Constructive Dismissal Case Study -1

What is the Employment Standards Act?

The Employment Standards Act is the law that contains basic rules about employing people and working. Both employees and employers have rights and
responsibilities under the Act.
Does the Act cover all employees in Ontario?

Most employees are covered by the provincial legislation. However, employees working in industries that fall under Federal jurisdiction, such as, Post office, Banks, Railways, Radio stations, Airlines, Television stations etc. are not covered. 
If you are member of the trade union and your contract of employment is governed by the collective agreement, you may not be covered by the Act.
If you are currently employed with the company, you may be able to file a claim with a request that your name not be disclosed. The Act protects you when you are exercising your rights under it.
Constructive dismissal is not defined in the Act per se; however, employee quit is accepted in the constructive dismissal. Its concept is relevant when determining employee’s entitlement for:
.           notice of termination or pay in lieu of notice and
.           severance pay entitlements 
For the employee to be entitled to termination and severance pay in constructive dismissal, the “quit” must be due to unilateral change in a fundamental term of employment by the employer. The change must be very much to the employee’s disadvantage.
The Act provides minimum standards of protection. Except in certain cases- such as pregnancy leave, reprisal etc., the Act, does not give job security protection. Otherwise, the only thing an employee is entitled to is notice of termination and/or severance pay.
The Act does not require the employer to provide cause or reason for the change in the contract of employment as long as the proper notice is given for dismissal or change. Sometime the notice for change can serve as a notice of termination.
Constructive dismissal can occur in the following situations:
.           Ultimatum to resign or else be dismissed.
.           Harassment to the degree that further employment becomes intolerable or        
.           Breach or repudiation of fundamental contract by employer.
.           Anticipatory breach of fundamental term by employer.
.           Unilateral and significant changes to the employment contract.


An employer gives three months written notice, individually addressed and served on each employee. The notice states that changes to the employment contract will be made and are to be effective upon the expiration of the notice. The notice also states that each person is: “welcome to stay and work with us under the new conditions but if you do not accept these conditions thereby indicate unwillingness to continue your employment, consider this as your notice of termination.”
In this situation, the employer has complied with the requirement of notice under the Act. In fact the employer has provided greater period of notice than required. The maximum notice required is eight-week. Thus the employee who does not accept new conditions of employment is not entitled to termination pay. However, it does not affect the employee’s entitlement to severance pay which he or she may be entitled to.
In other words, the amount of severance pay is not affected but the termination pay may be reduced by the amount of notice given. 

If you or the employer disagrees with the investigating officer’s decision, both parties have a right to appeal to Ontario Labour Relations Board within 30 days of the officer’s decision. The Board appoints a referee to hear the appeal. It does not cost the employee to request an appeal but the employer may be required to deposit monies in trust with the Ministry of Labour if it is found to be owing. The referee decision is final and binding on both parties.    
In the past, the Ministry was very aggressive in defending the rights of an employee and would send a legal counsel to represent the employee at the Board’s hearing to deal with the matter. It rarely does so now. Obviously, the employer has advantage over the employee in these circumstances.
The question arises, should the employee also engage the services of a professional? It is my view, employee’s may not engage such services at the officer’s level hearing but may do so at the referee level hearing, particularly, if the issues are complex.
It is important that if a hearing has been scheduled, the employee must attend such a hearing to present evidence to support its position or to contest the employer’s evidence, otherwise, the officer or the referee may rely on the evidence of the employer to render a decision.
This information is provided for guidance only and should not be considered as a legal advice.

This article is provided by Rajinder K. Batra, who is a retired Employment Standards Officer with the Ministry of Labour with 15 years experience in these matters.

If you have any questions regarding your employment, please contact the writer by e-mail at

If you don’t have access to e-mail; you can fax your question at (905) 331-1805

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