A constructive dismissal occurs where your employer significantly changes some term of your employment or makes work so intolerable for you as to undermine the basic terms of your employment. If you have been constructively dismissed, you may quit from your employment and sue for damages for wrongful dismissal, as if they have been terminated without cause.

Although many employees are loosely familiar with what kinds of situations amount to a constructive dismissal, courts and employment lawyers have found constructive dismissals to have occurred in a wide variety of circumstances, including one or more of the following:

• Reduction in pay/hours of 20% of more;
• Demotion;
• A significant change in working conditions or responsibilities;
• Significant changes to hours of work;
• A layoff/furlough (in some circumstances);
• Suspensions from work (both paid and unpaid);
• Relocation of the job;
• Harassment and other forms of workplace abuse.

Why is constructive dismissal rarely the best option?

You may feel that you have been mistreated and that you are entitled to legal redress – and you may be absolutely correct. Even still, claiming constructive dismissal is rarely our first recommendation to our clients. This is for a number of different reasons:

• Damages

In most constructive dismissal cases, your best-case scenario is to recover damages equivalent to what you would receive as if you were dismissed “without cause”. While it is possible to claim additional “general damages”, those damages are remote, difficult to predict, and very difficult to recover in a settlement. But more to the point, those types of damages are usually not any more likely in the context of a constructive dismissal claim.

• Mitigation

In some circumstances, your employer may respond to your claim of constructive dismissal by inviting you back to work. In many cases, failing to accept this employer’s offer of re-employment can represent a “failure to mitigate” your damages, thereby significantly reducing or even eliminating your entitlements. This can lead to “stand-off” situations in constructive dismissal claims, where both you and your employer are incentivized to pretend like return to work is the goal (even if no one truly wants that!).

• Risks and rewards

Claiming constructive dismissal can be risky. Again, to claim constructive dismissal, you must quit from your employment and sue as if you have been wrongfully dismissed. If your claim is unsuccessful, you will be found to have quit, and you will be entitled to nothing; you may even have to pay some of your employer’s legal costs if you lose at trial.

What are the alternatives to claiming constructive dismissal?

Employment law firms may recommend several alternatives to claiming constructive dismissal, which can be more strategically advantageous, depending on the circumstances:

• The “squeaky wheel” strategy

Under the squeaky wheel strategy, employees consistently (but respectfully!) state, re-state, and re-re-state whatever complaint they have to supervisors, managers, HR, owners, or anyone with the authority to respond. The goal is to force the employer’s hand to either fix the problem, or to terminate the squeaky wheel without cause. In most cases, both of these are better results than claiming constructive dismissal.

• The mediated resolution strategy

Where the relationship is still somewhat positive, employees may be able to resolve their concerns by having an open, frank discussion with the employer, and seeing if you can put your differences aside by meeting in the middle.

• The buyout negotiation

In some cases where the situation has become contentious, employees may retain an employment lawyer or employment law firm to reach out to the employer and attempt to negotiate a severance buyout. This removes a lot of the risk of claiming constructive dismissal, and can be far less stressful and lead to an earlier resolution compared to the “squeaky wheel” approach.

If you have been terminated, laid-off or severed from your job contact the employment lawyers at Share Lawyers. Our experienced team of Employment Law lawyers can help. We offer free consultations and there are no fees unless we win your case. Find out if you have an Employment Case!

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