Employment: Why You May Want to Provide termination package
February 24, 2019
February 26, 2019

Article No. 7



Where it is not the employer who has terminated the relationship by terminating the employee, but rather the employee who has resigned or quit his or her job, an employer normally has no obligation to provide any notice or pay in lieu of notice. Certainly, where the employee resigns, for example, to take a better job, the employer has no obligation to give notice. Indeed, the obligation to provide reasonable notice in these circumstances rests with the employee.

But what is the situation where the employee resigns or contemplates resignation because of changes introduced by the employer to an employee’s working conditions or as a result of deteriorating workplace relationships? The Courts have long recognized that it is an implied term of every employment contract that an employer may not make substantial changes to the duties, status or remuneration of an employee, and that doing so strikes at the every root of the employment relationship. Where such is the case, an employee may be entitled to terminate the employment relationship by resigning and treating himself/herself as having been wrongfullyor constructively dismissed.

The Courts have also held that an employer may not create conditions at work which require an employee to work in an atmosphere of hostility, embarrassment or humiliation. If faced with such a situation, the employee may consider themselves to have been constructively dismissed.   

A resignation in the above circumstances, may permit an employee to bring an action for wrongful dismissal and seek damages for the losses sustained. However, not every change introduced by an employer nor just any “problem” at work will permit an employee to sue for constructive dismissal. The Courts must determine whether the conduct in question constitutes a “fundamental breach or repudiation” of the employment contract. This is a legal question which requires an assessment of the employment contract and knowledge of legal precedent with regard to the changes introduced by the employer. Whether a change amounts to a fundamental breach will depend upon the extent and nature of the changes in question, the surrounding circumstances, and an assessment of the above, not from the perspective of the “injured” employee, but from that of a “reasonable” employee. 

The existence at law of a constructive dismissal is premised upon the unilateral imposition of changes by the employer. An employee who accepts the changes or fails to object to them will likely be held to have consented to the employer’s actions and will not be able to later say that they have been constructively dismissed. Similarly, where the employment agreement permits the employer to make such changes, the Courts are unlikely to conclude that they were unilaterally imposed by the employer.  

Given the number of legal issues at play where constructive dismissal is involved, it is strongly urged that an employee, who is considering quitting in the face of changes in working conditions or a declining atmosphere at work, seek legal advice from an employment lawyer well in advance of any actual resignation. This is all the more important given that a resignation, where grounds for constructive dismissal cannot be established, will likely result in the extinguishing of one rights upon termination.