An employee may be dismissed by their employer, even if they never hear the words “You’re fired!”

When we think about being dismissed from work, we often picture a situation where the worker is called into the boss’s office and asked to close the door behind him, then — after nervously taking a seat — he is told the bad news, or handed the infamous pink slip. In this unfortunate scene, the employer explicitly communicates that the employment relationship has come to an end — usually, the employee is given a formal termination letter.

However, termination is not always so clearly stated, in fact, the employer may have never said anything at all. An employee may be considered constructively dismissed where the employer’s conduct amounts to a significant breach, going to the root of the contract of employment or where it shows that he no longer intends to be bound by one or more of the essential terms of the contract. This arises in those situations where the employee feels they have no choice but to resign.

The words significant and essential, used to describe the types of breaches that give rise to a constructive dismissal, are very important. Not every instance — maybe not even most instances — of unreasonable conduct by an employer will amount to constructive dismissal.

The threshold goes far beyond simply having a bad day at work or disagreeing with a particular decision made at last week’s meeting. The types of breaches that courts have considered amounting to constructive dismissals include:

– Significant pay cuts, without the employee’s consent;

– Forced major changes to work hours, conditions and/or location; and

– Workplace bullying and harassment.

The breach typically relates to an express term of the employment contract (eg, the obligation to pay a certain wage) or, and perhaps more commonly, an implied term, such as the duty to maintain mutual trust and confidence (e.g., the employee being harassed or assaulted by the employer). It may even arise in one of those “resign, or else…” situations, where the “ or else” is that the employee will be fired or met with some other material and detrimental consequence, if they do not leave “voluntarily”.

It can often be difficult drawing the line between the “or else” cases, and those cases where the parties negotiate and agree to a mutual separation, particularly where the negotiated separation arises from the employer’s dissatisfaction with the employee’s work. In those cases, the employer needs to take great care in how the negotiations are approached and greater care still in preparing sound agreements that address the risk of a later unjustifiable dismissal allegation.

A constructive dismissal is still a dismissal, and the dismissed employee will be entitled to bring a claim, ultimately, to the Industrial Disputes Tribunal, alleging unfair/unjustifiable termination. The employer, therefore, faces a real financial risk in cases of constructive dismissal.

As an employer, your conduct matters, and bad conduct can cost you big bucks! Care should be taken in addressing employee’s complaints regarding the circumstances of their work. Where you find it necessary to separate from an employee, the relevant formal processes should be followed. When in doubt, it is always better to seek advice.

Meghan Falconer is an associate at Myers, Fletcher & Gordon, and is a member of the firm’s Litigation Department. She may be contacted via email at meghan.falconer@mfg.com.jm or www.myersfletcher.com. This article is for general information purposes only and does not constitute legal advice.