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ARTICLE · 18 APRIL 2017

When Breach Of Contract By An Employer Does Not Equal Constructive Dismissal

Norton Rose Fulbright Canada LLP
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The Ontario Court of Appeal recently gave employees and employers a valuable reminder: a breach of an employment contract does not, in and of itself, constitute a constructive dismissal. Even if the breach translates into hundreds of thousands of dollars not being paid.

CanadaEmployment and HR
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The Ontario Court of Appeal recently gave employees and employers a valuable reminder: a breach of an employment contract does not, in and of itself, constitute a constructive dismissal. Even if the breach translates into hundreds of thousands of dollars not being paid.

In Chapman v GPM Investment Management, the former CEO and president of GPM, a real estate management company, claimed he had been constructively dismissed by GPM after GPM failed to pay him his entire bonus.

The employment contract stated that the employee was to be paid a percentage of GPM's pre-tax profit as a bonus. When calculating the employee's bonus, GPM decided to exclude the profit it had earned on the sale of a certain property. The employee disputed this calculation, which had reduced his bonus by $329,687.

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