What Is Constructive Dismissal? Employment Lawyers Calgary Explains

Originally posted on https://yycemploymentlawgrp.com/constructive-dismissal-employment-lawyers-calgary/

The term “constructive dismissal” commonly refers to a situation where an employee resigns, or is thinking of resigning, after significant changes were unilaterally made to essential terms of their employment agreement; without their valid consent. The sudden or gradual changes can relate to, among other things, a reduction to wages and prestige, altered duties and responsibilities, and intimidation, harassment and bullying.

When employers engage in this conduct, it usually has the practical effect of strong-arming their staff out the door without severance and other entitlements. The employee who is forced to resign is often unaware that this type of scenario is potentially unlawful, as a breach of contract. In some cases, employees don’t even realize that a constructive dismissal has occurred until after they’ve found a new job or spoken to somebody about it several months later.

Understanding constructive dismissal or “disguised dismissal” can be tricky. Mainly because of the varied situations that can encourage an employee to quit on their own. This can make constructive dismissals hard to pinpoint without the involvement of legal counsel.

Some may argue that there’s a fine line between an employee resigning and constructive dismissal. Often times, this holds true. But the good news is this: our Calgary employment lawyers have fought and won many of these cases.

We have the training and knowledge necessary to identify this type of conduct. Our experience enables us to know how to properly help Calgarians fight it.

If you suspect constructive dismissal is at play at your current or last position, read on to learn more. Importantly, if you are still employed, do not resign or accept proposed changes until after having first consulted with an experienced Calgary employment lawyer.

Like we mentioned earlier, constructive dismissal is often the result of major changes made to the employment agreement. When faced with these changes, employees believe their only option is to resign. In fact, this is exactly the employer’s intent in many cases we see.

The following are some of the common scenarios we see at our Calgary employment law practice.

Has your reporting structure changed? Do you no longer have subordinates or do you now have to perform a significantly different role within the organization? Facing a demotion is not only challenging from a personal and emotional level but typically also financially.

These types of changes often end with a significant reduction in salary or benefits. It can be a difficult transition for the employee. Other times, a reduction to or change in duties and responsibilities may not accompany a reduction in salary. Whatever the case may be, you may have been constructively dismissed.

This scenario often plays out when companies undergo major shifts, such as a merger or acquisition, or are otherwise seeking to reduce costs.

Imagine going to work every day and worrying that your boss will fire you at any given moment.

This is a stressful reality for many workers. A result of their employer constantly threatening to dismiss or demote them, these employees will often leave their position to find more reliable work, but miss out on the severance they would have received if their employer had officially dismissed them. Just the employer’s intent!

You have the right to work in a safe and harassment-free workplace. Your employer similarly has a corresponding duty to prevent bullying, harassment and intimidation, and to investigate your concerns in good faith.

If you’re fearing going to work because of the bully across the hall from you and are frustrated by your HR department’s lack of concern or attention, let us help you. This may entitle you to damages and severance as a constructive dismissal.

When employees are on suspension or facing other disciplinary action, there is often uncertainty regarding their position at work. Out of fear of reduced hours, demotion or possible termination, these employees sometimes opt to seek out new employment. Was the suspension or disciplinary action even justified or warranted in the circumstances? Our employment lawyers will assess the facts and with our vast knowledge of the law, we’ll make sure you are protected.

A reduction in hours, salary, commission, benefits or bonus structure can put an employee and their family at risk of financial and psychological instability. Fear can force the employee to seek new work to protect their financial future.

Keep in mind that not every change in pay, hours or benefits necessarily triggers a constructive dismissal. Employers generally have the ability to manage their affairs according to their business judgment; crucially, this includes restructuring your compensation framework. Only if these changes are sufficiently large (or if they occur in addition to other changes) may the law regard you as constructively dismissed. This requires a well-considered legal opinion, so always first consult an experienced employment lawyer before taking any action.

Employers may ask you to sign or otherwise acknowledge the proposed changes. It’s important for all employees to note two key things:

1. Generally, if you sign or accept, you’re bound and you will preclude yourself from taking any legal action thereafter. Your employer must provide you with a reasonable opportunity to consult with independent legal counsel. Exercise that right and say nothing about the proposed changes until you’ve spoken to an experienced employment lawyer;

2. Even if you do not actually sign anything or otherwise explicitly signal your acceptance, if enough time has elapsed since the changes were implemented by your employer without your taking any action, you may be deemed to have accepted them. Contact us as soon as you become aware of the impending changes and preserve your right to take action, as necessary.

Check out some of the examples below that we have encountered and see if any sound familiar.

• Your employer consistently schedules you outside of your contractually agreed hours of availability, preventing you from taking care of your children while your spouse is at work.
• The company vehicle you rely on and provided to you as a condition of employment is unexpectedly revoked, and you no longer have reliable transportation to work.
• Your employer transfers you to the Edmonton office, and suddenly you are either facing a three-hour commute to work or the reality of uprooting your family.
• Your employer decides to slash your pay and/or restructure the benefit plan, leaving you without the necessary financial means and medical coverage you rely on.
• Your work schedule suddenly changes, and the 40 hours work week you depend on to support your family has been slashed down to 12 hours.

When a true resignation occurs instead of a termination or dismissal, the employee forfeits the severance and notice they would have been entitled to. This saves the employer money, especially if the staff member in question has seniority. There is strict legislation regarding the minimum severance, notice and pay-in-lieu for the termination of long-term staff members, in addition to common law entitlements, and this falls by the wayside when a true resignation occurs. For obvious reasons, your employer may try and put the “squeeze” on you and force your resignation, rather than outright dismissing you to reduce its bottom line liabilities. What your employer may not know is, this sort of conduct can end up costing it even more than if it treated your fairly from the beginning. Although it’s not always the employer’s intent underlying significant changes to the terms of your employment, it unfortunately is more often than it should be.

The good news is that an employment lawyer can help you fight for this lost compensation in the event constructive dismissal was at play. Let’s assess the facts of your case and protect your livelihood.

We have recently written a blog on how to prove constructive dismissal in Calgary. We strongly recommend checking out that piece if you have found yourself dealing with this stressful situation in the workplace.

In the meantime, watch out for these two scenarios at work:

1. Keep an eye out for suspicious changes to your employment agreement. 

• Do you notice any changes to hours, location, or wages?
• Has your job title or responsibilities been affected?
• Have there been any changes made to your benefits and entitlements?

2. Examine what role management and the employer play.

• Are there threats of dismissal?
• Do they seem unwilling to honour the original employment agreement?
• Is there bullying or harassment?

Constructive dismissal can be challenging to prove without the appropriate legal guidance. But we believe that standing up to this unlawful behaviour is a necessary step in improving Calgary’s workforce.

We understand that pursuing legal action can be stressful, especially if you’re in the midst of finding a new job and supporting your household. But we are here to advocate for you, the employee. Our employment lawyers will fight to prove your constructive dismissal case and can help identify how much money you employer must pay you.

Connect with one of our employment lawyers. At YYC Employment Law Group, we are here for you. Any time, any employment issue, and any workplace. We’re different.