Can Changing an Employee’s Role Lead to a Lawsuit?
Changes happen often within organizations, for a variety of reasons. However, a recent case from British Columbia highlights the risks employers face in unilaterally changing the terms of employment, particularly for long service employees who are returning from leave. Such changes can risk a finding of constructive dismissal and even extra damages for bad faith, as the Defendant found in Nunez-Shular v Osoyoos Indian Band, 2025 BCSC 491
What is Constructive Dismissal?
Constructive dismissal occurs when an employer, by their actions, fundamentally breaches the employment contract, typically by unilaterally changing a fundamental term or condition of employment. This can often lead to the employee being forced to resign, but unlike a straightforward resignation, where the employee voluntarily and clearly ends the employment relationship, constructive dismissal is treated as if the employer has effectively terminated the employee, entitling the employee to severance or damages as if they were dismissed without cause.
In Nunez, the employee returned from medical leave to find her role, workspace, and reporting structure had significantly changed. Most notably, while she was on leave, her position as tax administrator was filled by a trainee, who was formally appointed to the role by Band Council Resolution. Upon her return, she was effectively removed from her original position and replaced.
The court found this to be a clear breach of a fundamental term of her employment contract: her right to her specific role as tax administrator. This unilateral action by the employer was sufficiently serious to constitute constructive dismissal. The court awarded her 24 months’ notice in damages, reflecting her age, tenure, and specialized role.
The court also awarded the employee $50,000.00 in damages for the employer’s bad faith conduct, which went beyond merely changing her job. The court found that the employer had also failed to treat the employee with honesty and candour, notably by not informing her that she had been replaced by a trainee and subjecting her to a humiliating and stressful environment.
This case demonstrates that while constructive dismissal can result from changes regardless of the reason for them, it can often form the basis for additional damages if the employer does not handle these changes with honest and good faith.
How can Whitten and Lublin help?
Constructive dismissals can result from a number of different changes. These changes can often be difficult to assess, and both employees and employers need to know how to navigate them carefully and strategically. If you are an employee who is facing a significant change at work, Whitten and Lublin is here to assist you. Contact us online or by phone at (416) 640-2667.
Author – Aaron Zaltzman