An employee can understandably feel reluctant to ask difficult questions or raise contentious concerns in the workplace for fear of a supervisor reacting defensively. What happens when an employee who speaks up in the workplace suddenly finds their responsibilities reduced or eliminated? While they remain technically employed, the substance of their role may feel hollowed out. Could this amount to constructive dismissal?
In Ontario, if your employer reduces your responsibilities or alters your position without your consent, it may qualify as constructive dismissal. Even if you haven’t been formally terminated, the law may treat the situation as a dismissal, entitling you to compensation. This article explains how constructive dismissal works and what your options are.
TL;DR – What is constructive dismissal in Ontario?
Constructive dismissal occurs when an employer makes a significant, unilateral change to an essential term of employment, such as reducing responsibilities or demoting an employee without consent. In Ontario, this allows the employee to treat the situation as a termination and potentially claim compensation.
What is constructive dismissal?
Constructive dismissal can occur when an employer makes a substantial change to an essential term of employment to which the employee has not agreed.[1] This unilateral change may signal that the employer no longer intends to be bound by the original employment agreement.
In such circumstances, the employee, despite not being explicitly terminated, may refuse the change(s) and assert that they have been constructively dismissed. A constructive dismissal is treated as a dismissal and an employee is entitled to pay in lieu of notice.
The legal test for constructive dismissal asks whether a reasonable person in the employee’s position would view the change as a substantial alteration of the essential terms of the employment agreement.[2]
Does removing responsibilities qualify?
Not always. The removal of some non-core responsibilities likely won’t amount to constructive dismissal. Employers are generally allowed to make reasonable adjustments within the scope of their managerial authority.
However, a unilateral change to an employee’s role that results in a demotion or loss of status likely amounts to constructive dismissal.
How do you know if your situation qualifies?
If you are unsure if a change in your role qualifies, some useful questions to ask yourself include:
- Has my role been significantly diminished?
- Would a reasonable person see this as a demotion?
- Was this change imposed without my agreement?
- Is the change connected to retaliation or a breakdown in the relationship?
A defensive reaction from a manager or supervisor, followed by removal of responsibilities, can be relevant context.
If constructive dismissal is established, an employee may be entitled to reasonable notice damages and in some cases, additional damages if the employer acted in bad faith.
How can you prove constructive dismissal?
Evidence is critical. An employee will need to show that:
- the change imposed to their duties was a substantial change to their employment terms
- That they did not accept the change
Helpful evidence includes:
- Employment contracts and job descriptions
- Emails or communications showing the change in duties
- Organizational charts or reporting structures (before and after)
- Notes from meetings or conversations
- Witnesses who can confirm the shift in your role
Timing also matters. If you continue working for too long after the change without contesting the change, a court may find that you accepted the new terms.
What should you do if you suspect constructive dismissal?
Before resigning, take these important steps:
- Document all of the changes
- Avoid delay – acting late can weaken your claim
- Get legal advice early.
Resigning without advice can jeopardize your rights.
Frequently asked questions
Can reducing job duties be constructive dismissal in Ontario?
Yes, if the reduction is substantial and affects core responsibilities or status, it may qualify as constructive dismissal.
Do I have to resign to claim constructive dismissal?
In most cases, yes. However, you should seek legal advice before resigning to avoid harming your claim.
What compensation can I receive?
Employees may be entitled to reasonable notice damages, similar to wrongful dismissal, and possibly additional damages in cases of bad faith.
How long do I have to act?
You must act within a reasonable time. Waiting too long may be seen as accepting the changes.
Why contact Whitten & Lublin employment lawyers
If your employer has significantly changed your role without your agreement, you may be facing constructive dismissal under Ontario law. These situations can be complex, and the timing of your response matters.
Contact Whitten & Lublin PC online or by phone (416) 6402667 to speak to a specialized employment lawyer.
[1] Farber v Royal Trust Co., [1996] SCJ 118 at para 24.
[2] Ibid at para 26.
