My Employer is Making Changes to My Job – Have I Been Constructively Dismissed?

What is a Constructive Dismissal?

Constructive dismissal is a concept in employment law that arises when an employer makes a fundamental change to an employee’s job without the employee’s consent. If it occurs, even though the employee technically resigns, the law may treat the situation as if the employer terminated the employee. This means the employee may be entitled to notice of termination or what is colloquially referred to as a “severance package.”

A constructive dismissal occurs when the employer unilaterally changes the terms of the employee’s employment in a sufficiently drastic way that a reasonable person in the same situation would consider the contract to have been breached, and that a reasonable person would conclude that the employer no longer intends to be bound by the contract. Importantly, the employee must also not agree to, or acquiesce to, the change. Agreement may be implied if the employee works under the new conditions, without objection, for an extended period of time.

Examples of Changes Which May Constitute Constructive Dismissal

Classic examples of constructive dismissals include lowering an employee’s pay or changing the pay structure, for example, changing compensation from a set salary to straight commissions, demotion, removing core aspects of the employee’s job, requiring an employee to relocate to another city, or creating or allowing a toxic work environment.

Constructive dismissal can arise due to one major change, like a 20% pay reduction, or it can arise due to a culmination of small actions by the employer, like gradually removing responsibilities over time. Whatever the employer’s actions, a court must determine whether the changes were drastic enough to conclude that they demonstrate an intention by the employer to no longer be bound by the employment contract.

If You Think You’ve Been Constructively Dismissed, What Should You Do?

Employees who believe they have been constructively dismissed should proceed carefully. Continuing to work for too long after the change may be interpreted as accepting the new terms. This is called acquiescence.

Generally, an employee needs to object to the changes, assert a constructive dismissal, and resign from their employment.

This is a complex legal situation, and employees who are dealing with changes to their job should get legal advice.

If you are concerned that you may be experiencing a constructive dismissal, get in touch.