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What is Constructive Dismissal?

Employment Law | May 28, 2021

Do you feel as though you are being pressured to quit your job? Have your job responsibilities suddenly changed without any notice? If so, you may be in a constructive dismissal situation. These situations can occur as a result of major changes to your job responsibilities, threats from your employer, and reduced hours. Knowing what constructive dismissal is will help you determine if you have a case. That is why the employment lawyers at Linley Welwood have provided some important information on constructive dismissal and examples of situations where it may apply.

Learn about what is meant by wrongful dismissal and how it differs from constructive dismissal.

Definition of Constructive Dismissal

The term “constructive dismissal” is used to describe situations where an employer has not directly fired an employee, but the employee feels as though they are forced to quit. Constructive dismissal is sometimes referred to as “disguised dismissal” or “quitting with cause”. This occurs in situations where the employee is offered the choice of leaving their position or submitting to a unilateral and substantial alteration of a fundamental term or condition of their employment.

Determining if constructive dismissal has occurred is based on an objective view of the employer’s conduct, rather than the employee’s perception of the situation. The employer’s failure to meet their contractual obligations distinguishes a constructive dismissal from a standard resignation. The seriousness and amount of apparent deliberation in this failure also factor into this determination. If a case for constructive dismissal is proven, the employee may be eligible for severance pay even though they resigned from their position.

Examples of Constructive Dismissal

When discussing examples of constructive dismissal, it is important to note that the employer’s actions or changes to the role must be unilateral. This means that it must have been performed without the consent of the employee. Furthermore, the employee must clearly indicate that they do not accept these changes and resign from their job in a short period of time following them. By failing to resign, the employee is indicating their acceptance of the new conditions of employment. Examples of constructive dismissal include:

Significant Changes in Powers or Duties

This is the most common example of constructive dismissal situations. In these situations, employees are faced with a sudden change in responsibilities or authority. For example, a yard foreman may have their responsibilities increased to those of a plant superintendent with no notice, change in title, or increase in salary.

Threats to Employment

Quitting in response to threats of dismissal or a demotion can be considered as grounds for constructive dismissal; however, merely encouraging an employee to quit may not be completely sufficient.

Reduction in Salary, Status, or Benefits

If an employee resigns due to a major reduction of salary, or a change in authority, benefits, or the location of employment, this may be grounds for constructive dismissal.

To learn more about constructive dismissal and other areas of employment law, contact the lawyers at Linley Welwood. We can be reached through our online contact form and are ready to assist you.


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