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Was that Constructive Dismissal?

Posted by Graeme Maitland — filed in Business Law

A bad economy can lead to companies looking to cut costs which can lead to layoffs.  While that is the most well know type of dismissal, there is another type where people stay employed, but their work changes so much it becomes unrecognizable.  This is called constructive dismissal.

What is Constructive Dismissal?

Constructive dismissal is “a change in an employee’s job responsibilities and/or benefits so significant that, viewed objectively, the employer would be deemed to have radically altered the nature of the employee’s service contract. If such occurs, the employee is justified in resigning his or her position and maintaining an action for damages as if actually dismissed without cause.

Unpacking that, constructive dismissal is practically a demotion or other substantial change in employment that could lead to resignation.  Going from being a manager to working in the mail room, that would be a clear example of constructive dismissal.

What does it take?

Almost all cases are rarely as black-and-white as the mail room example.  And, in an economic downturn, employers have a degree of discretion in terms of how they keep the company running.  An employee might be laid off, but they could be given a radically new job description and stay employed instead.

Management must inform an employee of these changes.  Because this is employment law, there is a requirement for employers to provide reasonable notice of the change in employment.  If changes do occur, even if there was no sufficient notice, an employee can agree to the changes by continuing to work in the new position for a reasonable period of time.

To make a claim of constructive dismissal, you first have to quit your job.  The Courts may not hear your case for months and you will also need to mitigate your losses during this.

If you are being sued for constructive dismissal, or believe that you have been constructively dismissed, speak to one of the lawyers at Aarbo Fuldauer LLP in Calgary.

Address: 3rd Floor, 1131 Kensington Road NW, Calgary, AB, T2N 3P4

Phone: (403) 571-5120


The information in the blog is not legal advice. Do not treat or rely upon it as legal advice.  If you require legal assistance, please contact a lawyer
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