Our much-awaited topic is here! In episode 21 of All Worked Up, our hosts break down the somewhat abstract legal definition of constructive into dismissal into terms real humans can understand. Constructive dismissal can take many forms, and sometimes it’s hard to tell if it applies to your situation. Jill and Dana give examples of what constructive dismissal can look like, legal recourse, and what kind of entitlements are available if it’s happening to you.

Full transcript below:

VO: This podcast is produced by Nelligan Law. 

Jill Lewis: Welcome to All Worked Up, the podcast where two employment lawyers break down real life workplace issues that affect real people. And we’re super excited to bring you this podcast aimed at making employment issues interesting, accessible for employees and employers.

Welcome to All Worked Up. I’m Jill.

Dana DuPerron: I’m Dana. And Jill, what’s got us all worked up today?

Jill Lewis: We are worked up about constructive dismissals today.

Dana DuPerron: Yeah.

Jill Lewis: Ooh, I think we’ve been teasing this off and on.

Dana DuPerron: Yeah, this is a big, big topic that people always come – they want to know more about – constructive dismissals can be really tricky, a little bit difficult to make out by yourself, so it’s really helpful to have a lawyer involved when you’re going through a constructive dismissal. How do we want to break this down? What?

Jill Lewis: Okay I honestly think that probably half of the people I see, it’s usually with a potential constructive dismissal claim.

Dana DuPerron: Yeah.

Jill Lewis: Like it’s more and more and more. So what is a constructive dismissal? [Laughter] You know what, it’s tricky yeah.

Dana DuPerron: You know what, do you want like the legal definition, or I guess how I try and tell people is that constructive dismissal is when your employer has – there’s two different ways – either has changed your employment in such a way that the original contract no longer exists. 

Jill Lewis: Yeah, fundamental, unilateral change with which you do not agree.

Dana DuPerron: Exactly. A significant fundamental – okay. So those are like, they changed your duties significantly. Maybe the reporting structure, like maybe you were, when you were hired, you were the director of marketing and now suddenly there’s been like a reshuffle, and you are just like this senior associate in marketing. Now you’re reporting to somebody different. Like if the reporting structure changes, the duties change. Salary definitely is a big one. So those are like those big terms, those big changes.

And then there’s other situations, which is where we see, like people come to talk to us and often they don’t know this is the situation they’re in. But they’re in a toxic workplace. Or their employer is creating a workplace in which they feel they’re being pushed out.

Jill Lewis: Yeah. Or not eve pushed out, just like so miserable to be there.

Dana DuPerron: Can’t even walk into the building. And I can’t tell you how many times I’ve heard people say like, “I’ve been sitting in the parking lot. And I just don’t want to go in.” Not because I don’t want to go in, like I’m sick. I physically feel sick to go into the workplace.

Jill Lewis: Yeah.

Dana DuPerron: And then it’s like okay, well let’s break that down because that shouldn’t be happening. Like what is it that’s making you sick and okay, well it’s a colleague and you know, there’s been these situations and I’ve notified HR and they haven’t been doing anything about it. Or maybe like bullying or group bullying or something like that.

Jill Lewis: Yeah.

Dana DuPerron: Those are the cases that seem to be coming up more and more. And what do you do? What do you do in a constructive dismissal?

Jill Lewis: And that’s like, I’ve seen tricky ones lately too, with like more minor changes, or like a reshuffle that it’s just like, “Well I don’t want to do those duties.” Or what do you do? And I think it starts with knowing what you could possibly get if you claim constructive dismissal, and it’s basically what you would get if your employments were actually terminated without cause.

So it’s like the damages that you’re entitled to if you successfully prove a constructive dismissal are the same as if your employment’s terminated with no fault.

Dana DuPerron: You’d have to go all the way back to our other episodes.

Jill Lewis: I know, I know, all the way back. Head on back to the beginning. But what’s in your contract? How long have you been there? What’s the minimum notice? What would your notice be under common law? If you’re entitled to common law reasonable notice, what is that?

Now there can be some other damages available to you, like if it is a toxic workplace, you know, there might be bad faith treatment, punitive damages, those types of things, that you might be able to get at, often tricky.

Dana DuPerron: Those are harder. But we usually throw them at a demand letter or a claim.

Jill Lewis: I mean if there’s any basis for it, yeah. Wring that cloth, see what’s out there, right? So that’s what you would get. But employers don’t always want to negotiate, right. So you send a letter saying, “This person’s been constructively dismissed,” and there’s kind of a couple of ways that that can go. They could say, “No they haven’t and we’re treating this as a quit.” Which is the worst-case scenario and we’re pretty careful in how we draft these letters for this very reason. 

Dana DuPerron: Yeah, so we’re careful never to trigger the constructive dismissal right away unless we have instructions from the client to do so because once you’ve sort of lie waved that flag, that’s the termination date, right?

Jill Lewis: Yeah.

Dana DuPerron: Arguably that’ll be the date that they use. And so any time following that date could be considered working notice or like if they’re on a short or long-term disability, that could start eating into a notice period, so you got to be like uber careful. Especially if you are starting to – if you’re raising complaints about like a toxic workplace or harassment in the workplace and the employer says, “Oh, well now that I know, I’m going to do an investigation.”

Jill Lewis: Which I’ve seen happen several times, more and more.

Dana DuPerron: More and more.

Jill Lewis: Which is the right thing.

Dana DuPerron: It is the right thing to do. Like unfortunately some of these employees just want out. They want out entirely. They don’t want an investigation, gone too far.

Jill Lewis: It’s hard to sort of fix anything. It’s too late.

Dana DuPerron: It’s too late for a lot of them. But that is the employer’s right, is to do this investigation.

Jill Lewis: And duty, if they can say, “We didn’t know before.” Even if they should have known.

Dana DuPerron: Exactly.

Jill Lewis: Like once it’s clearly brought to their attention, they often, they have to, under the Occupational Health and Safety Act or the Canada Labour Code. Like you have an obligation to do this.

Dana DuPerron: So okay, so we’re careful to do – careful not to use the trigger. We usually say they’re in the position. They’re in a constructive dismissal position, we think. Like a lot of times, we try and like massage the language so that we’re tyring to invite a mutual exit, right, where both parties are a little bit in control. And that works sometimes, especially if there just seems to have been some issues both ways in the workplace.

Jill Lewis: Yeah, sometimes it’s gone too far. Sometimes it’s a situation where the employer wants to get rid of the employee anyways but feels that they can’t because they’re worried about certain allegations being made or something. So they’re like, “Okay, good you want to talk exit? Let’s talk exit.” And then it’s great for everybody.

Dana DuPerron: Maybe that employee’s been using some sick leave because if they’re in a toxic workplace, they may have been getting stressed or feeling anxiety, and so they’ve accessed their sick leave and now the employer doesn’t want to get rid of them because then there will be human rights allegations. So yes, sometimes it can work for everybody’s advantage.

But then at the other side, they could just say no.

Jill Lewis: We don’t agree. Keep working.

Dana DuPerron: We don’t agree, keep working. And the idea around quitting too, like you brought that up. That’s also like when you’re being constructively dismissed, you are not quitting.

Jill Lewis: No, yeah you have been forced out of your position. Like it’s a termination, yeah.

Dana DuPerron: Don’t use the resignation.

Jill Lewis: Don’t use the word resignation.

Dana DuPerron: Don’t use the R word ever.

Jill Lewis: If you feel you’re in that position, if you’re like – don’t go into that meeting. I mean ideally you speak to a lawyer first. But don’t go into the meeting if you haven’t spoken to a lawyer and say, “I’m resigning because I have to.” Just don’t use the word resign, quit.

Dana DuPerron: You’d say I’m leaving, or – right.

Jill Lewis: I’ve been forced. Like I have no other choice. I feel I’ve essentially been dismissed. I have no other choice. I can’t continue, not continuing on or whatever. A resignation does have to be clear and unequivocal. Sometimes you know, we can make the case after the fact. It’s a lot easier if we don’t have to.

Dana DuPerron: Oh it’s so much harder. And we have had that. People get really upset in the moment. And they’ll write the letter. Sometimes they’ll put it in writing, “I’m quitting.”

Okay so that’s one part of constructive dismissal, is you do have to be careful about the words you’re using. And then you should offer the employer at some point, an opportunity to address the constructive dismissal. So this is kind of going back to that first prong of like changes to your position.

If you’re being presented with these changes, you have to – you should notify the employer that you don’t agree with them.

Jill Lewis: Yeah, you have to object. If you don’t, you’re deemed to have acquiesced. Like they can’t say, using your example before, “Okay, now you’re not the director. You’re like a manager reporting to a director,” or something, and you just go along with it for like six months and then are like, “Hey actually that was a constructive dismissal back then.” They’re like, “No, no, no, no.”

Dana DuPerron: Not going to fly.

Jill Lewis: You agreed. Like you, through your actions, agreed to this change. You acquiesced. So yeah, you have to act pretty quickly. So if you’re having these issues, talk to someone.

Dana DuPerron: Yes, and then you can have sort of a trial period if you want, and you can tell your employer that, that I believe I’m being constructively dismissed. These are significant changes. But I’m willing to try it out for – what would you say? A couple of weeks. Like I wouldn’t tell someone to do…

Jill Lewis: Yeah, like I mean you have to – depending on what the change is, like however long it might actually be reasonable.

Dana DuPerron: Yeah, you know what I’m thinking of is like companies that change their commission plans. So that in some circumstances, people think like, “I could actually be making nothing,” or significantly less, but maybe I’ll try it out to see how this all kind of unfolds.

But then you want to notify your employer. You have to notify your employer that I’m still persevering my right to raise the constructive dismissal if at the end of this trial period – 

Jill Lewis: It doesn’t work out.

Dana DuPerron: It doesn’t work out. Or yeah, the other option is you just like you treat it as a constructive right away. And I just tell people, if they’re coming, like we see a lot of people who say, “I can’t go back.” I have to – I’m leaving, I’m quitting. I’m quitting after this. Should I send a letter?

And I always think like, well if you’re going to quit, send a letter.

Jill Lewis: Why not? If it’s because of the conditions in the workplace, like either some big change or whatever. yeah, if you’re just going to quit, let’s have that conversation. If you’ve got another job to to go to right away, you might not have any losses. That’s okay. You don’t have to volunteer that information right after that. But if you’re asked, it’s going to come out.

So but yeah, I say its often worth a kick of the can. And it’s also – I have had several people who are – when we say it like that, it sounds like you’re – like it’s not an actual case but it is, it’s just that they can’t take it anymore. 

Dana DuPerron: Exactly.

Jill Lewis: And I’ve had a number of people who are like, “I don’t have another job to go to. I am not going back to this job no matter what. I will make it work.” And then it’s like, okay, well fine. Then we take the risk that you say you quit, because that’s what otherwise would be the case. Like you’re not losing anything there. 

The other thing that we have to talk about is when it’s like changes to your duties, but the workplace, it’s not a toxic workplace. It’s not humiliating, embarrassing or whatever for the changes that they’ve made.

Dana DuPerron: The salary stays the same. I’ve seen a lot of that. The job changes but the salary always remains the same. And employers really try and latch on to that piece.

Jill Lewis: And then it’s like, even if you allege the constructive dismissal, you might have to stay in the role to mitigate your losses. 

Dana DuPerron: Ooh yeah. Do you have to stay? Do you have to stay?

Jill Lewis: If it’s not objectively humiliating, embarrassing, and it’s like no big salary cut, and you can do the job.

Dana DuPerron: Yeah, so right, okay. So what does that mean. Let’s break that down. So if you – if a judge said yes, stay, now when your employer changed all of your duties, you’re no longer managing this group, you’re managing the other group. Yeah, I think those are significant changes to your position. Constructive dismissal has been triggered. It’s a termination. But your employer is still giving you an opportunity to work. It could be considered –

Jill Lewis: Yeah, you have to work there for those, whatever your notice period is, less your statutory severance which has to be paid as a lump sum. So yeah. So you got to be aware of that one.

Dana DuPerron: So constructive dismissal.

Jill Lewis: Yeah, they’re tricky. 

Dana DuPerron: They’re so tricky. I was thinking of another, around the duties, like the change of duties. Ooh, check your contract because a lot of the language nowadays will say that your employer, like they’ll keep duties really broad, and they’ll say that your employer can make changes at any time to your duties and no such changes will amount to a constructive dismissal.

And that’s lawyers like us. That’s us trying to capture these situations where employers were restructuring, changing people’s duties, and then getting a bunch of lawyer letters. So you know, be aware of that. You may see some of that language, and so you may have no leg to stand on.

Jill Lewis: And even with compensation cuts, it usually should be more than 20% for it to actually be constructive dismissal. 

Dana DuPerron: Covid hits and all of the employers were starting to reduce people’s salaries. None of them are really going to under 20%, not usually, and so yeah, I was shocked that actually had to be like more than 20%. That felt like – 

Jill Lewis: Typically. There’s no like, as far as I’m aware, not like a specific, but that kind of rule of thumb that sort of everyone kind of goes with. So I think the rationale for that being that if you’re expected to find another job to mitigate losses going from a termination, it’s usually around earning sort of 80% of what you were earning before.

Dana DuPerron: That makes sense. 

Jill Lewis: So that’s kind of why that cut is what we’re looking at there. So there are a lot of moving pieces in constructive dismissal. What I would like people to take out of this, if you’re thinking about constructive dismissal because I’m sure there are lots of people who are in situations in the workplace and Google things, the big situations are fundamental unilateral change that you don’t agree with, or toxic workplace. Talk to someone sooner rather than later, because you can’t sit back for too long, and that it is sort of a delicate situation to handle there.

Dana DuPerron: A bit of a dance. 

Jill Lewis: Yeah, and it’s nice to dance with a partner. I don’t know. I don’t know where I was going with that. Go see a lawyer because I start talking and I don’t know where I’m going. 

Dana DuPerron: Yeah, constructive dismissal, definitely talk to somebody as soon as you feel like any of that, if you feel that kind of gut. Do a gut check, and if you’re finding it really uncomfortable to go into the workplace, you might want to a lawyer.

Jill Lewis: Or there’s big changes, yeah, talk to someone. 

Dana DuPerron: All right.

Jill Lewis: That’s it.

Dana DuPerron: That’s it. Okay. Talk to you next week.

Jill Lewis: Next week, woohoo!

[End of recording at [00:14:45]

This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2021 Nelligan O’Brien Payne LLP.

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