Constructive Dismissal

“Constructive Dismissal” is term that describes a situation where an employer makes a substantial change to a fundamental term of employment without the employee’s consent and without providing proper notice of the change. Fundamental terms usually relate to an employee’s remuneration, reporting structure, job duties and hours of work. Proper notice depends upon the terms of any employment contract or, in the absence of a contract, requires a “reasonable period of notice”.

A Constructive Dismissal may also include situations where an employee has been harassed, discriminated against or bullied.

Although the application of “constructive dismissal” permits an employee to leave the employer and claim damages for wrongful dismissal as if their employment had actually been terminated, there may be an obligation on the employee to remain as part of any employee’s duty to mitigate (lessen) their damages.

It is essential that an employee make a decision whether or not to accept any change to the terms of their employment soon after the change or else run the risk that at law they have agreed to the change and lose the right to claim damages for constructive dismissal. For example, if the employer makes a significant reduction to an employee’s salary and the employee does not object within a reasonable time period the employee may be deemed to have accepted this change to their terms of employment.

It is therefore important to obtain legal advice promptly to determine whether you are in a constructive dismissal situation, and if so, what damages you are entitled to and what your best options are in this situation.