Constructive dismissal occurs when an employee is indirectly and effectively dismissed from the position or terms he/she had previously agreed formed the employment. Without the consent of the employee, a substantial alteration is presented that fundamentally changes the terms of the agreed upon contract. Hagholm v. Coerio Inc. represents a successful claim for constructive dismissal.
The respondent had entered into her employment on the understanding that she could work from home three days a week. When this condition was changed, the respondent claimed constructive dismissal and ceased coming to work. The Motion Judge, on a motion for summary judgment, found that there was constructive dismissal because this was an essential term and the appellant arbitrarily withheld a bonus from the respondent. The Court of Appeal also confirmed that the respondent was not required to mitigate her damages for the appellant’s breach of contract in these circumstances.
Also in this case, the Court of Appeal granted the respondent’s cross-appeal that the Motion Judge erred by not awarding her the pro rata portion of her 2017 bonus for the two months she worked in 2017 and in failing to provide her bonus compensation for the duration of the notice period. Rather than remitting the matter to the Motion Judge, the Court of Appeal decided to directly determine the matter.
If an employee effectively accepts the new terms of employment by continuing to work beyond a reasonably acceptable time for declining, then said employee may have condoned the change and be may be foreclosed from claiming he/she has been constructively dismissed. Yet, if one claims constructive dismissal, refuses to work, and fails to prove constructive dismissal in Court, the employee may be found to have repudiated the employment contract and be ordered to pay costs. This is why it is important that individuals who believe they have been constructively dismissed seek prompt independent legal advice.
Please see Gilbertson Davis LLP’s related practice areas webpages on employment law and wrongful dismissals, contract disputes, and director and officer liability.
If you require legal advice regarding these practice areas, please contact Gilbertson Davis LLP for an initial consultation.
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