Constructive Dismissal

This article was last updated on April 16, 2022

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If you work in the province of Ontario and the company falls under its jurisdiction, you are covered under the Employment Standards Act, 2000. This Act sets minimum standards that an employer must comply with. If the employer fails to do so, you can file a claim with the Ministry of Labour against the company. The employee can file a claim on-line and it does not cost any money. If you are still working for the company, you can file a claim with a request that your name should not be disclosed to the employer. If you are not currently working for the company, it should not matter whether the employer knows your name. Some standards are so unique that they cannot be investigated without identifying you. The officer assigned to your file would advise you whether or not your complaint can be investigated without identifying you. The Act protects you if you are trying to exercise your rights and if the employer takes steps to penalise you because you have approached the Ministry, the officer assigned to your file is empowered to prevent the company from taking such an action and if the company is hell bent on penalising you, the officer can impose additional penalties on the company.
There are times when you may not agree with the officer’s decision, in that case, you have a right to appeal the officer’s decision to Ontario Labour Relations Board. It does not cost you money to request an appeal but you must do so within 30 days. Likewise, the employer too can file an appeal against the officer’s decision. However, it may be required to pay the Ministry any amount found to be owing to you by the company. This amount remains with the Ministry till the final decision of the Board. The Ministry then gives the money in accordance with the Board’s decision. There is no further appeal allowed. The Board’s decision is final and binding on both parties.
In the past, the Ministry defended the officer’s decision at the Board’s hearing; however, it is rarely done now in the name of cost cutting. The Ministry used to go to extra length to safeguard the interests of an employee even in some cases against its own officer. Such happenings are very rare. At the present time, under most situations, the Ministry takes no stand and lets the employer and the employee deal with the issues themselves before the Board. The consequences of Ministry’s non-involvement in such matters leave the employee in a very disadvantageous position. Unfortunately, the Ministry’s actions defeat the very purpose for which this Act was created. The employer has more resources than the employee and the Ministry’s intervention on behalf of the employee used to negate that advantage of the employer. It is up to the employee now to defend its interests.
The question arises, should the employee also engage the services of an expert in these matters? It is my view that in most cases it is not necessary at the initial investigation by the officer. However, if the issues are serious and complex, the employee may wish to engage such services at the appeal process.
When the employment relationship ends, it happens because the employee may decide to quit or is fired by the company. If the employee has been fired, he/she may be entitled to proper notice or pay in lieu of notice unless the exception to the entitlement applies. To understand these exceptions, the employee may wish to contact the Ministry for clarifications or the writer, who is a retired Employment Standards Officer with 15 years experience with these issues. One need not accept the explanation provided by the employer. If the employee resigns, he/she may resign because of better position somewhere else, in this case, the employee is not entitled to anything and is not required to give notice under most situations. However, the employee may also resign because his/her contract of employment has been changed by the employer without consent. If you find yourself in such a situation, you may agree to a change or you may decide to resign. If you agree to a change voluntarily, nothing happens. If you do not agree to changes, you may resign and if the changes made are significant, you may have been constructively dismissed. You would then be entitled to notice or pay in lieu of notice. If you are not sure if the changes made are significant, it is best to seek guidance from outside including the Ministry or the writer.
Under the Act, the employer can terminate the employment of an employee for any reason, what is required is that the employee must be given proper notice or pay in lieu of notice. There is no such thing as wrongful dismissal. The entitlements under any type of termination, that is, whether it is wrongful or constructive, is the same. The entitlement depends on the length of service. The maximum notice required is eight weeks if the period of employment is more than eight years. For the first three months of employment, your employment can be terminated without notice. If you happen to work for a company whose payroll is more than $2.5 million and you have worked for five or more years, you would also be entitled to severance pay in addition to notice or pay in lieu of notice. The severance pay is one week for each year of service, maximum of 26 weeks.
The employee must consider whether to pursue his/her claim through small claims court or through the Ministry of Labour. The complaint under the Act is free of cost to the employee while it would cost the employee money to go through small claims court. Another factor to consider is even if you win in small claims court, you still have to collect the judgement and some employers are not easy to collect from. On the other hand, the Ministry has the power to take additional steps against the employer if it does not comply with its decision.
To get a better picture of the situation regarding constructive dismissal, following case would help. These cases were referred to the Board for decision:
Huynh V. Garbo Group Inc. (16 December 2003) 0100-03-ES (Serena)
The claimant claimed that the employer gave her additional responsibilities and she was unable to cope with the workload. She claimed she was also suffering from arm and back pain and experiencing sleeping difficulties. As a result, she resigned and claimed constructive dismissal.
The investigating officer did not find her job responsibilities had changed significantly or that she was given excessive workload, her claim for constructive dismissal was rejected. The claimant appealed the officer’s decision to the Board, as was her right. 
The employee was hired in 1990 as a data entry clerk. During her employment, she was assigned various administrative responsibilities including data entry supervisor and traffic co-ordinator in purchasing and collections. In 2002, two workers were let go due to shortage of work and their duties of processing orders were assigned to her. In January 2003, another employee was let go from accounting department for shortage of work and her duties too were assigned to the claimant.
The claimant claimed that she advised the employer that she was overworked, suffering from arm and back pain and experiencing sleeping difficulties. She also advised the employer of her difficulties with the president who was easily upset, swore in her presence and had once accused her of not working fast enough. She resigned from her job on January 14, 2003 with two weeks notice and cited additional work without additional compensation and health concerns as the reasons for her resignation and claimed constructive dismissal.
The employer agreed that the employee’s duties were to change in January 2003 but denied there was an overall increase in her responsibilities. It was the employer’s position that changes made to the employee’s contract of employment did not constitute fundamental changes as she had performed these duties at one time or another during her period of employment and there was no change in pay or other conditions of employment. The changes made fell under her core responsibilities. It disputed her claim of constructive dismissal. 
As for the allegations against the president, the employer asserted there was little direct contact with the employee. The president did acknowledge one incident when he used the inappropriate language in front of the staff and admitted it may have occurred at other occasions but infrequently and never directed at the individual. Besides, the claimant received a pay increase after making a direct request to the president in 1998.
The Board made the decision that administrative duties are often changed in a small business in response to changing conditions. It also found that the claimant had performed these responsibilities during her tenure and the changes made in her contract of employment did not constitute demotion, nor did these changes were designed to make her quit. It found while some duties were added but they fell under her core duties and some duties were removed so that her workload would not have increased. In addition, it found she was not subject to hostile working environment.
The Board rejected claimant’s claim for constructive dismissal and concluded she resigned rather than forced to quit.
This case demonstrates how constructive dismissal is interpreted under the Act. It also shows that the appeal of the Ministry’s decision does not always results in employee’s favour.
The Board is an independent body and takes into consideration all the facts of the case. Its decision is final and binding on both parties.
This information is only provided to guide you about your entitlements under the Employment Standards Act, 2000 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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