What is a constructive dismissal?
The definition of constructive dismissal is when an employee resigns following a breach of the employment contract or a substantial change to the employment relationship’s terms by the employer (e.g. salary, work location, hours of work). These changes can be sudden or made over a reasonable time, but ultimately makes the employee’s position untenable to work in. The employee would have the choice to accept the substantial change or risk being fired.
Constructive dismissal can also be defined as being forced to resign due to the employer creating an intolerable work environment. Since the employee is being forced into resigning, it is seen as a termination by the employer and the employee may be entitled to a severance package.
How do you prove constructive dismissal in Alberta? An employee looking to make a constructive dismissal claim must be able to clearly prove a substantial change in the employment relationship. The Court in Alberta would apply the following considerations in determining if an employee has been constructively dismissed:
- Did the employer make a unilateral change that breaches one of the terms of the employment contract?
- Did that change substantially alter an essential term of the contract?
If an employee can prove that the above points have taken place, they likely have a legitimate claim for constructive dismissal and the employer would be required to pay a severance package to the employee.
How do employers prevent constructive dismissal claims in the workplace?
Constructive dismissals are an undesirable outcome for both employers and employees. Not only can employees file lawsuits against their employer, but the situation can result in quality workers leaving a company.
To prevent constructive dismissals in the workplace, employers must be proactive when looking to implement fundamental changes to an employee’s work situation. We recommend that employers get the employee’s consent for any proposed changes to their terms of employment and provide them ample notice. Clear communication between the employer and employees when implementing major changes in the workplace is key to preventing potential legal claims.
Still have questions on constructive dismissals?
If you have questions about avoiding constructive dismissals in your business, our expert HR advisors are equipped with the knowledge to help you update employment contracts and establish best practices. For answers to your HR or health and safety questions, give us a call: 1 (833) 247-3652.