Employer liability for constructive dismissal when employee says nothing about the changes
Question: Does an employer have any liability for constructive dismissal if an employee says nothing about a significant change to their job duties and continues working?
Answer: Generally speaking, a constructive dismissal occurs when there is a unilateral and substantial change to a fundamental aspect of the employment relationship or contract. The Supreme Court of Canada in Potter v. New Brunswick (Legal Aid Services Commission) stated that constructive dismissal may arise where the conduct of the employer shows an intention to no longer be bound by the employment contract and the employee treats that conduct as a repudiation of the contract.
An employee can establish constructive dismissal in one of two ways:
- They may show unilateral breach by the employer, which substantially alters an essential term of the contract by establishing: i) on an objective basis, whether there has been a unilateral breach by the employer, and ii) if so, at the time of the breach, whether a reasonable person in the same circumstances as the employee would have felt that the essential terms of the employment contract had been substantially changed; or
- The employee may establish a course of conduct that, when viewed in the circumstances, would lead a reasonable person in the same situation as the employee to conclude that the employer no longer intended to be bound by the terms of the contract.
With respect to the conduct or change in question, it will not be a constructive dismissal if the employer had the right to impose it. A current example that is relevant during the COVID-19 pandemic is the issue of temporary layoffs. As the law currently exists, laying someone off temporarily would constitute a substantial change to the very basis of the agreement. However, it would not be a constructive dismissal if that agreement gives the employer the right to do so.
Some have argued that in the context of this pandemic, it would not be fair to apply a “pre-COVID-19 lens” to this unprecedented situation, and it is possible that a court will agree in the future. For the purpose of this discussion, the relevant point is that, to impose a substantial change, there must be an existing right.
However, it is also true that an employee who believes that they have been constructively dismissed must object to the change in a timely manner. Failure to do so will lead to a conclusion that they agreed or acquiesced. They do not have to do so immediately and are entitled to take a reasonable time to assess the situation and the changes, and then proceed. But if they wait for too long, they will have a difficult time pursuing a claim. Courts expect that an employer will be put on notice of the concern and given an opportunity to remedy the situation, which cannot occur if they are not made aware of it. So, the employee’s silence or failure to act can negate their potential claim.
Stuart Rudner is the founder of Rudner Law, an employment law firm in Markham, Ont. He can be reached at [email protected] or (416) 864-8500.