Constructive dismissal risky for employees


John Devellis Headshot

Employees who believe they have been constructively dismissed take a risk when they walk away from their job, says Toronto labour and employment lawyer John De Vellis.

In a recent Nova Scotia case, the province’s appeal court ruled against a newspaper account executive who quit his new position, claiming the revised compensation model would cut his income. The decision overturned an award of more than $100,000 made to the man by a trial judge who found he had been constructively dismissed.

“Constructive dismissal is a very difficult and unclear area of the law, and I always tell people that they’ve got to tread very carefully,” says De Vellis, a partner with Shibley Righton LLP. “Unless the circumstances are extremely clear, you’re taking a big risk as an employee by walking away because you could end up with nothing if the court finds you weren’t constructively dismissed.”

He tells that plaintiffs bear the responsibility of proving they were constructively dismissed, which is the technical term when an employee unilaterally alters a fundamental aspect of the conditions of employment or makes continued employment intolerable. That can occur either as a result of the unilateral actions of the employer, or through the combination of a series of smaller issues in the workplace.

If an employee contacts him before quitting, De Vellis says he typically advises them to hold out and keep their legal options open.

“If you’re being sexually harassed, or the workplace has become completely poisoned or dangerous, then you’re under no obligation to stay,” he says. “But if you are able to, it’s probably less risky to stay and try working something out with the employer.”

Instead of departing, De Vellis says employees can register their disapproval with new terms of employment and sue their employer for damages if necessary.

In the Nova Scotia case, the plaintiff employee — a long-serving account executive — ultimately paid for his decision to quit after initially accepting a new position as a business development specialist. After studying sales forecasts, he believed he was being set up for a reduced income, and left the job, claiming he had been constructively dismissed.

While a trial judge accepted his position and awarded the man damages for a 16-month notice period, the appeal court reversed that judgment.

“Rather than wait and see or stay under protest in order to mitigate his losses, [the employee] quit and sued for wrongful dismissal,” the appeal court ruling reads.

“The duty to mitigate your damages applies whether you are terminated or constructively dismissed,” De Vellis says.


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