What Constitutes a Constructive Dismissal in British Columbia?

Wrongful dismissal claims can take many forms in British Columbia. They are not just about lack of reasonable notice or severance pay.

One poorly understood form of wrongful dismissal is constructive dismissal.

Ultimately, you can resign or quit your position and still hold your employer liable for wrongful dismissal if he or she took certain prohibited actions.

Here’s what you need to know about constructive dismissal in BC…

What is constructive dismissal?

Constructive dismissal is when an employer unilaterally changes a fundamental term of the employment contract, i.e., an important element is changed without consultation or mutual agreement with the employee.

A fundamental change to one aspect of the contract is considered a breach of the whole contract. The law in BC considers that the employer has then repudiated the contract.

To be clear, changing the time to start work from 9 am to 8 am would not generally be considered a “fundamental” change. However, demanding that you work at night could be considered unreasonable if you took the job on the understanding that you would work day shifts only.

If you were terminated for refusing to agree to the changes or resigned because you could no longer accept the work terms, you may be able to file a wrongful dismissal case for damages based on the constructive dismissal laws in BC.

Legally, any change not agreed by both parties may be unlawful in BC but it is almost unheard of for a change that is beneficial for an employee to lead to a legal dispute.

What are some typical examples of fundamental breaches?

You have already seen one example of a fundamental breach of contract (a major change of work hours).

Other typical examples include the following:

• A reduction in salary, commissions, bonuses, benefits, etc.
• A change of job title
• A change of work duties
• A toxic work environment that erodes trust in the employment relationship

Generally speaking, claimants in successful constructive dismissal cases in BC win damages that are similar in amounts to the reasonable notice periods set out in the common law unless there is a specific provision in an employment contract that has been breached.

Let’s take a look at three of the main reasons why employees file for constructive dismissal in BC…

Demotion or change in job responsibilities

Many cases of constructive dismissal in BC result from an employee being demoted to an inferior position or having their job responsibilities changed unilaterally by an employer – regardless of whether the salary is affected.

Most cases hinge upon the question of whether the reduction in responsibilities is enough to fundamentally alter the employment contract.

In some cases, it is obvious – especially if a senior person is demoted to a junior position and suffers humiliation as a result.

In other cases, the reduction in responsibilities is less obvious – for instance, if responsibilities are gradually reduced over time.

The “sideways” or “lateral” transfer of an employee to a different role within the same company can be difficult for an employee to accept, particularly if it results in inconvenience or slight removal of responsibilities – but it is rarely sufficient to warrant a constructive dismissal claim.

Reduction in salary or benefits

If an employee’s compensation is significantly reduced (generally 10 percent or more if the compensation in question is base salary), an employer may be guilty of constructive dismissal.

The outcome may also depend on whether the employee had been made aware that a reduction could occur during the period of employment.

These cases are not as clear as they may first appear, especially if they involve the reduction of bonuses, commissions, and other forms of compensation. Cases involving the reduction of a fixed wage or salary are generally easier to adjudicate.

Harassment in the workplace

Harassment or bullying in the workplace is another common theme of constructive dismissal lawsuits.

The courts in BC consider toxic workplaces to be unacceptable. An employer may shoulder some of the blame if an employee is forced out because of a failure to prevent such a situation from developing.

An employee who suffers humiliating, degrading or discriminatory treatment at the hands of a boss or coworkers – and ends up resigning because of it – may have a strong case for constructive dismissal.

The definition of “harassment” is often key in these cases. For instance, criticism or a disciplinary measure from a manager about an employee’s performance is not “harassment”.  It is generally seen as behaviour that is unwelcome or ought to be reasonably known as unwelcome – for instance, when it humiliates or degrades a person.

Everyday arguments do not create a “toxic” workplace. Serious wrongful behaviour must be demonstrated for a constructive dismissal claim to be successful. The plaintiff’s feelings or beliefs are insufficient. Evidence must be provided that any reasonable person would consider the workplace a “poisoned” environment.

If the harassment occurs due to age, race, religion or constitutes sexual harassment, the employer may face punitive damages under the province’s Human Rights Code in addition to damages for wrongful dismissal under the employment laws.

Some claims that involve violence or the threat of violence against an employee may also breach the federal Occupational Health and Safety Act.

You must act quickly in constructive dismissal cases

With constructive dismissal cases, time is important and you must not wait too long before taking steps to flag your issues or it may damage your case.

If the terms of your employment contract were changed and you continue to work under these new terms, you may be considered to have “condoned” or agreed implicitly to the changes made by your employer.

The law may then prohibit you from making a constructive dismissal claim because your actions suggested condonation of the changes.

Try to minimize your loss

Another important step to take if you feel you are being constructively dismissed is mitigation: that is, taking reasonable steps to limit your financial losses from the harm caused by the actions of your employer.

For instance, you should try to seek a new position if you leave your job claiming constructive dismissal so that you are not left without income for any more time than necessary.

Your employer may offer you an alternative position or invite you to remain in your role until you find a new job. In these instances, it may be best to speak to one of our employment lawyers for advice on your legal options.

Do you have a constructive dismissal case in BC?

If you think that you may have a constructive dismissal case, contact a Taylor Janis employment lawyer as soon as possible.

We can advise you of your options during a confidential telephone or video consultation.

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