Can I Quit Because of a Toxic Workplace and Still Sue?

Written on behalf of Peter McSherry

Many employees in Ontario endure difficult, even hostile, workplace environments for fear that quitting will forfeit their right to legal remedies. But what if the workplace has become so toxic that staying is no longer a reasonable option? In Ontario, employees may have legal recourse through a constructive dismissal claim, even if they resign.

This blog explores how Ontario law treats toxic workplace situations, when quitting may give rise to a claim, and what employees should consider before walking away.

What Is Constructive Dismissal?

Constructive dismissal (sometimes called “forced quitting”) occurs when an employer makes a significant, unilateral change to a fundamental term of the employment relationship, or behaves in a way that shows it no longer intends to be bound by the employment contract. In these cases, the employee may treat the contract as terminated and sue for damages, just as if they had been formally dismissed.

The leading Supreme Court decision, Potter v. New Brunswick Legal Aid Services Commission, outlines two paths to proving constructive dismissal:

1. Substantial change to essential terms of employment (e.g., reduced pay, hours, or job responsibilities).
2. Course of conduct showing the employer no longer intends to be bound by the employment relationship.

Toxic or hostile work environments fall under the second branch. The court will consider whether a reasonable person in the employee’s position would have felt that continued employment was intolerable or impossible.

What Makes a Workplace “Toxic” in Legal Terms?

Not every unpleasant job or rude colleague qualifies as a toxic workplace in the eyes of the law. Courts have consistently held that employees must tolerate a certain degree of stress, personality conflict, and even managerial criticism.

However, a workplace may be deemed toxic or hostile in certain circumstances. Some examples include:

• There is repeated verbal abuse, harassment, or bullying;
• The employer fails to take appropriate action in response to complaints;
• The employee is subjected to unfair discipline or micromanagement as a form of retaliation;
• There is a pattern of exclusion, humiliation, or intimidation; or
• The workplace is marked by systemic discrimination or human rights violations (e.g., based on race, gender, disability, or other protected grounds).

Can You Quit and Still Sue for Constructive Dismissal?

Yes. However, quitting alone does not automatically entitle an employee to damages. The employee must prove that their resignation was not voluntary but a necessary response to the employer’s conduct. The resignation must be framed as a termination (wrongful dismissal) by the employer, legally speaking, due to intolerable conditions.

In other words, you must be able to show:

• The employer’s conduct breached a fundamental term of your employment contract or made it impossible to continue;
• A reasonable person would have felt compelled to resign in the same circumstances; and
• You resigned in a timely manner once the breach occurred or became intolerable.

Failing to act promptly may be interpreted as condoning the behaviour.

How to Strengthen Your Case Before Resigning

If you’re considering resigning due to a toxic work environment, taking the following steps can protect your legal rights and help support a constructive dismissal claim.

1. Document Everything

Keep a written record of incidents of harassment, bullying or abuse (including dates, times, and witnesses). Save emails or texts showing the employer’s behaviour or lack of action. Make sure to document any complaints you made and your employer’s response.

2. Follow the Employer’s Complaint Procedure

If your employer has a human resources policy or complaint process, use it. Courts expect employees to give the employer a chance to remedy the problem before concluding that the employment contract has been breached.

3. Consult a Lawyer Before Resigning

Speaking to an employment lawyer before you resign can help you assess whether your situation rises to the level of constructive dismissal and how best to proceed. The timing and framing of your resignation letter may be critical.

What Damages Can You Claim After Constructive Dismissal?

If you successfully prove constructive dismissal, you may be entitled to damages in lieu of reasonable notice, the same as if you were wrongfully dismissed. Courts assess damages based on the employee’s age, length of service, position and responsibilities, and availability of similar employment.

In addition, depending on your circumstances, you may be entitled to other forms of compensation, such as severance pay, unpaid wages or benefits, human rights damages (if the toxic workplace involved discrimination or harassment on protected grounds) or aggravated or punitive damages (in rare cases involving especially egregious conduct).

An experienced employment lawyer can assess your particular situation and determine what damages you may be entitled to.

Duty to Mitigate: What If You Find a New Job?

Even if you’ve been constructively dismissed, you are required to make reasonable efforts to find comparable new employment. If you do secure a new job during the notice period, your damages may be reduced.

However, in some cases, such as when the employee is suffering from emotional or psychological harm due to the workplace, mitigation efforts may not be immediately possible.

In Brake v. PJ-M2R Restaurant Inc., the Ontario Court of Appeal also clarified that income from a lower-paying or temporary job taken during the notice period may not always be deducted, especially if it was “supplementary” and not a full replacement for the lost income.

Common Myths About Quitting a Toxic Workplace

“If I resign, I give up all rights to severance.”

False. If your resignation was prompted by the employer’s breach, you may still be entitled to compensation.

“Unless I’m fired, I can’t sue.”

Also false. Constructive dismissal is a recognized legal form of dismissal, even though it begins with the employee’s resignation.

“Toxic workplaces are hard to prove.”

While challenging, these claims can succeed with careful documentation and legal advice. Courts will consider the overall context and whether a reasonable person would feel forced to leave.

When Is It Not Constructive Dismissal?

In some situations, quitting will not give rise to a constructive dismissal claim. Some examples include:

• If the issues are minor or short-lived;
• If the employer takes reasonable steps to address complaints;
• If the employee condones or tolerates the situation for too long without acting (condonation); or
• If the resignation is due to personal reasons unrelated to the employer’s conduct.

Because each case depends on its own facts, consulting an employment lawyer early is critical for preserving your rights.

Peter A. McSherry Employment Lawyer: Advocating for Employees in Guelph and the Surrounding Areas

Ontario employees are entitled to a safe, respectful, and fair work environment. Peter A. McSherry Employment Lawyer has dedicated his career to fighting for employees caught in toxic workplaces and protecting their rights under the common law and Ontario’s employment legislation. From our office in Guelph, our team proudly serves clients throughout the Greater Toronto Area and Kitchener-Waterloo. To book a confidential consultation with Peter A. McSherry, please contact us online or call 519-821-5465.