What is Constructive Dismissal?

You may have heard this phrase before and wondered what it means. “Constructive” in this phrase does not mean positive or helpful. It means “equivalent to”.

It comes about when an employer significantly worsens the conditions of employment of one or more employees. The conditions of employment most often changed are: wages, benefits, duties, position, and/or location. Constructive dismissal may also occur where the employee is treated unfairly, arbitrarily, or disrespectfully.

Subject to the important qualifications below, an employee who has been constructively dismissed can quit their employment (or withdraw their services) and still sue for damages (normally an employee who quits cannot sue).

In order for any such claim to be successful it is generally necessary for the employee to show that quitting was the only reasonable alternative because the effect of the change of work conditions made it untenable for the employee to carry on. It follows that a respectful and thoughtful change of conditions of employment with advance notice and reasonable implementation will not justify a withdrawal of services.

Employees who are adversely affected by change of work conditions should not assume that they will recover damages if they quit and sue. It may be more reasonable to look for another job while they are still employed.

Article written by Alfred C. Kempf

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.