Legal Law

Can Constructive Dismissal Claims Be Resolved Through Arbitration?

Can Constructive Dismissal Claims Be Resolved

When an employer’s actions or behaviour makes your work environment intolerable to the point that you feel forced to resign, you may have grounds for a constructive dismissal claim. While it can be challenging to distinguish between a change in workplace conditions that is simply not reasonable and an action that constitutes wrongful termination, recognizing the signs of constructive dismissal can help you determine the appropriate next steps for your situation.

The most common reason for a constructive dismissal claim involves an employer changing your employment terms unilaterally. This can include a reduction in pay, changes to your schedule or location of work, alteration of job duties and responsibilities, or a significant change to the status of your position within the company hierarchy. These changes are considered a breach of an employee’s contract when they make your working conditions intolerable. However, it’s important to note that the change must either be many minor changes (death by a thousand cuts) or substantial in order for you to qualify as having been constructively dismissed.

For example, if your employer reduces your salary by 5%, this may not be enough to consider a substantial change, but if your employer relocates you from Toronto to Muskoka, it is likely sufficient. In addition, any form of bullying or harassment from your employer or coworkers can also cause you to feel compelled to resign, but you must document these incidents and seek legal advice before you decide on a course of action.

Can Constructive Dismissal Claims Be Resolved Through Arbitration?

Often, these types of situations can be resolved through discussions with HR representatives and/or filing a complaint with the relevant agency. However, it’s crucial that you understand how to recognize the signs of constructive dismissal, so that you can take swift action to protect your career and financial well-being.

Documenting incidents that may be considered a breach of your employment contract is key. It’s also a good idea to consult an experienced Toronto constructive termination lawyer before taking any action in these circumstances, as the law is complex and may affect your ability to file a successful lawsuit.

If your employer has made an unjustified change in your working conditions, you could be entitled to damages for constructive dismissal. This includes compensation for your lost earnings (salary, commissions, bonuses, and other monetary allowances) as well as the length of notice that you would have received if you had been properly terminated. In some cases, your employer’s bad faith conduct could warrant aggravated and punitive damages as well.

Although a constructive dismissal claim can be filed in court, it’s often more efficient to resolve the matter through arbitration. In arbitration, you and your employer agree to a neutral arbitrator who will hear the evidence surrounding your claims, including any allegations of wrongful dismissal, and make a binding decision based on the facts and law. In general, arbitration is more cost effective than filing a traditional court case and will also keep your matter out of the public eye.

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