Most people assume that promotions are good news. After all, what employee wouldn’t want more responsibility, a better title, or a chance to move up?
But under Canadian employment law, even a promotion can amount to constructive dismissal if it fundamentally alters the terms of an employee’s role without their consent.
What Is Constructive Dismissal?
Constructive dismissal occurs when an employer unilaterally changes a fundamental term of the employment contract without the employee’s agreement. Rather than terminating the employee directly, the employer’s actions make it unreasonable for the employee to continue in the role.
Common examples of constructive dismissal include:
- Significant reductions in compensation;
- Substantial changes to duties or responsibilities;
- Relocation to a different office or city;
- Demotions, even without a drop in pay.
But could a promotion qualify? Surprisingly, yes.
Case Example: Promotion as Constructive Dismissal
In a notable British Columbia case, an employee at the Vancouver International Airport Authority was affected by a corporate restructuring. As part of the changes, he was offered a promotion that came with:
- Increased responsibilities;
- A higher status within the organization;
- A restructured bonus-based compensation system.
Despite the apparent advancement, the employee refused the role. He argued that the new compensation structure introduced uncertainty and risk, and that the changes were made without his consent.
The Court sided with the employee, finding that:
- The changes amounted to a fundamental alteration of his employment terms;
- The promotion introduced significant uncertainty regarding compensation;
- The employee was entitled to treat the situation as a constructive dismissal.
Key Takeaways for Employers
Even changes that seem beneficial—such as promotions—can trigger legal risk if:
- The new role materially alters core responsibilities, reporting relationships, or compensation structures;
- The changes are made without the employee’s agreement;
- The employment contract does not expressly permit such changes.
Before implementing structural or role-based changes (even positive ones), employers should:
- Review existing employment agreements for flexibility clauses;
- Consult with legal counsel;
- Obtain the employee’s written consent to the revised terms.
Advice for Employees
If your employer changes your role significantly—whether it’s called a promotion or not—you may have the right to:
- Refuse the new terms;
- Negotiate better conditions;
- Claim constructive dismissal, depending on how the changes affect your compensation, duties, or status.
Need Legal Advice?
At Singh Lamarche LLP, we advise both employers and employees on constructive dismissal risks. Whether you’re navigating workplace restructuring or concerned about changes to your role, our team can help ensure your rights and obligations are clear.
Contact us today for trusted legal guidance on employment changes and dismissal claims.
