An employment relationship can end through an employer’s conduct even without a formal dismissal letter. In Potter, the Supreme Court of Canada explained the framework for constructive dismissal.

The employee held a fixed-term executive position. His employer suspended him indefinitely with pay, assigned his duties to someone else, and did not adequately explain the suspension.

The Court found that he had been constructively dismissed.

It described two routes to establishing constructive dismissal. One involves an unauthorized breach that substantially changes an essential contractual term. The other involves conduct which, viewed cumulatively, shows that the employer no longer intends to be bound by the employment contract.

Continuing salary did not, by itself, establish that the suspension was permissible. Its duration, justification, contractual basis, and surrounding circumstances mattered.

The decision does not mean that every suspension or workplace change amounts to dismissal. The assessment is contextual and depends on the employment relationship and conduct in question.

What this could look like in practice

Imagine being instructed to stay home indefinitely while your responsibilities are permanently reassigned. You continue receiving salary but cannot obtain a clear explanation of your status.

A useful consultation would include the agreement, instructions received, changes to duties, and attempts to obtain clarification. Record dates and distinguish confirmed decisions from workplace rumours.

That review can help identify the issues before you send a resignation or accept a proposed arrangement.

The takeaway

Obtain advice before deciding that a significant workplace change requires resignation. Understanding the contractual position and available responses is important before taking a step that may later be characterized differently by the employer.

Contact JY Law to discuss your circumstances and how we may assist you.

This information is provided for general educational purposes only and does not constitute legal advice. The example is hypothetical. Your rights depend on the facts and current law. Reading this page or contacting our firm does not, by itself, create a lawyer-client relationship. If you have further questions or require advice about your situation, please contact us.