The Risk an Employee Assumes When Claiming Constructive Dismissal

An employee who resigns from his or her employment claiming constructively dismissal is taking on a great risk in employment law.  The courts recognize the risk assumed by the employee and, therefore, provide the employee with a reasonable amount of time to decide if he or she will accept the change or whether the will take the position that he or she has been constructively dismissed.  This fact was noted by the Ontario Court of Appeal in Belton v Liberty Insurance Co. Of Canada1 where, at paragraphs 25 and 26, the Court wrote:

it is not unusual for an employer and employees to disagree over whether the employer’s unilateral changes to the terms and conditions of the employment constitute constructive dismissal. The employees’ predicament in such a situation is unenviable. If they leave their employment claiming constructive dismissal, they will face the immediate loss of job and income. They will not know when, or even if, they will find replacement employment. They will have to finance an action in an expensive legal system. Should the matter proceed to trial, they will bear the burden of proving they have been constructively dismissed. Years may pass before the dispute reaches trial, and when it does, the court may not agree with the position they have taken. From the beginning they face the prospect of paying the employer’s legal costs. On the other hand, if the employees acknowledge an employer’s changes and continue to work, they will be taken to have condoned the changes and will no longer be able to claim constructive dismissal if they are dissatisfied with the new terms and conditions of employment.

The vulnerability of employees who believe they may have been constructively dismissed and the difficulty of making the life-altering decisions they face must be recognized. In this context, it is understandable that such employees may wish to try to adjust to the new terms and conditions without affirming the employer’s right to make these changes and before taking the radical step of advancing a constructive dismissal claim. Allowing employees reasonable time to assess the new terms before they are forced to take an irrevocable legal position not only addresses their vulnerability, but also promotes stability and harmonious relations in the workplace.

Given then significant financial risks that an employee assumes when he or she claims a constructive dismissal, any employee who believes that he or she has been constructively dismissed is strongly advised to consult with a labour and employment lawyer prior to quitting his or her employment.  Often the employment lawyer, after reviewing the facts, will not only be able to provide an opinion of whether or not the employee has been constructively dismissed but will also be able to provide the employee with other, less risky, options as to how the employee may respond to the employer’s unilateral change.


  1. Belton v Liberty Insurance Co. Of Canada (2004), 34 C.C.E.L. 3(d) 203 (ONCA);