EMPLOYMENT LAW
Wrongful Dismissal & Constructive Dismissal
A wrongful dismissal occurs when an employee is dismissed by his or her employer without reasonable notice or without adequate pay in lieu of reasonable notice. A wrongful dismissal can be an express termination of employment, but can also occur as a result of the actions or omissions of the employer. This latter situation is commonly referred to as constructive dismissal. The Supreme Court of Canada in Farber v. Royal Trust Co. [1997] 1 S.C.R. 846 says:
"Where an employer decides unilaterally to make substantial changes to the essential terms of an employee's contract of employment and the employee does not agree to the changes and leaves his or her job, the employee has not resigned, but has been dismissed. Since the employer has not formally dismissed the employee, this is referred to as "constructive dismissal". By unilaterally seeking to make substantial changes to the essential terms of the employment contract, the employer is ceasing to meet its obligations and is therefore terminating the contract. The employee can then treat the contract as resiliated for breach and can leave. In such circumstances, the employee is entitled to compensation in lieu of notice and, where appropriate, damages."
A dismissal is wrongful if the employer fails to provide an employee with the notice and severance set out in the appropriate employment standards legislation and as provided for by common law (Court decisions).
Notice may be provided as working notice, however, employers most often provide a dismissed employee with pay in lieu of notice or, salary continuance. A dismissal is wrongful even when the employer provides notice or severance in accordance with the prescribed minimums set out in employment standards legislation if the amount of notice is less than what is reasonable by common law.