[The information on this page applies only to non-unionized employees in Ontario, working in provincially regulated industries. It is for informational purposes only and is not legal advice, which cannot be given without consideration of your individual circumstances.]

What is constructive dismissal?

Constructive dismissal is when your employer has not formally terminated your employment, but has seriously changed or breached the terms of your employment contract, to the point that you can reasonably conclude you have been dismissed. 

To qualify as a constructive dismissal, the employer’s breach of the employment contract must be sufficiently serious. Examples of conduct that constitutes constructive dismissal include:

1. The employer unilaterally reduces an employee’s salary, benefits package, or bonus entitlement.
2. The employer unilaterally changes an employee’s hours of work. 
3. The employer unilaterally modifies an employee’s employment status (e.g., from full-time to part-time; from employee to independent contractor).
4. The employer unilaterally relocates an employee’s place of employment, if relocation was not part of the job. 
5. The employer makes significant changes to an employee’s duties, job description, title, rank, or responsibilities. 
6. The employer creates a toxic environment in the workplace.

What do I do if my employer has breached my employment contract?

If you believe your employer has breached your employment contract, you should consult with an employment lawyer to assess whether you have been constructively dismissed. It is very important to consult a lawyer before resigning your employment, to fully understand your rights and the consequences of that action. 

Importantly, if you fail to challenge the employer’s breach or change to your employment in a reasonably timely manner, you may be found to have accepted the employer’s changes to your employment contract, which may jeopardize your claim of constructive dismissal. 

If you do resign, it is important that you make it clear to the employer that you are resigning as a result of the employer’s breach of your employment contract and that you consider yourself to have been constructively dismissed. 

How Much Compensation Can I Receive for a Constructive Dismissal?

The amount of notice an employee is owed on termination, and thus an amount they may claim in an action for constructive dismissal, is based on the two primary sources of law that govern an employment relationship: 

• The Employment Standards Act (ESA)
• The employment contract and the common law

The ESA is the law that sets employments standards in Ontario. Under that law, employees who have been continuously employed for at least three months are entitled to notice in the amount of one week per year or partial year of service, up to a maximum of 8 weeks’ pay. If you have worked for your employer for at least five years, and your employer meets other requirements, you may also be entitled to severance pay under the ESA in the amount of one week per year of service up to 26 weeks of severance pay.

This is the minimum termination pay to which an employee is entitled. However, many employees may be entitled to greater amounts either under their employment contract or the common law. 

The employee’s contract might spell out how much notice is owed. Where it does not, courts will consider several factors, such as: 

• Age;
• Length of service;
• Character of employment; and
• Availability of similar employment

Applying these factors, courts determine an employee’s entitlement to “reasonable notice” that approximates the amount of time an employee would need to find new employment. This amount is generally capped at 24 months, though in exceptional circumstances, courts will go higher. An employment lawyer can help determine what your reasonable notice period may be. 

Depending on the circumstances of your termination, you may be entitled to other compensation for a constructive dismissal, including damages for bad faith in the manner of dismissal or punitive damages.

Do I need to look for work after a constructive dismissal?

Yes. While your entitlements under the ESA are not dependent on you looking for work, any entitlements under your contract or the common law are subject to your duty to mitigate, which means you have to look for work and, if you find work, your damages will be reduced. However, if you negotiate a lump sum severance package, you may not have to worry about mitigation. 

How can I sue for constructive dismissal?

For assistance with the filing of your constructive dismissal claim, you may contact our experienced employment lawyers at RavenLaw LLP. Our lawyers can help you prepare an action in court, and assess whether to proceed by way of a trial or a motion for summary judgment, depending on the circumstances of your case.

Our Experience with Constructive Dismissal

The employment lawyers at RavenLaw LLP have advised and represented countless workers in claims for constructive dismissal throughout Ontario. If you believe that you have been constructively dismissed or believe that your employer has demonstrated the intention to do so, feel free to contact our employment lawyers at RavenLaw LLP to assess the viability of your constructive dismissal claim, and to navigate the options towards the resolution you are seeking. 

We are here to help. Please call 613–567–2901 or email info@ravenlaw.com to consult one of our experienced employment lawyers. 

By Amanda Montague-Reinholdt

If your employment has been terminated without cause, one of the first questions an employment lawyer will ask you is whether you have a written employment contract. If you do, the employment lawyer will review it to determine if the contract sets out your entitlements when your employment is terminated without cause. Many employment contracts state that employees will only receive the minimum notice and severance entitlements under the Employment Standards Act (ESA). If that clause is properly drafted, it may deprive an employee of their right to a longer notice period under the common law. 

In a judgment rendered last year, the Ontario Superior Court identified a different basis for employees to argue that this type of contract provision cannot be applied to limit their entitlements. The Court held that an employer’s bad faith conduct can amount to a repudiation of the employment contract and invalidate the contract’s termination clause. If this judgment is followed in future cases, a termination clause that, on its face, complies with the law could still be invalidated, based on the employer’s conduct.

In Humphrey v Mene, the plaintiff had helped to create a new start-up company and was subsequently appointed as its Chief Operating Officer. She later signed an employment agreement that contained a termination clause limiting her rights to the minimum entitlements under the ESA. As a relatively short service employee, she was only entitled to two weeks’ notice under the ESA. However, the Court ruled that Mene could not rely on the termination clause in Ms. Humphrey’s employment contract.

First, the Court held that the employment agreement was void because Mene gave Ms. Humphrey no additional consideration for signing it. She was, under the law, already an employee before signing the contract, and received no additional compensation or benefit under the agreement. Therefore, the terms in that agreement were not valid or enforceable.

The Court went on to hold that, even if the employment agreement was valid, the termination clause still did not apply. The Court noted, in passing, that the termination clause did not expressly apply to the circumstances in which Ms. Humphrey was terminated (a constructive dismissal based on a toxic workplace). However, the main basis for the Court’s conclusion was that the employer’s overall conduct amounted to a repudiation of the employment agreement and therefore the employer could not rely on the provision limiting Ms. Humphrey’s entitlement when terminated without cause.

To justify this conclusion, the Court’s judgment recounts numerous examples of the employer’s reprehensible conduct, including:

• After Ms. Humphrey requested a review of her salary, her employer immediately suspended her from her position, and informed her she would either be terminated or demoted.
• The employer sent a company-wide message to employees strongly implying Ms. Humphrey had engaged in some form of wrongdoing.
• The employer knowingly made a false claim of just cause to terminate Ms. Humphrey’s employment, and only withdrew the claim for just cause late in the litigation process.
• Ms. Humphrey’s boss created a toxic working environment by continually swearing at, humiliating, and belittling her.

Ms. Humphrey was awarded significant damages as a result of the employer’s breach of her contract, including a notice period of 11 months, as well as aggravated and punitive damages.

This judgment has potential significance for many employees who are badly mistreated by their employers. The standard to be met to invalidate an employment contract is clearly very high; however, in cases where the employer engages in serious bad faith conduct, employees can avoid the application of a contract provision that harshly limits their entitlements on termination without cause. It remains to be seen whether other judges endorse this approach in future cases.

If you have experienced bad faith conduct, harassment, or mistreatment by your employer, and wish to review your employment contract and the circumstances of your employment, contact one of our experienced employment lawyers here.

[This article is for informational purposes only and does not constitute legal advice, which cannot be given without consideration of your individual circumstances.]

On May 9, 2022, Dayna Steinfeld will be presenting on a panel hosted by the Manitoba Bar Association’s Alternative Dispute Resolution, Labour & Employment Law, and Legal Research sections. Dayna will discuss legal research and practice tips for mediations and informal proceedings in labour and employment law.

For more information or to register for this lunch-hour session, please visit the MBA website.

On June 2, 2022, Alison McEwen will present as a speaker during the Law Society of Ontario’s Eight-Minute Employment Lawyer. Alison will be discussing the use of hybrid work arrangements since COVID, particularly in situations involving the duty to accommodate.

For more information on this upcoming presentation or to register, please visit the event website.

On March 22, 2022, Raphaëlle Laframboise-Carignan will present as part of a speakers’ night series being held by Mood Disorders Ottawa. Raphaëlle will be discussing workplace accommodations, long-term disability (LTD) benefits, and other disability benefits available when a person cannot work due to injury or illness.

For more information on this upcoming presentation, please visit the event website.

During the week of March 14, 2022, RavenLaw represented the firm at the 2022 uOttawa Career Connections event, held virtually.

Morgan Rowe, Zachary Rodgers, Claire Michela, and Simcha Walfish participated in panels, roundtables, and meet and greet events with law students and particularly spoke about their work representing unions and employees. Thank you to the organizers for putting on this great event, and thank you to the uOttawa students for your engagement and enthusiasm!

If you’re a student looking for more information about the summer or articling experience at RavenLaw, please contact us at studentrecruitment@ravenlaw.com.

On December 21, 2021, Raphaëlle Laframboise-Carignan presented to l’Association des juristes d’expression française de l’Ontario (AJEFO) on employment laws and policies related to COVID-19. Raphaëlle discussed the effects of these types of policies on the workplace, accommodation issues, exemption requests, and the potential consequences where employees do not comply with COVID-19 policies.

As many of our friends and colleagues in the labour community may already know, David Yazbeck has left private practice at RavenLaw to work within the labour movement as the Director, National Labour Relations, at PIPSC. David has a long history representing PIPSC and its members, championing human rights and whistleblower protections in numerous precedent-setting cases on the union’s behalf. This is an exciting opportunity for David to continue to pursue his life-long commitment to workers’ rights, on behalf of an important voice for labour in this country.

David leaves private practice with a legacy of historic victories at all levels of court, and a demonstrated commitment to advancing social justice issues through important pro bono work. He has litigated important cases involving racism and anti-Black racism, and his commitment to the arts, and artists, led to a Supreme Court of Canada ruling ensuring artists could meaningfully participate in collective bargaining. We will miss David’s many contributions to RavenLaw, including his vast experience litigating complex issues on behalf of workers, most notably in the areas of human rights and pay equity. It goes without saying, however, that we will miss having him as a colleague even more.

While it is difficult to lose a founding member who has done so much for the firm, we know David will continue to play an important role in the labour movement, using his energy and talents to advance the interests of workers across Canada. We wish David all the best in this next step in his career and look forward to continuing to work alongside him in the future.

On February 9, 2022, Morgan Rowe presented as part of a panel on “Queerness and the Legal Workplace”, hosted by OUTLaw and the University of Ottawa’s Faculty of Law. Morgan and the panel discussed common issues that LGBTQ+ lawyers and law students encounter in the legal profession and how to navigate those issues.