Constructive Dismissal

Cousins. v QEC, 2016 NUCJ 1:

[50] The onus is on the plaintiff to prove, on a balance of probabilities, that QEC’s demotion of the plaintiff constituted his constructive dismissal.

[51] The law pertaining to the constructive dismissal of an employee by an employer was outlined by the Supreme Court of Canada in Farber at para 33:

Thus, it has been established in a number of Canadian common law decisions that where an employer unilaterally makes a fundamental or substantial change to an employee’s contract of employment – a change that violates the contract’s terms -- the employer is committing a fundamental breach of the contract that results in its termination and entitles the employee to consider himself or herself constructively dismissed. The employee can then claim damages from the employer in lieu of reasonable notice.

[52] This constructive dismissal principle was recently applied in Potter v New Brunswick (Legal Aid Services Commission), 2015 SCC 10 (CanLII), [2015] 1 SCR 500 [Potter].

[53] The Court, in its legal analysis, must apply a two-part test:

1. Has a breach of contract been proven?

2. If the answer to the first question is yes, the Court must then determine whether that breach substantially altered an essential term or terms (Farber at paras 34, 37).

[54] The analysis is an objective one: would a reasonable person, at the time the breach occurred and in the same circumstances as the employee, have felt that an essential term of the employment contract had been substantially changed? (Farber at paras 39, 60).