Constructive Dismissal Actions: Worth the Risk?

Written on behalf of Peter McSherry
Red dice, representing the gamble of leaving a paying job to bring an action for constructive dismissal
Background Shape/Fill/Blue Shaded

The Basic Rules

The common law doctrine of constructive dismissal allows an employee to assert that their employment has been terminated even though the employer has not directly delivered a notice of termination. The employee may generally make this assertion where the conduct of the employer is such that an objective bystander would reasonably determine that the employment relationship has been destroyed by the actions of the employer. This is also known as a “poisoned work environment”.

Clear cut examples of constructive dismissal are physically or sexually abusive conduct, an evident demotion in work responsibilities where the new job is demeaning, or a dramatic decrease in compensation.

Affirmative Action Required

The employee must be careful not to accept the circumstances via their conduct or through active consent. Instead, they must clearly assert that they do not accept the conduct in question. Usually, this will mean leaving the employment relationship and then making a claim for wrongful dismissal damages.

Weighing the Pros and Cons

Before embarking on an action based on constructive dismissal, an employee must measure the benefits of such a proceeding. This will often mean leaving a paycheque behind in exchange for the risks of a lawsuit. Before making any rash decisions, an employee should meet with a skilled employment lawyer to assess the likelihood of success, and the expected amount of recovery. If the employment history is modest, any damages awarded likely will be as well. This may not be worth the risk. One alternative in this context is to remain employed, seek employment elsewhere and leave when the time is right.

If, however, the employment history reflects a long period of time, a successful wrongful dismissal claim may see damages equal to as much as 24 months notice, which could make a lawsuit more appealing.

The employee, however, must always consider the consequences of losing. This not only will mean surrendering a paying position of employment for an uncertain future, but also the potential liability for their employer’s legal costs, never mind the costs of their own legal counsel and the added stress of litigation itself.

An Example of a Costly Gamble

The Ontario Court of Appeal considered such a claim recently. The plaintiff had been employed as a teacher. She had asserted that the school had intervened in her relationships with her students, parents and the grades she had assigned her students. The principal had re-assessed her grades on two occasions by increasing the grade she had initially given. Also, due to a disagreement with a parent, one examination marked by her was given to another teacher to re-mark, apparently as a neutral reviewer.

The teacher took this conduct to be grounds for constructive termination. The school was successful in its first attempt to have the case dismissed. The appeal then followed.

The Court of Appeal agreed with the lower court’s decision. It stated that a “dispassionate” reasonable person would not have found this conduct to be poisonous to the working relationship.

This was, of course, a tragic outcome for the plaintiff employee. She now faced at least two sets of legal costs for the first hearing and the appeal, after walking away from a productive position. It may also have had an impact on her ability to secure a quality reference from her past employer.

This case is a good example of the need for a hands-on and honest assessment of the merits of the case prior to taking any long-lasting action.

Employees’ Take Away

Constructive dismissal cases are indeed a high wire balancing act. Proving a termination in law is difficult and the consequences of failure can be significant. The employee needs to proceed cautiously and be sure to obtain experienced legal advice from the start.

Let Legal Advice Guide Your Actions

If you are facing circumstances of workplace abuse or other factors that have made work untenable, get advice before you act. Contact the offices of Guelph employment lawyer Peter McSherry. We can guide you through the issues and defend your position. Contact us online or by phone at 519-821-5465 to schedule a consultation.