Should You Keep Working If You Think You Have Been Constructively Dismissed in Ontario?
A serious workplace change can force an employee into a difficult legal position.
Resigning immediately may allow the employer to characterize the departure as voluntary. Continuing to work without objection may support an argument that the employee accepted the new terms.
The correct response depends on the employment contract, the seriousness of the change, the employer’s conduct and the employee’s response. Employees should assess those issues before resigning or agreeing to revised terms.
This article addresses non-unionized employees in provincially regulated Ontario workplaces.
What Is Constructive Dismissal in Ontario?
Constructive dismissal occurs when an employer effectively ends the employment relationship without issuing a formal termination.
It can arise in two ways.
First, an employer may unilaterally breach the employment contract by substantially changing an essential employment term. The court considers whether a reasonable person in the employee’s circumstances would view the change as a substantial alteration of the employment agreement.
Second, constructive dismissal may arise from a course of conduct that, viewed cumulatively, demonstrates that the employer no longer intends to honour the employment contract.
Potential examples include:
- a material reduction in compensation;
- a demotion or substantial loss of status;
- a significant removal of duties or authority;
- a major change to hours, schedule or work location;
- an unjustified suspension;
- an unauthorized temporary layoff; or
- serious and sustained harassment, abuse or workplace mistreatment.
No individual change automatically establishes constructive dismissal. The employment contract, the magnitude of the change and the surrounding circumstances must be examined.
A temporary layoff requires particular care. The ESA may recognize a layoff as temporary for statutory purposes. That does not necessarily give the employer a contractual right to impose the layoff at common law.
Can You Continue Working Under Protest in Ontario?
An employee can sometimes continue working temporarily while clearly rejecting the change.
This approach may preserve income while the employee obtains legal advice and assesses the employer’s position. The written objection also provides evidence that the employee did not agree to the revised terms.
The objection should:
- identify the specific change;
- state that the employee does not consent;
- confirm that continued work is temporary and under objection;
- request restoration of the original terms; and
- reserve the employee’s legal position.
The wording must remain professional. An objection should document the dispute without making unsupported allegations or creating unnecessary conflict.
Working under protest does not preserve a claim indefinitely. There is no fixed deadline, but delay may become evidence of acceptance. The court will consider the employee’s words, conduct and the length of time they continued under the changed conditions.
When Should an Employee Resign in Ontario?
An employee may resign and treat the employer’s conduct as a termination where the legal threshold for constructive dismissal has been met.
That decision carries substantial risk. If the change was not sufficiently serious, or the employer was contractually entitled to make it, the departure may be treated as a voluntary resignation.
Any resignation should clearly connect the departure to the employer’s conduct. Unrelated explanations, inconsistent communications or documents describing the departure as voluntary may weaken the claim.
Employees should obtain legal advice before resigning wherever possible. They should also preserve the employment agreement, policies, pay records, schedules, job descriptions, emails, performance records and communications concerning the disputed change.
Does Remaining at Work Weaken the Claim?
Remaining at work does not automatically defeat a constructive-dismissal claim.
The central question is whether the employee clearly rejected the change and acted consistently with that position. A short period of continued work may be reasonable while the employee seeks advice or attempts to resolve the dispute.
A lengthy period of silence is more difficult. The employer may argue that the employee accepted the revised arrangement through continued performance.
The circumstances also matter. Remaining temporarily may be practical where the workplace remains professional and safe. It may be unrealistic where the employee has been humiliated, stripped of meaningful duties or subjected to serious mistreatment.
Constructive Dismissal and the Duty to Mitigate in Ontario
An employee who establishes constructive dismissal must still take reasonable steps to reduce their losses.
In some cases, that may include considering continued or renewed employment with the former employer. The employee is not required to remain in every workplace. The issue is whether doing so would be objectively reasonable.
Relevant considerations include whether the compensation and duties remain comparable and whether the working relationship has become hostile, humiliating or acrimonious.
An employee should therefore avoid assuming that remaining at work either preserves or defeats the claim. The strategic effect depends on the specific facts.
What Should You Do Before Deciding?
Document the change immediately. Record the former terms, the revised terms, when the change was communicated and who made the decision.
Review the employment contract and relevant workplace policies. The employer may rely on wording that permits particular operational changes, transfers or layoffs.
Object promptly and in writing if you do not accept the change. Avoid signing a revised agreement, acknowledgement, resignation letter or release before obtaining advice.
Most importantly, assess the legal position before resigning. Constructive dismissal is highly fact-specific. A disciplined initial response can materially affect the strength and value of the claim.
Lecker & Associates advises employees throughout Ontario concerning constructive dismissal, compensation reductions, demotions, temporary layoffs and material changes to working conditions. For advice concerning a workplace change, contact our Toronto employment lawyers at 416-223-5391 or intake@leckerslaw.com for a confidential consultation.
How Lecker & Associates Can Help
Lecker & Associates advises employees across Ontario on termination packages, wrongful dismissal claims, fixed-term contract disputes, and severance negotiations. If your fixed-term contract ended before the agreed end date, early legal review can help determine whether the employer had the right to end the contract, whether the termination clause is enforceable, and whether the offer reflects the full value of the remaining term. Our team of Toronto employment lawyers can be reached at 416-223-5391 or intake@leckerslaw.com for a confidential consultation.
FAQ: Should You Keep Working If You Think You Have Been Constructively Dismissed in Ontario?
A constructive-dismissal claim generally requires the employee to treat the employer’s breach as ending the employment relationship. However, an employee may take a reasonable period to object, obtain advice and assess the situation before deciding whether to resign.
There is no fixed deadline. The question is whether the employee responded within a reasonable period and acted consistently with rejecting the change. Prompt written objection is important, but it does not preserve the claim indefinitely.
A material reduction in compensation can constitute constructive dismissal. The analysis depends on the size and structure of the reduction, the employment contract and the surrounding circumstances.
A demotion may support a claim where it materially reduces the employee’s duties, authority, status or compensation. A change in title alone will not necessarily be sufficient.
Yes. A temporary layoff may constitute constructive dismissal where the employment contract does not expressly or implicitly permit it. The ESA temporary-layoff provisions do not necessarily create a common-law right to impose a layoff.
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