismissed, such as accepting the changes, quitting their job, or working under protest while pursuing legal remedies.
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Constructive Dismissal
- 1. To watch & listen to this presentation as a webinar visit CLEONet www.cleonet.ca CLEONet is a web site of legal information for community workers and advocates who work with low-income and disadvantaged communities in Ontario.
- 2. About our presenter… Karen McClellan leads the JUSTICE@work project at the Community Legal Clinic – Simcoe, Haliburton, Kawartha Lakes. As a Staff Lawyer, Karen practices employment and human rights law, with a focus on low-income and vulnerable workers. Her clients include migrant farm workers and live-in caregivers. She has presented on the legal challenges facing workers to community groups, regional clinic training conferences, and provincial and national symposiums. She also served on of the Ontario Bar Association Taskforce on Wrongful Dismissal.
- 3. Constructive dismissal Harassment, bullying and discrimination at Work March 26, 2010 By Karen McClellan JUSTICE@work Lawyer JUSTICE @ work
- 4. JUSTICE @work Presented by
- 8. What is Constructive Dismissal? JUSTICE @ work
- 50. Questions and discussion JUSTICE @ work
- 51. This webinar was brought to you by CLEONet For more information visit the Employment and Work section of CLEONet at www.cleonet.ca For more legal information webinars visit: http://www.cleonet.ca/legal_education_webinars
Editor's Notes
- What is constructive dismissal? An employment agreement (written or verbal) cannot be changed by the Employer or Employee without agreement by both parties to the change. Most Common form of constructive dismissal : Employer changes the conditions of employment
- However not every change results in constructive dismissal. In order for the change to trigger constructive dismissal, it must be shown that: The Change is: NEW: Was not contemplated at the time of entering into the contract of employment (written or verbal); and MAJOR: Results in a major breach of contract and repudiates the contract; and NOT ACCEPTED: You did not condone or accept the change
- However not every change results in constructive dismissal. In order for the change to trigger constructive dismissal, it must be shown that: The Change is: NEW: Was not contemplated at the time of entering into the contract of employment (written or verbal); and MAJOR: Results in a major breach of contract and repudiates the contract; and NOT ACCEPTED: You did not condone or accept the change
- However not every change results in constructive dismissal. In order for the change to trigger constructive dismissal, it must be shown that: The Change is: NEW: Was not contemplated at the time of entering into the contract of employment (written or verbal); and MAJOR: Results in a major breach of contract and repudiates the contract; and NOT ACCEPTED: You did not condone or accept the change
- However not every change results in constructive dismissal. In order for the change to trigger constructive dismissal, it must be shown that: The Change is: NEW: Was not contemplated at the time of entering into the contract of employment (written or verbal); and MAJOR: Results in a major breach of contract and repudiates the contract; and NOT ACCEPTED: You did not condone or accept the change
- Was the change within the contemplation of the employer & employee when the employment relationship started? Was the change addressed in your contract? Was the change discussed at time of hiring? What is the custom of the industry? What is the company practice or policy? Were your hours set or flexible depending on need? Example of change addressed in contract/at time of hiring that will NOT constitute Con Dis Ex. Position: waitress, no written contract, at interview and on first shift – the restaurant manager indicated that they would try to provide about 25 hours / wk in shifts however the hours would fluctuate depending on how busy the restaurant was. During the summer hours would usually be more and there would be some slow times in the winter where she could expect her hours to decrease. The e’ee works for about 8 months at 25+ + hrs/wk but then in January and February her hours decrease. ***In this type of situation: the reduction in hours was expected and contemplated at the time of the employment agreement and will not give rise to constructive dismissal due to a change, i.e. decrease in hours.
- Was the change within the contemplation of the employer & employee when the employment relationship started? Was the change addressed in your contract? Was the change discussed at time of hiring? What is the custom of the industry? What is the company practice or policy? Were your hours set or flexible depending on need? Example of change addressed in contract/at time of hiring that will NOT constitute Con Dis Ex. Position: waitress, no written contract, at interview and on first shift – the restaurant manager indicated that they would try to provide about 25 hours / wk in shifts however the hours would fluctuate depending on how busy the restaurant was. During the summer hours would usually be more and there would be some slow times in the winter where she could expect her hours to decrease. The e’ee works for about 8 months at 25+ + hrs/wk but then in January and February her hours decrease. ***In this type of situation: the reduction in hours was expected and contemplated at the time of the employment agreement and will not give rise to constructive dismissal due to a change, i.e. decrease in hours.
- Was the change within the contemplation of the employer & employee when the employment relationship started? Was the change addressed in your contract? Was the change discussed at time of hiring? What is the custom of the industry? What is the company practice or policy? Were your hours set or flexible depending on need? Example of change addressed in contract/at time of hiring that will NOT constitute Con Dis Ex. Position: waitress, no written contract, at interview and on first shift – the restaurant manager indicated that they would try to provide about 25 hours / wk in shifts however the hours would fluctuate depending on how busy the restaurant was. During the summer hours would usually be more and there would be some slow times in the winter where she could expect her hours to decrease. The e’ee works for about 8 months at 25+ + hrs/wk but then in January and February her hours decrease. ***In this type of situation: the reduction in hours was expected and contemplated at the time of the employment agreement and will not give rise to constructive dismissal due to a change, i.e. decrease in hours.
- Was the change within the contemplation of the employer & employee when the employment relationship started? Was the change addressed in your contract? Was the change discussed at time of hiring? What is the custom of the industry? What is the company practice or policy? Were your hours set or flexible depending on need? Example of change addressed in contract/at time of hiring that will NOT constitute Con Dis Ex. Position: waitress, no written contract, at interview and on first shift – the restaurant manager indicated that they would try to provide about 25 hours / wk in shifts however the hours would fluctuate depending on how busy the restaurant was. During the summer hours would usually be more and there would be some slow times in the winter where she could expect her hours to decrease. The e’ee works for about 8 months at 25+ + hrs/wk but then in January and February her hours decrease. ***In this type of situation: the reduction in hours was expected and contemplated at the time of the employment agreement and will not give rise to constructive dismissal due to a change, i.e. decrease in hours.
- Was the change within the contemplation of the employer & employee when the employment relationship started? Was the change addressed in your contract? Was the change discussed at time of hiring? What is the custom of the industry? What is the company practice or policy? Were your hours set or flexible depending on need? Example of change addressed in contract/at time of hiring that will NOT constitute Con Dis Ex. Position: waitress, no written contract, at interview and on first shift – the restaurant manager indicated that they would try to provide about 25 hours / wk in shifts however the hours would fluctuate depending on how busy the restaurant was. During the summer hours would usually be more and there would be some slow times in the winter where she could expect her hours to decrease. The e’ee works for about 8 months at 25+ + hrs/wk but then in January and February her hours decrease. ***In this type of situation: the reduction in hours was expected and contemplated at the time of the employment agreement and will not give rise to constructive dismissal due to a change, i.e. decrease in hours.
- Was the change within the contemplation of the employer & employee when the employment relationship started? Was the change addressed in your contract? Was the change discussed at time of hiring? What is the custom of the industry? What is the company practice or policy? Were your hours set or flexible depending on need? Example of change addressed in contract/at time of hiring that will NOT constitute Con Dis EXAMPLE - Position: waitress, no written contract, at interview and on first shift – the restaurant manager indicated that they would try to provide about 25 hours / wk in shifts however the hours would fluctuate depending on how busy the restaurant was. During the summer hours would usually be more and there would be some slow times in the winter where she could expect her hours to decrease. The e’ee works for about 8 months at 25+ + hrs/wk but then in January and February her hours decrease. ***In this type of situation: the reduction in hours was expected and contemplated at the time of the employment agreement and will not give rise to constructive dismissal due to a change, i.e. decrease in hours.
- Employer is usually entitled to make changes to company policies and practices over time. However if that change is so significant as to result in a major reduction in benefits – that really formed part of the remuneration package at the time of hiring/employment agrmt – then can result in a constructive dismissal. Typical Changes or Breaches that are significant: -> Reduction in Salary/Pay -> Demotion -> Removal of Responsibilities and Core Functions -> Lay-off Where there is no express or implied term permitting lay-offs in employment agreement -> Change of Job Duties to a lower calibre/status employee is not qualified or suited for new duties -> Change in Benefits (Bonuses, Mat Leave Policy etc) Must be an integral part of compensation package Must be in breach of company policy If company policy change causes loss of benefits – may need to show that the change is below a commercially acceptable standard Basis : An employee is entitled to rely on the terms of employment and refuse to do work or accept changes imposed by the employer outside the scope of those terms TEST : Whether a reasonable person would consider that a key term of employment has been fundamentally changed.
- CHANGE IS MINOR = NO BREACH Some changes will not result in constructive dismissal Basis : Employment relationships evolve over time and minor changes can be expected and not result in a fundamental breach so as to destroy the employment relationship. Examples: -Removal of secondary duties on a temporary basis -Minor change in duties due to transfer to new location but same position QUALIFICATION: Employee’s duties are not frozen & may be expected to evolve over time -A very minor change in pay -Company restructuring: lateral transfer or slight change in duties where status and pay remain same QUALIFICATION: Although some indefiniteness may be expected, the Employer should provide information requested by Employee about his/her duties, status and authority level in a company restructuring plan If you’re not sure what the changes are going to be – ASK CAUTION: whether constructive dismissal or not depends on the circumstances – seek legal advice Reassignments & Relocation No fundamental change in terms of employment Reassignment or relocation is made in good faith for business reasons The courts have recognized that an Employer has some leeway to alter duties, this is especially the case where changes are necessary for the company’s survival in tough economic times and there is no objective element of humiliation or decrease in authority/demotion Note: Employer has less discretion to make changes where Employee is hired in a “definite” capacity
- Acceptance can be explicit or implicit Verbal or Written Actions You can’t wait too long to decide whether you will accept the change
- The court will take an objective approach and look at all the circumstances. Objective approach: will consider information available to the employee at the time. However the feelings of the employee, for example of “losing face” may not be relevant/considered if objectively, the change is determined to be minor and/or reasonable. Factors: Was there a significant change to the employment agreement imposed by the Employer? Whether employee accepted the change Whether employer acted in good faith and fairly In some cases: -Intent of Employer: Accidental or Intentional -Whether legitimate business reasons for the change Factors: If accidental then no intention repudiate the contract. However an Employer can still be guilty of constructive dismissal even with the best of intentions.
- The court will take an objective approach and look at all the circumstances. Objective approach: will consider information available to the employee at the time. However the feelings of the employee, for example of “losing face” may not be relevant/considered if objectively, the change is determined to be minor and/or reasonable. Factors: Was there a significant change to the employment agreement imposed by the Employer? Whether employee accepted the change Whether employer acted in good faith and fairly In some cases: -Intent of Employer: Accidental or Intentional -Whether legitimate business reasons for the change Factors: If accidental then no intention repudiate the contract. However an Employer can still be guilty of constructive dismissal even with the best of intentions.
- The court will take an objective approach and look at all the circumstances. Objective approach: will consider information available to the employee at the time. However the feelings of the employee, for example of “losing face” may not be relevant/considered if objectively, the change is determined to be minor and/or reasonable. Factors: Was there a significant change to the employment agreement imposed by the Employer? Whether employee accepted the change Whether employer acted in good faith and fairly In some cases: -Intent of Employer: Accidental or Intentional -Whether legitimate business reasons for the change Factors: If accidental then no intention repudiate the contract. However an Employer can still be guilty of constructive dismissal even with the best of intentions.
- The court will take an objective approach and look at all the circumstances. Objective approach: will consider information available to the employee at the time. However the feelings of the employee, for example of “losing face” may not be relevant/considered if objectively, the change is determined to be minor and/or reasonable. Factors: Was there a significant change to the employment agreement imposed by the Employer? Whether employee accepted the change Whether employer acted in good faith and fairly In some cases: -Intent of Employer: Accidental or Intentional -Whether legitimate business reasons for the change Factors: If accidental then no intention repudiate the contract. However an Employer can still be guilty of constructive dismissal even with the best of intentions.
- The court will take an objective approach and look at all the circumstances. Objective approach: will consider information available to the employee at the time. However the feelings of the employee, for example of “losing face” may not be relevant/considered if objectively, the change is determined to be minor and/or reasonable. Factors: Was there a significant change to the employment agreement imposed by the Employer? Whether employee accepted the change Whether employer acted in good faith and fairly In some cases: -Intent of Employer: Accidental or Intentional -Whether legitimate business reasons for the change Factors: If accidental then no intention repudiate the contract. However an Employer can still be guilty of constructive dismissal even with the best of intentions.
- If there is employee misconduct and the changes are a form of discipline then there may be no constructive dismissal Contract of employment allows for employer to make some changes Change is a breach but an alternate job is offered – employee may be expected to accept (if not unreasonable & no humiliation) in order to mitigate Example: poor work performance; theft etc – suspension w/out pay: if established cause then employer will not be faulted for changes that fall short of outright dismissal. However BOP on Er to establish cause… while BOP on E’ee to establish Constructive dismissal. Failure to mitigate can result in denial of damages TEST: whether the employee acted reasonably in refusing the new job
- If there is employee misconduct and the changes are a form of discipline then there may be no constructive dismissal Contract of employment allows for employer to make some changes Change is a breach but an alternate job is offered – employee may be expected to accept (if not unreasonable & no humiliation) in order to mitigate Example: poor work performance; theft etc – suspension w/out pay: if established cause then employer will not be faulted for changes that fall short of outright dismissal. However BOP on Er to establish cause… while BOP on E’ee to establish Constructive dismissal. Failure to mitigate can result in denial of damages TEST: whether the employee acted reasonably in refusing the new job
- If there is employee misconduct and the changes are a form of discipline then there may be no constructive dismissal Contract of employment allows for employer to make some changes Change is a breach but an alternate job is offered – employee may be expected to accept (if not unreasonable & no humiliation) in order to mitigate Example: poor work performance; theft etc – suspension w/out pay: if established cause then employer will not be faulted for changes that fall short of outright dismissal. However BOP on Er to establish cause… while BOP on E’ee to establish Constructive dismissal. Failure to mitigate can result in denial of damages TEST: whether the employee acted reasonably in refusing the new job
- Summary – situations that do not support constructive dismissal Personality conflict at work (minor) Disputed performance evaluation Disciplinary actions of employer if warranted and reasonable in circumstances Slight change in hours, duties etc or a change that you accepted in writing or by continuing to work with changes Change in work conditions that was foreseeable and could be expected at the time of hiring
- Written complaint to management of bullying/harassment etc If harasser is management, then review complaints mechanism //company policy on complaints, speak to Human Resources and provide a written summary of complaint. Keep copies.
- Written complaint to management of bullying/harassment etc If harasser is management, then review complaints mechanism //company policy on complaints, speak to Human Resources and provide a written summary of complaint. Keep copies.
- Written complaint to management of bullying/harassment etc If harasser is management, then review complaints mechanism //company policy on complaints, speak to Human Resources and provide a written summary of complaint. Keep copies.
- Humiliating Treatment That undermines employee’s authority/damaging to morale That is abusive, unfair or harassing and is NOT condoned Examples: Manager persistently yells at employee in front of other staff and/or customers Boss repeatedly threatens to fire employee Continuing sexual harassment or bullying at work that has been brought to the attention of supervisors, management or the Human Resources Dept. Employer refuses to allow an employee on sick leave or disability leave to return to work despite appropriate medical documentation & reporting and makes unfounded accusations of misconduct Basis : Employer has breached a fundamental implied term of employment that it will treat the Employee with civility, decency and respect and to ensure a healthy work atmosphere TEST : Whether the conduct of the employer is such that a reasonable person should not be expected to persevere. Minor personality disagreements, singular incidents of otherwise harmonious work environment, or slight changes in duties that are reasonable, such as requiring supervisor to assist subordinate workers on the job when necessary – will not result in seriously undermining authority or be considered humiliating treatment Remember test is objective so subjective feelings may not be relevant
- An employee must decide within a reasonable time (usually w/in 10 days) to: accept the change; or 2) consider the contract at an end AND QUIT -or- B) WORK UNDER PROTEST (MITIGATE) Accept the Change: If you accept the change, in writing or by your conduct (i.e. continuing to work with changes) then you have condoned the change and there is no constructive dismissal Dispute the Change & Quit An employee will generally not be considered to have failed to mitigate loss of earnings by quitting, in the following circumstances: Poisoned work environment due to harassment, humiliating and unfair treatment, or human rights discrimination Dispute the Change – Work under protest – to mitigate damages An employee may be expected to work in the changed job in order to mitigate loss of earnings (flowing from constructive dismissal) particularly in cases where there is no objective form of humiliation or loss of status/pay NOTE: an employee is expected to take steps in mitigation that a reasonable person would in the circumstances In order to determine if it is reasonable to work under changed conditions, you need to request nformation about the changes from your employer If you dispute the change but are willing to work under protest in order to mitigate your losses, you should indicate this clearly and in writing FOR ALL OF THE ABOVE – SEEK INDEPENDENT LEGAL ADVICE PRIOR TO MAKING YOUR DECISION
- Dispute the Change – Work under protest – to mitigate damages An employee may be expected to work in the changed job in order to mitigate loss of earnings (flowing from constructive dismissal) particularly in cases where there is no objective form of humiliation or loss of status/pay NOTE: an employee is expected to take steps in mitigation that a reasonable person would in the circumstances In order to determine if it is reasonable to work under changed conditions, you need to request information about the changes from your employer If you dispute the change but are willing to work under protest in order to mitigate your losses, you should indicate this clearly and in writing
- Mitigation earnings while working under protest of change – will be deducted from court award
- The question of whether a constructive dismissal has occurred is a question of FACT. In a constructive dismissal action, the Employee must prove that a fundamental breach of the employment agreement occurred. In cases involving humiliating treatment, the employee must prove that a reasonable person would not be expected to persevere in the circumstances. The court will look at the nature of the employment relationship, as well as express or implied terms of the employment contract. Where the employee has held a number of different positions with the company, which is often the case with long term employees, the court will consider the employment relationship/agrmt based on the position held by the E’ee at the time of the last change. Similarly, although the E’ee may have consented to changes in the past – that does not mean the E’ee has to consent to the NEW change. The court will be looking at whether a fundamental change occurred to the contract or agreement, i.e. position and responsibilities of the E’ee at the time of the alleged breach.
- OHSA amendments coming into effect June 15, 2010 Complaints are made to Ministry of Labour
- ESA: must show forced to quit, i.e. not voluntary & cannot refuse reasonable alternate work Written complaint: be careful, do not write in the heat of the moment, sign & date – keep a copy Unless the situation is dire, then give your employer the opportunity to take corrective measures and respond to your complaint
- ESA: must show forced to quit, i.e. not voluntary & cannot refuse reasonable alternate work Written complaint: be careful, do not write in the heat of the moment, sign & date – keep a copy Unless the situation is dire, then give your employer the opportunity to take corrective measures and respond to your complaint
- Reprisal prohibited
- Not those under federal jurisdiction & more than 5 E’ees Go over risk factors – attachment Not a substitute for calling police Not clear whether employee can make a complaint directly to the Ministry