When work gets to the point that so much is changing, and negative feelings are building up to where you feel like quitting, there is actually a small and mostly unknown part of the ESA where you may technically be allowed to claim you were fired. That would make you eligible for all the rights and payments available to any other terminated employee. This is called constructive dismissal, and Ontario law may treat your situation as a termination. If you are an employer and have not heard of this either, this is actually an important issue to understand.
What Constructive Dismissal Actually Is
Under the ESA, constructive dismissal occurs when an employer makes a significant change to a fundamental term or condition of employment without the employee's consent, and the employee resigns in response within a reasonable period of time. The Ontario government's own ESA guide specifically identifies: significant salary reduction, significant negative change in work location, hours of work, authority, or position, employer harassment or abuse, and the classic "quit or be fired" ultimatum.
For example, if your employer moves your role to a new location that requires you to commute to a warehouse, increasing your travel time by an hour each way with no public transit available, that can be considered a fundamental change to your terms of employment - even if your actual job title and salary remain the same.
Examples That Courts Have Recognised
Although it would be easy to list every example that might apply, it is not a good idea to assume your situation qualifies and to quit. Every situation is different. If this is something you are considering, seek legal advice first - an employment lawyer will be able to assess your specific circumstances, help you seek maximum entitlements, and ensure you do not inadvertently undermine your own claim.
That said, common situations that courts have found to constitute constructive dismissal include: salary cut without consent, demotion or title reduction, forced relocation to a new city, significant reduction in hours, stripping of key responsibilities, a reporting structure changed to a lesser role, and a toxic or harassing work environment the employer fails to address.
The framework courts apply comes from the Supreme Court of Canada's two-step test in Potter v. New Brunswick Legal Aid Services Commission: first, did the employer breach the employment contract; and second, would a reasonable person in the employee's position view the core terms of the job as fundamentally altered. Both questions need to be answered yes for a constructive dismissal claim to succeed.
The Timing Problem Most People Miss
There is a timing issue that most people miss, and it is the one that most often costs employees their case. To claim constructive dismissal, the employee must resign within a reasonable time after the change occurs. Staying on for months or years after a significant change, even while complaining about it, can be interpreted by a court as acceptance of the new terms. There is no fixed timeline in the legislation, and because the assessment sits with the courts it can be difficult to know how much time you have. That is why seeking advice from an employment lawyer or HR professional early is always the better path - they can help you assess your situation before the window closes.
What You Are Owed
A successful constructive dismissal claim entitles the employee to the same termination notice and severance as a without-cause termination. ESA minimums apply as the floor - one week per year of service up to 8 weeks for termination pay, and up to 26 weeks of severance pay if the employer meets the payroll threshold and you have 5 or more years of service. Common law reasonable notice goes significantly further in most cases, calculated using Bardal factors including age, length of service, seniority, and availability of comparable work. Before doing anything, run your numbers on the partnHR severance calculator to understand the range you may be entitled to. One important note - even after asserting constructive dismissal, you are still required to mitigate your losses by looking for comparable work. Failing to do so can reduce what you are ultimately awarded.
What Not to Do
The key is understanding what not to do. Do not resign immediately and emotionally. If you do, withdraw it in writing as soon as possible. Do not sign anything without understanding your rights. Do not accept a change verbally and then try to assert constructive dismissal later - verbal agreements are still legally recognised in Ontario, but they are harder to prove. If a verbal discussion happens about a change to your role, follow it up immediately with written communication to your employer confirming the conversation and what was said. That documentation matters more than most people realise.
A Final Thought
If your job today looks fundamentally different from the job you were hired to do, it is worth understanding your rights before you decide what to do next. Constructive dismissal is a legally protected right, however it is not a simple technicality. It is a complex area of law that requires anyone considering this path to think carefully, act promptly, and mitigate their losses throughout. If you were not aware of the mitigation requirement before reading this, that alone is worth knowing - because failing to meet it could leave you in a worse position than if you had taken a different approach entirely. Get advice before you resign.
Legislation Referenced
- Ontario Employment Standards Act, 2000 - s. 56(1)(b): Constructive dismissal definition
- Ontario ESA - Part XV: Termination and Severance
- Ontario ESA, s. 57: Notice of termination entitlement table
- Ontario ESA, s. 64-65: Severance pay
- Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10 - Two-step constructive dismissal test
- Farber v. Royal Trust Co., 1997 SCC - Fundamental change to employment terms
This article is for informational purposes only and does not constitute legal advice. For your specific situation, consult a qualified Ontario employment lawyer. Nothing on partnHR constitutes legal advice - all content is educational and informational only.