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When Can a Change to Someone’s Employment Contract be Viewed as a Dismissal?

DBM Law Blog

You’ve just been demoted, been advised that your pay is going to be significantly reduced, or another change to your job description has been implemented that completely alters your day-to-day tasks as an employee – what are your rights and what do you need to know in order to protect yourself?

When an employer unilaterally alters an employee’s job description, terms and/or conditions, this conduct can be construed as constructive dismissal of the employment relationship.  The changes must be to a significant part of the employment contract. Some examples include a:

*significant reduction in pay;

*relocating the employee’s workplace;

*demoting the employee; and,

*change to or reduction of working hours.

In addition to a single material change as set out above, constructive dismissal can also result from a combination of factors that result in an overarching material change to the employees job or working environment.

To successfully make a claim for constructive dismissal, within a reasonable time of the unilateral change, the employee is expected to quit his or her job and make a claim for having been constructively dismissed. If the employee does not object to the changes and continues to work after the changes have been implemented, then he or she may be found to have explicitly or implicitly accepted the new terms of employment. If this occurs, the employee will be barred from bringing a wrongful dismissal claim.

If the employee quits within a reasonable time alleging constructive dismissal, then he or she can make a claim against the employer for wrongful dismissal without notice or pay in lieu of notice and claim damages.  

It is important to note that a material change will only constitute a constructive dismissal if the changes were not pre-emptively contemplated in the employment contract. If the employer is afforded the right to make changes to aspects of the employment contract, then the employee does not have a right to rely on these changes as being construed as dismissal.  

For employees:

Make sure that you object when there is a material change to your job description. If you do not wish to accept the change, you should immediately consult an employment lawyer to discuss your options. If you wait too long, you may be barred from bringing the claim.

For employers:

Be careful. A reduction in pay is not the only material change that can be construed as constructive dismissal. If you demote an employee but keep their pay the same, this too can be found to be a constructive dismissal and can expose you to a wrongful dismissal lawsuit. It is always beneficial to seek guidance from an employment lawyer before making the decision to change the job description of your current employee.



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