Constructive Dismissal

Time to Respond & The Need to Respond

There is uncertainty in each case as to what the time period for the election should be. Apart from stating that the time is a “reasonable period”, the law is without precise parameters. 1

It is expected, as the Court of Appeal stated in 2004 in Belton, that the employee should be given a reasonable time to assess the new terms before they are required to state an irrevocable position: 2

The vulnerability of employees who believe they may have been constructively dismissed and the difficulty of making the life-altering decisions they face must be recognized. In this context, it is understandable that such employees may wish to try to adjust to the new terms and conditions without affirming the employer's right to make these changes and before taking the radical step of advancing a constructive dismissal claim. Allowing employees reasonable time to assess the new terms before they are forced to take an irrevocable legal position not only addresses their vulnerability, but also promotes stability and harmonious relations in the workplace. For these reasons, I am of the view that the appellants had no obligation to acknowledge LICC's right to change the compensation schedule, and that their failure to do so did not constitute a repudiation of their agreement with LICC.

Significantly the Court of Appeal concluded that even if the agreement allowed the employer the right to make revisions on 90 days' notice, it did not mandate that the employees must agree to this revision. The trial judge’s view that the employees must do so, did not accord with the protective common law precepts intended to protect vulnerable employees. The employees were not obliged to affirm the revisions and it could not be just cause for the failure to do so.

The issue of a condonation plea is often that this is a finding which must be made as an inference from the facts. Often the argument is made that continuing with the working relationship is reflective of the acceptance of the employer’s actions.

Many cases have, however, concluded that this conduct alone is not necessarily a valid basis for making a finding of condonation. Employees should be given a reasonable time to resolve workplace issues. 3 The cited decision is an important one on this topic, as the Ontario Court of Appeal reversed the trial judge on this issue.

The Ontario Court of Appeal in its 2020 decision 4 also addressed this issue, noting that the determination of a “reasonable period of time” is case driven:

… Of course, reasonableness is not a rule but a standard, and it is a notoriously vague standard at that.  Thus, whether an employee acts within a reasonable period of time is a fact-specific determination that must be made by the trial judge based on consideration of a number of factors, and the trial judge’s finding is entitled to deference.  […] Each case turns on its facts.

In McGuinty, the Court of Appeal accepted the common sense proposition that a person who has continued to work for a lengthy time period may generally lead to the conclusion that the change has been accepted. However, in the specific instance before it, the Court noted that the employee’s inability to return to work due to his depression and anxiety could not lead to the conclusion that he willingly remained employed. The very conduct which caused his depression and remaining employed was caused by the employer’s wrongdoing.

[34] The respondent's delay in making his election must be seen in light of the particular circumstances of his employment. The funeral home was a family business in which the respondent had worked for over 30 years before selling it to the appellant. At that time, the respondent, a licensed funeral director, was 55 years of age. The sale was conditioned on the parties entering into the TCSA, which effectively guaranteed the respondent employment in his chosen profession until he reached retirement age, while continuing the goodwill his connection to the business maintained -- a business that continued to bear his family name. As noted above, the TCSA did not contain a provision for its cancellation but the respondent was subject to a non-competition clause that would fairly be understood by the respondent to bar him from working in his community in the only profession he had known -- again, until he reached retirement age. The time taken by the respondent to make his election must be understood in this context, as well as the depression and anxiety caused by the appellant. [page461]

The trial judge’s findings were upheld.

The Alberta Court of Appeal considered this issue in its 2022 decision. 5 The facts were unusual. The plaintiff had been presented with new terms of employment to which she did not respond. She was then terminated some three weeks later. The issue of the finding of a constructive dismissal was relevant only to when the clock for the damage award started. An adverse finding did not eliminate the claim but rather  marginally reduced the damage award.

The plaintiff had been presented with new employment terms on April 1. Her compensation was to be reduced between 16% to 20%. She had not replied to these new conditions as of her termination date on April 22. She had continued working in this time period. The finding of when the clock started was relevant as to which level of compensation should be used to assess the damage claim. The trial judge found that the failure to reply was not acceptance of the new terms. The trial decision stated:

“There is no obligation on an employee to advise an employer of an employee’s position on constructive dismissal before termination...”.

She further found that “Ms Kosteckyj was not required to make her decision in the 25 days between the reduction to her salary and the date when Paramount fully terminated her” 7

In one situation, the employee had been advised of “significant and substantial changes” to his job functions. These included a change in title from General Manager to Operations Manager. His salary remained the same, as did his right to the company vehicle and his eligibility for a bonus. He remained part of the executive management team, and a director and signing authority. These events took place on August 7. He was subsequently given a smaller office. His claim of constructive dismissal was made on November 28. He then stated he would remain employed to mitigate his damage claim. On December 20, he was advised that he would not receive his 2018 bonus.

The employee then took action to leave his employment on January 7, five months following the first revision to his working conditions and 5 weeks after advising the employer he had been constructively dismissed. The question became whether this action was effected “within a reasonable period after his constructive dismissal”. 8

The Board looked to the purpose of allowing a reasonable time to consider the impact of the change, namely, to assess whether they would accept it or sue. In this case, the Board concluded that by November 28, “more than ample tome and opportunity to assess his situation” had been allowed. The claim was dismissed.

A 2016 OLRB decision found that three months after the revisions had been effected was too late. 9 Further, her letter of “resignation” referenced “exhaustion”, “pain”, and “recent changes in [the] organization”, without mentioning a concern about the extent to which she did or did not execute pastry chef duties. A similar ESA claim was dismissed as the employee had waited three months to take action. This was, however, obiter, as there was found to be immediate acceptance. 10 Five months was seen as too late to meet the test of a reasonable time period in a 11 This decision was obiter as the OLRB found that the decision to cease employment was not based on the revised terms, which also were found to be not actionable.