What is Constructive Dismissal: Were You Wrongfully Fired?

Knowledge is valuable, especially when someone tries to take advantage of what you don't know. This can happen at work when an employer sets things up so you can't do our job properly, leading to what's called constructive dismissal. In this edition, we'll look at this issue and talk about what to do if it happens to you.

A question was posted on NSNews and was about a person who was fired for cause from their remote part-time job without receiving termination pay. A month prior to their dismissal, their boss hadn’t been responding to any of their messages, including sign-offs for important work, which prevented them from doing their job. Legal professionals have told them they have a clear case for constructive dismissal. The person was asking for advice and received two replies that we will review briefly:

The first answer, Tong Jun (Roger) Zhang, employment lawyer, Purnell Employment Law, Calgary

It appears your employer may have set you up to fail and then terminated your employment for just cause, which is only justified in cases of a fundamental breakdown in the employment relationship. Termination for just cause requires the employer to follow proper procedures, including applying progressive discipline. This involves informing the employee of their misconduct and giving them a reasonable opportunity to correct it. Your employer's lack of communication prior to your termination suggests "manufactured just cause," where they hindered your job performance to justify termination. In such wrongful dismissal cases, the employer must prove they applied progressive discipline; otherwise, they may be liable for severance and other damages. The claims process varies by province and court.

The second answer, Shibil Siddiqi, employment and human rights lawyer, Progressive Barristers, Toronto

As your query suggests, affordable and effective access to justice is a significant issue for many Canadians. However, there are various private and publicly funded services available to provide employment law advice. Seeking legal advice on filing an employment standards claim might be a more efficient and cost-effective solution than pursuing a small claims court action. While private sector lawyers generally offer legal advice for a fee, some may decline cases that require only brief services. Many firms and solo practitioners offer "unbundled" services and consultations, so you may want to focus your search on these lawyers.

We will use this article as an opportunity to inform our subscribers about constructive dismissal.

Constructive dismissal, also known as "disguised dismissal" or "quitting with cause," occurs when an employer does not directly fire an employee but instead fails to comply with the employment contract, unilaterally changes the terms of employment, or expresses an intention to do so, forcing the employee to quit. This differs from an ordinary resignation due to the employer's breach of contractual obligations. Constructive dismissal is determined objectively based on the employer's actions, not the employee's perception. The change must be unilateral, and if the employee rejects the new conditions and resigns within a reasonable time, it is considered constructive dismissal. Employees may still claim constructive dismissal while working under new conditions if they protest or take legal action. Complaints must be filed within 90 days of the change, unless an extension is granted. In unresolved cases, the Labour Program can assist in reaching a settlement or refer the complaint to the Canada Industrial Relations Board. Independent legal advice is recommended for those alleging constructive dismissal.

Here are examples where courts have found constructive dismissal, although outcomes vary based on specific case facts and employment contract terms:

• Changes in Powers or Duties: Constructive dismissal often occurs when an employer significantly alters an employee's responsibilities, such as reducing a plant superintendent's duties to those of a yard foreman, leading to a loss of prestige and status.
• Threats and Suspensions: Quitting due to threats of dismissal or demotion, unfair suspensions, or salary reductions creating intolerable conditions can be considered constructive dismissal.
• Reduced Hours, Salary, Status, or Benefits: Significant reductions in work hours, major relocations (unless previously known as part of the job), changes in employment status (e.g., from employee to independent contractor), or removal of essential work tools (like a company vehicle) without valid reasons can qualify as constructive dismissal.

Addressing Constructive Dismissal: Your Legal Options and Guidance

If you believe you've experienced constructive dismissal, you can file a complaint through either Small Claim Court or Employment Standards Claim. It's crucial to seek advice from a qualified lawyer before taking any action. 'Legal Help BC' offers free answers to legal questions, and you might qualify for a free lawyer through 'Legal Aid BC'.

At Burke Recruiting Inc., we understand the complexities surrounding constructive dismissal and wrongful termination. If you're navigating these challenging situations or seeking advice on your employment rights, our team is here to help. Visit Burke Recruiting Inc. to connect with professionals who can guide you through the process and support your career needs.