Editing Constructive dismissal (section)

==Canadian law==
Canadian courts recognize there are circumstances in which the employer, although not acting explicitly to terminate an individual's employment, alters the employment relationship's terms and conditions to such a degree that an employee is entitled to regard the employer's conduct as a termination, and claim [[wrongful dismissal]], just as if they had been let go without any notice or termination pay in lieu of notice.

Constructive dismissal arises from the failure of the employer to live up to the essential obligations of the employment relationship, regardless of whether the employee signed a written employment contract. Employment law implies into employment relationships a common-law set of terms and conditions applicable to all employees. For example, once agreed upon, wages are implicitly locked in by the common-law of contract as an essential term of the employment relationship. In this regard, it is a constructive dismissal if an employer fails to pay an employee.

An employer's breach of the employment contract releases the employee from their obligation to perform under the contract, and thus allows them to treat themselves as dismissed without notice. 

=== Subject ===
Applying the following provisions in Part III of the ''[[Canada Labour Code]]'' to cases of constructive dismissal:

* unjust dismissal

* severance pay and
* individual terminations of employment

=== Interpretation ===

==== Constructive dismissals are covered under Part III of the Code ====
The unjust dismissal provisions in section 240 of the Code cover unjust constructive dismissals. They also cover unjust dismissals made by the open unambiguous action of the employer.

This issue was resolved conclusively in the Federal Court of Appeal decision in ''Srougi v. Lufthansa German Airlines'', [1988] F.C.J. Nº 539. According to the ''Srougi'' decision, once it has been established that a constructive dismissal has occurred, there is no question that the unjust dismissal provisions apply.

The individual terminations of employment provisions may also apply in cases of constructive dismissal. This includes provisions in sections 230 to 234 of the Code, and the severance pay provisions in sections 235 to 237. 

Unfortunately, the characterization of a constructive dismissal is not always straightforward. 

==== Definition ====
The phrase "constructive dismissal" describes situations where the employer has not directly fired the employee. Rather the employer has:

* failed to comply with the contract of employment in a major respect
* unilaterally changed the terms of employment, or
* expressed a settled intention to do either thus forcing the employee to quit

Constructive dismissal is sometimes called "disguised dismissal" or "quitting with cause". This is because it often occurs in situations where the employer offers the employee the alternative of:

* leaving, or
* submitting to a unilateral and substantial alteration of a fundamental term or condition of their employment

Whether or not there has been a constructive dismissal is based on an objective view of the employer's conduct. It is not merely on how the employee perceives the situation.

It is the employer's failure to meet its contractual obligations that distinguishes a constructive dismissal from an ordinary resignation. The seriousness of the employer's failure as well as the amount of deliberation apparent in its actions are also important factors.

The employer's action must be unilateral, which means the employer must do it without the consent of the employee. If it is not unilateral, the variation is not a constructive dismissal but merely an agreed change to the contract of employment.

If the employee clearly indicates non-acceptance of the new conditions of employment to the employer, there has been a constructive dismissal. However, this is only if the employee leaves within a reasonable period (usually short). By not resigning, the employee indicates he accepts the new conditions of employment.

There have been cases where courts have held that there has been a constructive dismissal even though the complainant remains in the employ of the employer. This includes, for example, cases where the employee:

* continues to work under the new conditions in order to mitigate damages, and
* either protests the new conditions explicitly or makes it clear that he still reserves the right to take legal action

In such cases, the employee cannot be said to have condoned or accepted the change in working conditions if the employee:

* formally commences legal proceedings in respect of the change while remaining in the employ of the employer, or
* does not formally initiate proceedings but simply attempts to negotiate the matter while remaining at work

A constructive dismissal takes place at the time the employer changes the terms and conditions of employment. In order to be admissible, the complainant must file the complaint within 90 days of that time as required by subsection 240(2) of the Code.

Exception: This does not apply if the complainant qualifies for extending their time to file under subsection 240(3) of the Code.

In cases of alleged unjust dismissal, a doubt may exist as to whether the complainant has been constructively dismissed. In these cases, the Labour Program shall proceed to assist the parties in reaching a settlement. If the parties do not reach a settlement within a reasonable time, the Labour Program, on the request of the complainant, will refer the complaint to the Canada Industrial Relations Board.

Complainants alleging constructive dismissal should be advised that they may wish to seek independent legal advice.

=== Examples ===
The following examples are of cases in which the courts have found that an employee has been constructively dismissed. The examples are not exhaustive and the results will vary with the facts of each case and with the terms of each employment contract.

==== Changes to the employment relationship ====
Typically, the first way to claim constructive dismissal involves an employer making substantial changes to the employment contract, such as:

# a demotion;
# altering the employee's reporting structure, job description or working conditions;
# lowering an employee's compensation;
# changing hours of work;
# imposing a suspension or leave of absence; and
# relocating the employee's workplace.

In addition, failure on the part of an employer to provide employment standards (e.g. overtime pay, vacation pay, etc.), can result in a constructive dismissal.

Nevertheless, for an employee to have a successful case for constructive dismissal, the employer's breach must be fundamental. What is "fundamental" depends on the circumstances, and not all changes to the employment relationship give rise to a constructive dismissal. For example, administrative, i.e. non-disciplinary, suspensions might not amount to a constructive dismissal if imposed in good faith and justified by legitimate business reasons (i.e. lack of work). As well, a small reduction in salary, in tough times, and administered rationally, might not be a constructive dismissal.

==== Toxic work environments ====
An employee may also be able to claim a constructive dismissal based on an employer's conduct, rather than a change to a specific or implied term of the employment contract. Here, the second way to claim constructive dismissal examines whether the employer's (or employee of the employer) course of conduct, or even a single incident, demonstrates an intention to no longer be bound by the written or implied employment contract. An example of this kind of constructive dismissal is a "toxic work environment". In this regard, if a work environment is so poisoned that a reasonable person wouldn't be expected to return, then constructive dismissal is likely.

A toxic work environment is classically defined as unjustified criticism as well as vague and unfounded accusations of poor performance, especially where authority and respect with co-workers had been seriously undermined and compromised. Another example of toxic work environment is where the employer fails to prevent workplace harassment.

==== Threads ====
In some cases, an employee's decision to quit in response to threats of dismissal or demotion has been found to constitute a constructive dismissal. However, mere encouragement to resign will not necessarily be sufficient. Similarly, a constructive dismissal may occur when an unfair suspension or reduction in salary creates an intolerable situation for the employee.