Constructive Dismissal is a legal term used to describe a situation where an employer does not say “you are fired” but makes unwanted changes to your employment which are so substantial that a Court will view the changes as “constructively” terminating your employment.
Because the employment relationship is often a fluid relationship, changing over time, you generally can’t require your employer to keep your job exactly the same. Typically, over time, there will be changes such as increased pay, increased responsibility, minor changes to working hours, etc. In circumstances where an employer attempts to force a substantial change on an employee, the employee can refuse to continue to work in the changed circumstances and claim for damages based on what the employer should have done which was to provide reasonable notice of termination of employment.
The terms the Courts frequently use to describe the type of changes that would result in a finding of constructive dismissal are “fundamental” changes and changes “going to the root of the employment relationship.” Generally, constructive dismissal situations involve reduction in remuneration, position and/or status. Other less common changes (like being asked to relocate) can result in a constructive dismissal too, however, and the above list is not exhaustive.
The magnitude and type of change that will allow a person to walk off the job is very difficult to generalize. Typically, if you believe that your employer is asking you to do something you never agreed to do or to perform the same services for less than you are prepared to accept for your services, you should talk to an experienced employment lawyer. You may not have been fired, but the result may be the same. Constructive dismissal cases are difficult because the risks are quite high. If you allege constructive dismissal and the Court does not agree that the changes were sufficient to qualify as a constructive dismissal, you will have lost your job and lost your case and be liable for some of your employer’s legal costs.