Constructive dismissal occurs when an employer’s actions substantially breach the essential terms of the employment contract.

Tread carefully and quickly when facing such a situation, as constructive dismissals are complicated. You may have only 10 days to object. Otherwise, you may lose your right to a better termination payout if you do not act fast enough, or you may find yourself losing your job without a termination package if your claim does not meet the requirements for constructive dismissal.

What is Constructive Dismissal?

Constructive dismissal occurs when your employer’s acts and conduct repudiate the contract. This can, for example, include unilateral changes to salary, position, or duties, or creating a work environment that is intolerable due to harassment or unsafe conditions.

As explained by the Supreme Court in Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10, there are generally two scenarios of constructive dismissal: (i) your employer substantially breached an essential term of the employment contract, and (ii) if your employer’s conduct shows that it intended not to be bound by the contract.

Why You Should Act Fast When You’ve Been Constructively Dismissed

If you suspect you are being constructively dismissed, act immediately.

Delaying your response can lead to legal complications, including the assumption that you have agreed to any changes in your role or employment.

In Kosteckyj v Paramount Resources Ltd, 2022 ABCA 230, Paramount unilaterally announced across-the-board salary and benefit reductions as part of its corporate cost-cutting measures. Ms. Kosteckyj neither expressly rejected nor accepted the salary reduction. Without saying a word, she continued to work for three weeks following the pay reduction. The company then downsized to cut costs further, and she was fired. The Alberta Court of Appeal found that the fact she continued to work for three weeks after the reduction in pay was “indisputable evidence” that she had accepted the new terms of employment. The court ruled that an employee has 10 days to reject the proposed changes, otherwise it was implied that the changes were accepted. As a result, the termination pay she received from being fired was calculated based on her newly reduced salary. At the end of the day, her failure to signal her rejection of the lower salary meant that her termination package was $10,000 less than it would have been if she had expressed disagreement with the pay changes.  A simple failure to act cost her significantly.

First Steps When You’ve Been Constructively Dismissed

There are two key actions you need to take right away:

1. Express your disagreement: You must let your employer know (preferably in writing) that you do not accept the changes. If you do not make your disagreement clear, the court could interpret your continued employment as consent to the new terms, potentially destroying your case.
2. Consult a lawyer: Constructive dismissal cases are complicated and require expert legal advice to navigate. From understanding the allegations of harassment to determining whether changes to your job are substantial enough to constitute a breach, a lawyer will guide you through the process.

Here are two key things you should avoid.

1. Don’t accept new terms: Never agree (in writing or verbally) to the new terms your employer offers if you feel they amount to constructive dismissal. Accepting the new terms, may undermine your claim.
2. Don’t resign hastily: If you resign without understanding your legal rights, you risk losing severance and even unemployment benefits.

Why You Should Act Cautiously

Constructive dismissal claims are often complex and fraught with pitfalls. Below are some key considerations to be cautious of before making a claim.

Constructive Dismissal Is Not Easy to Establish

Not every change to your employment terms will qualify as constructive dismissal. The court will also try to understand the changes in a broader context.

For example, in Boyer v. Callidus, 2024 ONSC 20, (upheld by the Court of Appeal in Boyer v. Callidus Capital Corporation, 2025 ONCA 79, the employee did not appeal), the employee, Mr. Boyer, sued the employer, Callidus, for constructive dismissal, in the face of his planned retirement, due to the reduction of his responsibilities and the company’s toxic work environment. The court found that Mr. Boyer was not constructively dismissed; instead, he had voluntarily resigned.

The court found that, although Callidus transferred Mr. Boyer’s responsibilities before his retirement date, it was understandable, as the transition should have been done before he retired, so it was not constructive dismissal.

Mr. Boyer also alleged that he was constructively dismissed due to conduct by Callidus, including unjustified criticism and vague, unfounded allegations against him, as well as Callidus creating a hostile and embarrassing work environment.

However, the court found that although Mr. Glassman’s criticisms of Mr. Boyer may have been unjustified, and his language was harsh, it did not amount to constructive dismissal. The physical attack incident was not directed at Mr. Boyer, so this unfortunate incident that Mr. Boyer witnessed did not render his continued employment at Callidus intolerable, thereby amounting to constructive dismissal.

As a result, the motion judge found Mr. Boyer was not constructively dismissed, but had resigned, thereby rejecting his claim for pay in lieu of common law reasonable notice.

For constructive dismissal to be valid due to a toxic environment, the employer must have behaved in a manner that renders continued employment intolerable, a high standard.

 

The Termination Clause in Your Contract May Still Apply

Even if you are constructively dismissed, a termination clause in your contract may still limit your entitlement.

In Moore v. Apollo Health & Beauty Care, 2017 ONCA 383, the Court of Appeal upheld the trial judge’s part of the decision that the termination clause was still enforceable despite a finding of constructive dismissal.  The trial judge found that Apollo constructively dismissed Ms. Moore by changing her responsibility from that of a non-supervisory line technician to a line supervisor. However, the following termination clause was still enforceable:

If Apollo terminates your employment, you shall be entitled to receive only such notice of termination, termination pay, benefit continuation and/or severance pay, if any, as are required by the [Employment Standards Act, 2000] in the circumstances of the termination. This paragraph defines and limits your full entitlement to notice of termination, pay in lieu of notice, benefit continuation and severance pay upon termination of employment, and shall apply regardless of any changes to the terms and conditions of your employment (including changes in position, duties and responsibilities, reporting relationships, and compensation). Please read it carefully.

[emphasis added]

The Court of Appeal found that the terms of the above clause specifically address the calculation of notice upon constructive dismissal. As such, the termination clause was enforceable. As a result, the employee was not entitled to common law notice or pay in lieu of such notice.

Why does it matter? It matters because the termination clause may significantly reduce your termination entitlement, potentially rendering the constructive claim unworthy of pursuit under certain circumstances, compared to continuing to work. For example, a non-managerial employee who has worked for 3 years may be entitled to about 3 months’ reasonable notice or pay in lieu of notice. However, if the termination clause is enforceable, they may receive only 3 weeks’ notice or pay in lieu of such notice, significantly reducing the amount they may receive due to constructive dismissal.

You Have a Duty to Mitigate Your Loss

Employees claiming constructive dismissal must actively attempt to mitigate their losses by seeking new employment. This means that if it is reasonable for the employee to continue working to reduce their income loss due to constructive dismissal, they should do so, especially when constructive dismissal is due to business needs. As explained by the Supreme Court in Evans v. Teamsters Local Union No. 31, 2008 SCC 20.

Therefore, even if an employee successfully establishes constructive dismissal, but fails to mitigate their loss by continuing with the new position with the same employer (if that’s reasonable to do), they may not be awarded damages in the end.

Final Considerations if You Have Been Constructively Dismissed

Constructive dismissal claims can be complex, and the outcome often depends on specific facts and nuances. To protect your rights:

• Act quickly: Express your disagreement to avoid being deemed to have acquiesced.
• Consult a lawyer: Legal guidance is essential to navigate the complicated details.
• Avoid rash decisions: Don’t accept new terms or resign without fully understanding your legal position.

Legal professionals are crucial to help you assess whether you have a valid claim and to avoid making mistakes that could harm your case.

By taking the right steps, you can protect your interests and pursue the best course of action if you’ve been constructively dismissed.

Losing your job can be a stressful and emotional experience. Whether you were terminated due to downsizing, performance issues, or other reasons, it is essential to understand your rights and options. If you have been let go, here are some key things you need to know before signing any documents and as you navigate this challenging situation. Most employers offer only the minimum, which is often about a quarter or even less of what you are owed. Why? Because employees sign without seeking legal advice.

Do I Have to Sign a Termination Letter Right Away?

When your employer informs you of your termination, they may ask you to sign a termination letter immediately or within seven days. You do not have to sign immediately or within any timeframe they provide. It is crucial to pause and get legal advice immediately.

Understanding Your Rights

Under Ontario’s Employment Standards Act, 2000 (“ESA”), you have certain rights, such as the minimum statutory notice of termination or pay in lieu of notice, severance pay, etc. However, absent an enforceable termination clause that limits your termination entitlement to the ESA minimum, you are entitled to common law reasonable notice, which is generally much more than the ESA minimum standards.

Consequences of Signing Severance Documents

Termination letters often include a “full and final release” to prevent terminated employees from pursuing further rights after they sign it. In addition to statutory or contractual entitlements, employers usually offer extra benefits in exchange for signing this full and final release, such as additional severance pay, extended benefits, outplacement services, or other forms of compensation.

By signing the release, you agree to receive the extra benefits and give up your right to sue for any additional claims related to your employment or termination. In Hall v. ESC Automation Inc., 2023 HRTO 1676, an employee’s application at the Human Rights Tribunal of Ontario (“HRTO”) was dismissed because the employee had already voluntarily signed a full and final release. Therefore, they lost the right to submit the human rights claim to pursue extra entitlements.

Your Right to Seek Legal Advice

Your employer cannot force you to sign any termination documents right away. You have the right to seek advice from an independent lawyer before signing. If you are pressured or rushed into signing a severance agreement or final release without enough time to seek legal advice, you could challenge the validity of these documents. In Rubin v. Home Depot Canada Inc., 2012 ONSC 3053, the Ontario Superior Court of Justice found the employer pressured the employee, suggesting that he would only receive termination package benefits if he signed the termination documents, making the employee believe he had no other option. As a result, the signed termination letter and release were unenforceable. The employee was awarded a 12-month reasonable notice period under common law, almost doubling the 28 weeks offered by the employer.

Understand Your Options

You are not obligated to sign any termination documents, especially when the termination package is less than what you are legally entitled to. By choosing not to sign the release, you can retain the right to pursue additional claims or entitlements under common law and start your negotiation for a more favourable package with your former employer.

If the severance package is far below your legal entitlement and the negotiation does not result in any improvements, you may have to resort to legal procedures. Under Ontario’s Limitations Act 2002, you must file a claim in court within a maximum of two years from the date of termination to avoid losing the right to sue. Further, if your termination is a result of discrimination under the Ontario Human Rights Code (“Code”), you can also consider filing a case with the HRTO within one year from the termination date.

Practical Steps

Here are some practical steps to take after being let go:

1. Engage Legal Counsel: Have a qualified lawyer review any severance documents. These are complex documents understood by lawyers. Even a few words misplaced can entitle you to payment four times the minimum ESA standards.
2. Document Everything: Keep records of conversations, emails, and any evidence of your termination. This documentation can be crucial if you decide to pursue legal proceedings.
3. Timelines Matter: Contacting a lawyer immediately is your best strategy to protect your rights. While you have two years to sue there are obligations to mitigate by finding a job. Ultimately remember the two-year limit under Ontario’s Limitations Act 2002, and the one-year limit under the Code. If you are considering a legal proceeding, do not miss the deadlines.

Being let go is never easy, but do not rush to sign anything, even if your employer asks you to sign the severance documents within a specific timeframe. Consult an employment lawyer to ensure you are treated fairly and receive the compensation you deserve. Signing a release usually forfeits your right to seek additional compensation or take legal proceedings against your former employer. Ensure you fully understand the implications before signing.

Has your role changed? Is your employer lowering your compensation?  You may be questioning the employer’s right to do this, and you may be considering a constructive dismissal claim while still working. Well, do not wait too long.  A recent decision ruled that waiting 10 days was a sign that an employee had condoned the changes.

While hesitation to move forward with a constructive dismissal claim is understandable, there is a consequence to waiting.  Wait too long, and your right to claim constructive dismissal may be lost.  Without immediate action on your part, you may be seen to have accepted the changes made by your employer.

How can you claim constructive dismissal while you are still working?

Any unilateral substantial change to the terms of your employment, which you have not consented to, either explicitly or implicitly, could trigger a right on your part to claim constructive dismissal.  A demotion, a significant reduction in your compensation, a material change in your duties and responsibilities resulting in a loss of status – these are all common examples of a potential constructive dismissal.  In the face of such changes, continuing to work without any protest or claim against your employer may be considered as implicit consent or acquiescence to the changed employment terms.

In a recent decision, Kosteckyj v Paramount Resources Ltd, 2022 ABCA 230, Paramount unilaterally announced across-the-board reductions in salaries and benefits as part of corporate cost-cutting measures.  Ms. Kosteckyj neither expressly rejected nor accepted the salary reduction. Without saying anything, she continued to work for 3 weeks following the reduction in pay.  The company then downsized to further cut costs and she was fired. The Alberta Court of Appeal found that the fact she continued to work for three weeks after the reduction in pay was “indisputable evidence” that she had accepted the new terms of employment.  As a result, the termination pay she received from being fired was calculated based on her newly reduced salary. At the end of the day, her failure to signal her rejection of the lower salary meant that her termination package was $10,000 less than if she had expressed disagreement with the changes to pay.  A simple failure to act cost her significantly.

What does this court decision mean for you?

Substantial changes to employment terms often occur as employers try to reduce costs.  Ms. Kosteckyj’s situation likely happens to many people.

If you find yourself in this situation, remember that hesitation and inaction can be costly.  The most important thing to do is to make clear you do not agree with the changes to your employment, so you continue to work under protest.  You should also contact an experienced employment lawyer to help you assess your situation before you take the drastic step of quitting your job and claiming constructive dismissal.

If you wait too long after changes are imposed on you, you could end up being seen as having consented to the changes.  If you do not wait at all, and immediately resign out of frustration, claiming constructive dismissal, you may be seen to have simply resigned voluntarily and not be entitled to any termination pay or EI benefits.  A proper legal assessment of your situation early on will give you more certainty about whether the changes trigger a possible constructive dismissal claim and guide you on what to do next.

Consult with an Employment Law Firm  immediately because the window for action is narrow. And the stakes are high.

Ontario’s deemed Infectious Disease Emergency Leave (“Deemed IDEL“) period ended on July 30^th, 2022. This does not affect employees’ entitlement and employers are being held accountable and successfully sued for constructive dismissal for their employees.

Employers who relied on IDEL to put employees on leave are at immediate risk of substantial cost, as employees who are not returned to work can sue for constructive dismissal. And as a result of the Waksdale decision most contracts written before June 6 2020 are invalid. In practical terms, most employees with long term records of employment may be due up to 2 years, or, on average, 1 month per year of service under common law.

Leaving employees on indefinite leave has costly consequences when constructive dismissal is alleged.  It is important to seek advice from experienced counsel to craft a strategy to mitigate, if not eliminate, these liabilities.

Deemed IDEL came into being during the pandemic to provide relief to both employees and employers. For employers, Deemed IDEL was intended as a relief measure. Under certain circumstances, IDEL allowed for temporary reduction or elimination of employee hours and wages, without triggering a deemed termination, but with an obligation for the employer to return the employee to work after the end of the IDEL period. With the Deemed IDEL period ended, employers can no longer place their employees on leave indefinitely, even if the pandemic still impacts their business. that the Deemed IDEL period has ended, employers may still rely on temporary layoff provisions in Ontario’s Employment Standards Act (“ESA”) to continue to place employees on leave. However, there are significant restrictions on the length of temporary layoffs. A breach of these restrictions might be deemed as constructive dismissals under the ESA, and employees might be entitled to termination pay and other provisions if they claim constructive dismissal.

What should you do if your employees were on IDEL past July 30^th?

Employers who currently have employees on IDEL will need to decide whether to call these employees back to work, rely on ESA temporary layoff provisions to extend the time before calling them back to work, or terminate them to avoid a breach of the ESA. (Depending on whether employees’ benefits are continued or not during the layoff, there are two-time limits under the ESA for temporary layoffs.

What employers should know about temporary layoffs moving forward

The ESA does not create a right for the employer to temporarily lay off its employees, but sets the conditions for and duration of layoffs. However, unless an employer has the contractual right to do so, employees put on temporary layoff can claim constructive dismissal, notwithstanding the ESA temporary layoff provisions. Employers are warned to closely comply with the conditions for temporary layoffs to avoid potential costly claims.

To weigh the options you may have, you need to consider the following three questions. First, are you truly eligible for an exemption? Second, is your employer justified not to accommodate your exemption? Third, what will your employer do next?

Are you truly eligible for an exemption?

Covid-19 vaccine exemptions are rare. Personal preference or opinion, or fear for possible side effects without evidence will not justify a request for an exemption. In addition, the proof for the exemption has to come from a reputable source that has the expertise or the status to give that opinion. The burden is generally on the employee to show sufficient evidence to prove that they need an exemption. Otherwise, the employee may not be able to demand an exemption.

Is your employer justified to not accommodate your exemption?

Let us assume that you are eligible for an exemption. If you are eligible for an exemption, that generally means you are protected under the that requires employers to accommodate  employees. For example, if an employee has a medical condition that prevents them from getting the Covid-19 vaccine while the employer has a mandatory vaccination policy in place, the employer has to accommodate the employee instead of punishing the employee for not following the mandatory policy. Possible accommodation could involve working from home, daily rapid tests, masking, and physical distancing, changing roles, or other ways that could achieve the same purposes of the mandatory vaccination policy. If the employer fails to accommodate the employee who has a legitimate ground not be vaccinated, the employer may violate the employee’s human rights and face the consequences as a result.

That being said, an employer’s duty to accommodate is not without limit. If there is no way to accommodate an employee without causing undue hardship to the employer, the employer will be justified not to accommodate the employee. For example, if the government requires the employer to implement a mandatory vaccination policy in their workplace without exceptions, the employer will be unable to allow the employee to physically work at their workplace while unvaccinated. If the employee has to work at their workplace, and there is no other  alternative role that the employer can offer the employee, the employer would be justified not to provide accommodations.

What will your employer do next?

If an employer will not accommodate an employee’s requests for an exemption, there are many possibilities for next steps. For example, your employer may:

• eventually choose to do nothing except for several warnings as they may not really want to terminate you
• offer you a different role or shift schedule where mandatory vaccination is not necessary.
• temporarily lay you off until it becomes safe to work without vaccination.
• terminate you with or without cause.

There is no one-size-fits-all solution. That said, you may want to try to negotiate with your employer first to see if there is a solution that benefits both parties. If negotiation is not working, you may need to consider how to assert your legal rights, as you may be entitled to human rights damages, a termination package, or reinstatement if terminated. However, you must keep in mind that these rights may not apply depending on the situation, and you may have difficulty finding another job during the pandemic if you leave your current employment due to a mandatory vaccination policy.

If you need guidance from an experienced employment lawyer, Hum Law Firm can ensure you receive a fair severance package.

Complete our Free Assessment Form Here

Call HUM Law today at (416)214-2329 or email info@thehumlawfirm.ca

What happens if I refuse to comply with my employer’s mandatory vaccination policy? Two Questions Answered: I have no termination letter only the ROE? I was fired with cause, am I owed severance and termination pay? In many cases yes.

Many employees are now facing unemployment because they have not complied with a mandatory vaccination policy. We have put together responses to two frequently asked questions to help inform employees to ensure fair treatment.

 

Question #1: My employer sent me my ROE with no termination letter, what do I do?

The first thing you should do is look at which Record of Employment (“ROE”) code your employer has used. The employer has the choice of the following reasons (or codes):

• A – work shortage
• B – strike/lockout
• C – return to school
• D – illness/injury
• E – quit
• F – pregnancy or adoption
• G – retirement
• H – work-sharing
• J – apprentice training
• M – dismissal
• N – leave of absence
• K – other

Typically, employers will use the ROE codes A or K for layoffs or terminations without cause. Therefore, if your ROE code is M, you have likely been terminated with cause. This will impact your entitlement to Employment Insurance (“EI”) benefits.

You should communicate with your former employer to determine why you have been laid off or terminated and, if terminated with cause, on what grounds. If terminated without cause, you are entitled to a severance package. If terminated with cause, you could be entitled to a severance package if your former employer has unjustifiably terminated you with cause. If you have been laid off, you might be able to claim constructive dismissal. And your employer may owe you full severance and termination pay. Contact us to protect your rights to severance and termination pay.

 

Question #2: Can my employer fire me with cause and pay me nothing? Not in many cases.

Recall that your employer can always terminate you without cause.  Your employer can also terminate you with cause, but your employer must be able to show at least wilful misconduct, disobedience, or wilful neglect of duty in order withhold your Employment Standards Act (“ESA”) minimum entitlements on termination, and pay you nothing.  If wilful misconduct cannot be shown, then your employer at least owes you termination and severance pay in accordance with the ESA minimum standards, and possibly significantly more.

Contact us immediately if you were fired with cause as you may be owed significant severance. 

 

Conclusion

The law around terminations for breach of a mandatory vaccination policy is a new and emerging area. Every case will be different, and many employees are being unjustifiably terminated with cause. We will protect your rights.

If you need guidance from an experienced employment lawyer,

Hum Law Firm can ensure you receive a fair severance package.

Complete our Free Assessment Form Here

Call HUM Law today at (416)214-2329 or email info@thehumlawfirm.ca

Question: My employer has given me a mandatory vaccination notice stating that if I do not get vaccinated, they will terminate my employment without severance or termination pay. What are my legal rights?

Many employers have implemented mandatory vaccination policies that require employees to be fully vaccinated against COVID-19.

If you are terminated because you failed to comply with a mandatory vaccination policy, the first question to consider is whether there is any breach of human rights. Second, you have to consider if your employer will do so on a “with cause” basis, or will terminate “without cause” and provide termination pay.

Finally, if there is to be termination pay, you have to find out if it will be based on the minimum standards of employment law legislation – generally in Ontario, the Employment Standards Act (“ESA”) – or on common law reasonable notice.

Mandatory vaccination policy exemptions

There are few exemptions to mandatory vaccination policies under human rights legislation. In Ontario, the Human Rights Code (“Code”) indicates exemptions would be religious belief or a medical condition protected by the Code. However, both long- and short-term conditions preventing an employee from being vaccinated are rare (such as a diagnosed allergy to something in the vaccine). Employers are entitled to ask for proof of the medical condition. Further, religious exemptions are also rare, as there are few religions or creeds that prohibit vaccination.

Termination without cause

An employee can always be terminated without cause, so the fact that it is based on vaccination status does not matter, so long as your human rights are not being breached. In this case, employers generally do not cite why you have been terminated. However, if you are terminated without cause, your employer must provide you with termination pay, sometimes called a severance package. The amount of this severance package will depend on whether you are entitled to common law reasonable notice or only the ESA minimum, with the former usually entitling you to a significantly larger severance package.

Termination with cause

Your employer could also terminate you with cause, for failure to comply with the mandatory vaccination policy, and not provide you with any notice or pay in lieu of that notice.

Terminating an employee with cause and not providing any termination pay or severance is more difficult for an employer. They must demonstrate that you were “guilty of wilful misconduct, disobedience, or wilful neglect of duty that is not trivial and was not condoned by the employer.” Some employers will allege that this high standard has been met by an employee failing to comply with a mandatory vaccination policy. However, this has not been tested in the courts and may only be justifiable in certain settings, such as hospitals or nursing homes or not at all. So today employees should contact us and consider proceeding to sue and test the employers resolve. 

You may also be terminated with cause but still provided with a severance package that satisfies the minimum standards of the ESA. However, your employer can withhold your common law entitlement by relying on the common law standard of cause or just cause. In this scenario, your employer has acknowledged that your misconduct does not meet the higher ESA standard but does meet the lower just cause standard to justify termination. The onus remains on an employer however to show that breach of unilaterally imposed vaccination policy can be basis for common law cause. If they cannot you might still be entitled to full severance and termination pay.

We encourage you to seek assistance from Hum Law firm immediately if you are terminated to ensure you are treated fairly.

If you need guidance from an experienced employment lawyer, call HUM Law today at (416)214-2329 or email info@thehumlawfirm.ca
Complete our Free Assessment Form Here