Constructive Dismissal: When Resignation Feels Like Termination

Employees leave their jobs for various reasons, from new opportunities to dissatisfaction with their current role.  In some cases, an employer’s conduct can effectively force an employee to resign, a scenario known as “constructive dismissal.”  This situation is legally significant because, in certain cases, the employer can be accountable as if it had terminated the employment relationship, even though the employee resigned.

A recent Employment Relations Authority case shows how constructive dismissal can occur even where an employer is acting within its rights to change the terms of employment.  In this case, a care worker faced disciplinary action for sharing the personal information of a client with outside agencies.  The same client had also complained of feeling unsafe while the employee was at her house.  The employer proposed to change the location of the employee’s work, stressing that this was not a punishment but a response to business needs.  This didn’t suit the employee, who wanted to continue providing care for the same client.  The employer found that there had been a relationship breakdown between the employee and the client.  The employee worked for a day at a new location, then resigned, saying she had “lost all passion” for her work.  There was evidence that in conversation, she said she “felt she was close to retirement so would like to resign, and didn’t want to continue at another house[.]” 

The employee raised a personal grievance, claiming the resignation wasn’t genuine.  The employer claimed that while it had moved the location of work, it was still in the same region, and was in line with its responsibility to provide a safe working environment. 

The employer also argued that the employee had agreed to the change, so it could not have caused her resignation.  However, the Authority thought that the employee had been “reasonable in vociferously holding her ground” prior to the change.   She had resigned after only a day of work at the new location.  The suggestion that the employee had simply chosen “retirement” was not supported by the facts.  The employee liked her job prior to the change, and the employer should not have relied on the employee saying she was “close to retirement,” which was, after all, a remark made over a cup of coffee.  The Authority thought a more formal follow-up was required.  

The Authority found that the change in location of work caused the resignation.  The Authority noted that the employer could change work schedules in accordance with the needs of the employee and the business, provided notice was given.  However, the employer could not rely on its business needs to justify the change, while also insisting that there had been a relationship breakdown between the employee and her client.  The Authority held that the employer had improperly used a contractual power to “bypass” the need to resolve the complaint.  The Authority awarded the employee lost wages, and compensation for humiliation, loss of dignity, and injury to the feelings of the employee.

In this case the employee’s resignation could be framed as constructive dismissal.  But each case is different.  If your employer has made a sudden and significant change to your employment, relying on unsubstantiated facts, consider contacting an employment lawyer, advocacy service, your union representative, or a local Community Law Centre.