Constructive Dismissal
A constructive dismissal is a legal term that occurs when an employer changes fundamental terms and conditions of employment without the employee’s consent. For instance, a significant change in job duties or a reduction of salary can lead to a constructive dismissal claim. These types of changes can also include a move that fundamentally alters the commute or work-life balance, and is especially relevant if it is not accompanied by reasonable notice.
While many employers are attempting to reduce costs by furloughing employees, some are going too far and may be creating intolerable working conditions. This can open them up to claims for breach of contract and/or constructive dismissal. The legal test is that the change in workplace conditions must be so severe that a “reasonable employee would feel compelled to resign.” To determine if this is the case, courts consider several factors, including whether an employer has breached the Employment Standards Act (ESA) or other employment law obligations. This includes critical employment terms such as hours of work, minimum wage, and leave entitlements.
A common example of a potential constructive dismissal is an employer who decides to reduce the number of hours available during the pandemic. This can significantly impact the worker’s ability to meet family or personal obligations. It can even make it difficult or impossible to maintain a work-life balance.
Constructive Dismissal During Furlough
This is an issue that could be easily avoided by providing the affected employee with appropriate severance pay. In addition, an employer can mitigate the risk of a constructive dismissal by making sure that it is acting in good faith and that any changes to working conditions are not disproportionate to the business needs. Another way that a business can avoid a constructive dismissal is by using an employee net promoter score tool, such as Factorial, which allows businesses to understand and track general sentiment. This gives them visibility over employee satisfaction levels and helps nip issues in the bud before they reach constructive termination territory.
In some cases, an employer will be able to prove that a negative change in working conditions was not necessary and that it was disproportionate to the business’s need. This can be argued where the employer has a history of engaging in unfair labour practices and there is a clear link between the change in work conditions and the negative impact on the business.
It is important to note that while it is possible to assert a claim for constructive dismissal during furlough, such a claim is typically more successful in non-unionized environments than in unionized workplaces, where the grievance process has already begun. Also, the more evidence an employee can produce of their attempts to address concerns with management or seek resolution through internal channels, the stronger their case will be.
If you believe that your working environment has been made intolerable by your employer, it is important to contact an experienced employment lawyer as soon as possible. An experienced lawyer can assist you in preparing a claim and ensuring that you are protected by Ontario employment laws, including severance pay and other statutory entitlements.