There is a very basic principle that runs through every legal case – you cannot do indirectly that which you cannot do directly.

 

In appropriate fact situations, a court will see the employer’s conduct, even where it does not directly terminate employment, to be “constructed” to be dismissal. Typically this means that the employer had altered a fundamental term of the employment relationship to the detriment of the plaintiff.

 

An evident example is offered by the employer reducing the salary paid to the employee by 50%. Other examples may include a transfer to a demoted position, or treating an employee in a persistent humiliating and abusive manner. Care must be taken in making this assertion as the employee may be taking on unemployment in exchange for a lawsuit, which may not be an attractive proposition. Usually the employee must decide whether he will accept the altered position, in which case he has condoned the change, or speak up and say no. The leading case on the definition of constructive dismissal is the Supreme Court of Canada decision in Farber v Royal A. E. LePage.

 

Some cases have held that the employee must accept the demoted position, where the salary has remained the same and the work environment is not acrimonious. (See Mifsud v McMillan Bathurst – Ontario Court of Appeal) Many subsequent decisions have distinguished Mifsud, but given the dramatic consequences of an adverse finding, it important to obtain legal advice before any action is taken. A good example of Mifsud not applying is the recent decision of Chandran v National Bank. Even though the new position involved no decrease in compensation, the presence of a difficult work environment due to performance allegations meant Mr. Chandran did not have to accept the alternate position which was offered and his claim accordingly was successful. This case is presently under appeal.