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Constructive Dismissal

Expert: David Harris

Dan asked:

My employer, a major food distributor, has announced that as of 2003 all salaried sales representatives will be forced to work for an extremely small base salary plus commission. Can this be construed as constructive dismissal? I have seventeen years of service with an outstanding portfolio of achievement and only commendation letters on file. I am 47 years old. What could I expect in compensation if I resign over this issue?

David Harris answered:

Yes, the action can be seen as an act of dismissal. Constructive dismissal references acts of the employer which may be seen by the employee as an act of dismissal, one which can be seen objectively as repudiating the employment relationship.

The problem here however is that the employer has given notice of the "dismissal," which is the legal obligation - to give notice of termination.

There will be a damage claim possible only if certain conditions are true:

  1. There is no written agreement setting out the employer's right to change compensation terms;

  2. The notice period to which the employee is entitled must exceed the notice that the employee has received to date;

    For the above, I would need a complete history of the employment relationship; the high side of notice would be 2 years.

  3. Presuming, momentarily, the notice period would exceed that offered to date, there would be a claim for the period in excess of that provided. This presumes that the employee remains unemployed beyond the effective date of the new compensation schedule.

  4. There may be a claim for a statutory payment under the Ontario Employment Standards act, where the employee has been employed for at least 5 years and the annual payroll of the company exceeds 2.5 million annually. This payment does not require unemployment after the effective date of the new compensation schedule.

About the author

David Harris is an employment lawyer at

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