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ARTICLE · 17 NOVEMBER 2023

Constructive Dismissal And You Part 2: Reductions In Compensation

A question that both employers and employees commonly have is "what counts as constructive dismissal?"

CanadaEmployment and HR

A question that both employers and employees commonly have is "what counts as constructive dismissal?" As detailed in our previous blog post linked below, there are many types of unilateral changes that can result in a constructive dismissal: https://www.kswlawyers.ca/blog/constructive-dismissal-unexpected-consequences-of-changes-to-the-employment-relationship

One of the more common scenarios that we deal with however is where an employee has been constructively dismissed as a result of changes to their compensation. This is, of course, more obvious when an employer has reduced the employee's salary (unsurprisingly, this is usually constructive dismissal).

Where it gets murkier is in dealing with compensation structures such as commissions, performance-based bonuses, or similar arrangements where an employee's compensation can vary from month to month.

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