A constructive dismissal is a form of termination where the intention to terminate is not stated explicitly. The words or conduct of the employer demonstrate the intention to terminate. It can be said that it is dismissal by conduct.

A constructive dismissal may be described as follows:
“A constructive dismissal occurs when an employer makes a unilateral (one sided) and fundamental change to a term or condition of an employment contract without providing reasonable notice of that change to the employee.

Such action amounts to a repudiation of the contract of employment by the employer whether or not the employer intended to continue the employment relationship. Therefore, the employee can treat the contract as wrongfully terminated and resign which, in turn, gives rise to an obligation on the employer’s part to provide damages in lieu of reasonable notice.

Not all changes to employment amount to a constructive dismissal. If an employee accepts the changes to the terms of employment, he or she is then employed under the new terms of employment.

In the absence of the consent of the employee or authorization in the contract of employment, the theory of constructive dismissal may impose a limit on the changes to the terms of employment that an employer can unilaterally impose.

Caution should be exercised by the employee when assessing whether a change to a term of employment amounts to constructive dismissal. The change must be unilateral, the term must be fundamental (the term must be important), of a sufficient degree and without proper notice to the employee.

The theory of constructive dismissal is very dependant upon the circumstances. To determine whether constructive dismissal has occurred it is recommended that employees seek legal advice when changes have been made to the terms of their employment contract.


(repudiation - a refusal to acknowledge the employment contract)
( unilateral - a one sided decision by the employer)