Constructive dismissal occurs when an employer unilaterally changes a fundamental aspect of employment that would reasonably force an employee to resign. A fundamental term can relate to pay, status, key responsibilities, and so on. Further, constructive dismissal can also arise from a poisoned work environment, where conditions have become intolerable for the employee. A poisoned work environment usually occurs through repeated instances, but, in rare cases, can also result from one serious isolated incident.
Instances that can create a poisoned work environment include harassment, discrimination, unwarranted discipline or negative performance reviews. A poisoned work environment can be created directly by the employer or management, or behaviours that the employer has condoned or did not reasonably act to prevent.
There are instances where an employer or manager will deliberately create an intolerable environment to force an employee to quit. Noticing these signs of constructive dismissal is important, as this is often done to avoid offering a severance package to an employee that the employer wishes to dismiss. Signs may include a sudden disciplinary record or negative performance reviews being built against a long-serving employee with no prior history of such. In addition, demotion is also a common tactic used to force an employee to quit, and should, in most instances, be a red flag.
The remedy available to employees is to leave their employment (i.e. quit) and then argue a constructive dismissal case. If successful in proving constructive dismissal, compensation awarded by a court would be payment equivalent to a reasonable notice period. Further damages may also be pursued depending on the adverse work conditions created by the employer; this may include aggravated damages (for mental distress, psychological harm, etc.), or in rare instances punitive damages (for reprehensible behaviour by the employer).
The onus of proving constructive dismissal falls upon the employee, which makes it imperative to seek the advice of an employment lawyer before deciding to leave employment.