Courts can interpret even a minor shift in job duties as constructive dismissal
In a prior column, I explained that if an employer changes the fundamental term of the employment contract without the consent of the employee, the employee may have grounds for claiming constructive dismissal. In this column I’d like to look a little more closely at some of the finer points involved.
How much or how little a change is required in order to conclude that there has been an event that constitutes a constructive dismissal? And how does an employee decide whether a constructive dismissal event should be pursued or left alone?
Each case is decided on its own facts and within the context of the overall employment relationship, and for each case, an employee needs legal advice before deciding whether he or she has been constructively dismissed, and whether the claim should be pursued.
However, the magnitude of change required for a constructive dismissal can be surprisingly small. For instance, constructive dismissals have been found by Canadian courts to exist in the circumstances described below.
In one case, shifting the employee from day shift to night shift was grounds for constructive dismissal. In this case, there was an explicit term of the employment contract that stipulated for day shift.
In another case, the employer unilaterally shifted the employee from work inside the main building to work as an outside gate person. His pay remained the same. His title and position remained the same and his duties were similar. However, the Ontario Court of Appeal specifically found that, while title, position and salary are important factors in analyzing a constructive dismissal, “another important factor is conditions of employment.”
The employee had worked inside for his entire tenure with the employer, some four years, until he was switched to an outside “yard shack.” The Court of Appeal found that marginalizing the employee in this way was a clear indication that the employer no longer valued the employee’s services, and hoped he would quit. As well, by necessary implication, the Court of Appeal must have reasoned that inside work had become, by the pattern of conduct, an implied, and in fact fundamental, term of the employment contract.
In another case, the employer required the employee to attend and pay for a Dale Carnegie course. The court found that the cost of the course constituted three per cent of the total salary of the employee, and that to require the employee to pay it constituted a “serious breach” of his employment contract. The court concluded that, as a result, the employee had been constructively dismissed.
Grounds for constructive dismissal can be as seemingly minor as changing the method of salary payment from cheque to automatic electronic deposit. In one case, the court found that payment by cheque was a term to be implied by conduct; because both parties had been abiding by that payment system for 13 years, that conduct amended the contract of employment and become a fundamental term to it. As a fundamental term, it could not be unilaterally altered by the employer.
In another case, the court found that reducing the hours of the employee from 37.5 hours per week to 30 per week constituted a constructive dismissal.
These are actual cases decided by Canadian courts, and show how apparently minor a change made unilaterally by the employer to the terms of the employment contract can constitute a constructive dismissal.
Obviously, then, changes imposed by the employer of greater magnitude to fundamental terms, such as significant pay cuts, bonus or commission changes, title and duty reductions, geographic transfers, loss of authority or inclusion, and other such changes or combinations of such changes that seem like obvious reductions, can amount to constructive dismissals.
When a constructive dismissal arises, the employee is given a choice: Keep working under the new terms, or accept the dismissal for what it is, bring the employment to its end and pursue damages. The damages claim for a constructive dismissal can be extensive.