Employers cannot unilaterally alter an individual’s employment contract, unless the contract explicitly provides for the modification(s). Changing contractual terms without approval may give an employee the right to involuntarily resign and sue for severance, especially when the changes are significant. In legal jargon, this is referred to as constructive dismissal.
Generally, the following circumstances are tantamount to constructive dismissal:
– A reduction in compensation;
– Demoting someone to a lesser role; and
– A geographic relocation.
The examples listed above are typically viewed as undesired changes because of their potentially adverse impact on a person’s income, status, or lifestyle. Therefore, it is not difficult to see why they can give rise to constructive dismissal.
What about changes that most people find desirable, such as an increase in status? According to our courts, what many view as workplace improvements can also result in constructive dismissal.
In Parks v. Vancouver International Airport Authority, the British Columbia Supreme Court held that a promotion constituted constructive dismissal. In that case, Howie Parks’ job at the Airport was upgraded as a result of a corporate reorganization. Among other things, he was given the title of manager and was assigned the supervision of 30 additional staff. Howie was not given the option to accept or decline the promotion, which also included changes to his work hours and a new compensation plan under which he could earn less or more than what he previously earned. Ultimately, the Court decided that the unilateral promotion would have resulted in fundamental changes to Howie’s contract, and consequently, he was entitled to severance.
Employers cannot insist that their staff assume new positions, even if the changes are generally viewed as improvements. When implementing changes, employees have a right to be consulted and must be provided with the opportunity to accept or decline significant modifications to their employment. Otherwise, they might have the right to quit and sue for damages.
When confronted with the unilateral implementation of undesirable changes at work, individuals are strongly encouraged to consult with employment counsel. This will allow them to explore all their options, and implement strategies that are best suited to accomplish their goals.
The employment lawyers at Singh Lamarche LLP frequently advise employees and employers on all matters of employment law, including constructive dismissal. If you believe that you may be facing a constructive dismissal, our lawyers are ready to answer all your questions and provide you with invaluable guidance.