Job Termination
The murky world of constructive dismissalIn this deteriorating economy many employers are asking, or indeed demanding, that their employers take a cut in pay or time off with no pay. ALAN SHANOFF |
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Others are attempting to cut expenses by reducing benefits.
What is an already overburdened and beleaguered employee supposed to do? Regardless of the law, if you are being reasonably compensated and need the job you are likely to acquiesce.
But what are your rights? This takes us to the murky world of constructive dismissal. By now we all know that employers have certain financial obligations when they dismiss employees without just cause. But employers have the same financial obligations when they "constructively" dismiss employees without just cause. By "constructive dismissal" lawyers refer to conduct that is equivalent to a dismissal.
There are two types of categories of constructive dismissal.
The first category consists of changes to the workplace or terms of employment that would render it intolerable or unreasonable for the employee to remain employed. This includes being subject to intolerable working conditions, like having to work for an abusive boss.
The second category covers any significant negative change to a material part of the employment relationship.
Within these two categories there is a lot of room to debate whether any particular action amounts to a constructive dismissal. Some situations are easy to analyse. Modest changes made to your medical benefits, removal of previously provided free bottled water and coffee, and removal of free parking are all examples of changes that should not be deemed to be significant enough to amount to a constructive dismissal.
PAY CUT
Significant changes to your pay, your responsibilities or working conditions should amount to a constructive dismissal. But the key word is "significant." A modest pay cut of 5% is likely insignificant while a 20% pay cut would clearly be significant. A slight demotion, particularly if you are having difficulty in performing to expectations, would not be significant. Being forced to take a day off without pay once a month is likely not significant.
Not to make light of this discussion, two Seinfeld episodes may be instructive. It wasn't a constructive dismissal when George Costanza was told he was no longer allowed to use the executive bathroom (season 1) but it surely was a constructive dismissal when his office was moved to the bathroom (season 9). As you can see it is all a matter of degree.
Determining whether any specific change or group of changes amounts to a constructive dismissal requires a keen eye in balancing the rights of employers to manage their workplace with the reasonable expectations of employees. Changing economic times will result in
different answers. Courts are likely to be more tolerant of employer changes in this recessionary economy. Judges should understand that employers may need more leeway to survive in this economy, so close calls are likely to go to the employer.
If you think you've been constructively dismissed you should consult an expert in employment law. That's because there is a huge risk in being wrong. If you've been constructively dismissed, you have the right to leave your employer and claim compensation for a wrongful or unjust dismissal. But if you are wrong, then you'll not only lose and have to pay your own legal fees, in most cases you'll be required to pay some of your employer's legal fees and you'll, in effect, have traded a paying job for a losing lawsuit.
LAWSUIT
If you choose not to leave your employment you still have the option of just informing your employer that you consider yourself to have been constructively dismissed. If nothing changes and you aren't given a package you have the option of suing your employer while you remain an employee. This tactic can also backfire.
So if you think you've been constructively dismissed get expert advice, or as employment law expert Barry Kuretzky wisely says: "To hear a good tip before you jump ship, get some advice and always think twice."
Alan Shanoff was counsel to Sun Media for 16 years and is currently a freelance writer and teaches media law.
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