Wrongful dismissal and constructive dismissal are closely connected, but they describe different issues. Wrongful dismissal concerns an employer’s failure to provide the notice or termination compensation an employee is legally owed. Constructive dismissal happens when an employer fundamentally breaches the employment relationship, allowing the employee to treat it as terminated—even without being formally fired.
An employee who has been constructively dismissed can pursue a wrongful dismissal claim. The first question is whether the employer’s actions effectively ended the employment relationship. The next is what compensation the employee should receive.
Whether you have received a termination letter or are facing major unwanted changes to your job, Samfiru Tumarkin LLP can help you understand your rights. Our employment lawyers represent non-unionized employees in Ontario, Alberta and British Columbia.
⚠️ Fired? Get advice before signing. Job changed? Get advice before resigning.
A severance release can prevent you from pursuing additional compensation. Resigning before confirming a constructive dismissal can also put your severance rights at risk. Have your situation reviewed before making a decision you cannot easily undo.
On This Page:
- 1. Key Differences
- 2. Practical Examples
- 3. Evidence You Need
- 4. Severance & Compensation
- 5. What to Do Next
- 6. Provincial & Federal Rules
- 7. Common Questions
What Is the Difference Between Wrongful Dismissal and Constructive Dismissal?
The simplest way to understand the difference is to separate how your employment ended from whether you received what you were owed.
| Question | Wrongful dismissal | Constructive dismissal |
|---|---|---|
| What is the main issue? | The employer did not provide the notice or compensation legally required when employment ended. | The employer’s conduct or major changes to the job fundamentally breached the employment relationship. |
| Were you formally fired? | Often, but not always. A wrongful dismissal claim can also follow a constructive dismissal. | Usually not. The law can treat the employer’s actions as a dismissal without a termination letter. |
| What commonly triggers the dispute? | An inadequate severance package or an unsupported allegation of just cause used to deny compensation. | A substantial unauthorized pay cut, demotion or other serious breach of the employment agreement. |
| What needs to be assessed? | Your entitlement, what you received, your contract and any reason the employer gives for withholding compensation. | Whether the employer’s actions amounted to a dismissal, how you responded and what termination compensation follows. |
| What should you do first? | Have the termination letter, contract and severance offer reviewed before accepting a settlement. | Get advice before resigning, accepting new terms or deciding how long to continue under the changed conditions. |
Can the same situation involve both?
Yes. If your employer constructively dismisses you and does not provide the compensation legally owed, you can pursue that compensation through a wrongful dismissal claim.
The Supreme Court of Canada confirmed the connection in Potter v. New Brunswick Legal Aid Services Commission: an employee who establishes constructive dismissal can be entitled to damages for wrongful dismissal.
For the broader rules behind each issue, see our guides to wrongful dismissal in Canada and constructive dismissal in Canada.
Wrongful Dismissal vs. Constructive Dismissal: Practical Examples
Example 1: Your job is eliminated, but the severance offer is too low
Your employer closes your department and gives you a termination letter. It offers only the employment standards minimum, even though you may have a greater entitlement under common law.
This raises a wrongful dismissal issue. The employer’s business reason for eliminating the job does not determine how much notice or compensation you should receive.
Example 2: Your employer imposes a major demotion and pay cut
You manage a team. Without your agreement, your employer removes your management responsibilities, assigns you a junior role and substantially reduces your pay.
This may be constructive dismissal. The key questions include whether the employer had the contractual right to make the changes and whether they fundamentally altered your employment. If constructive dismissal is established, you can pursue the termination compensation you are owed.
Our result: $54,000 after an employee was told to accept major changes or leave
An Alberta assistant manager was told to accept a demotion, reduced pay and a relocation. Her employer said that rejecting the changes would be treated as a resignation.
Samfiru Tumarkin LLP challenged that position and secured $54,000 through negotiations, without going to court.
The lesson: your employer calling something a “resignation” does not settle whether you have been constructively dismissed.
Example 3: You disagree with a performance review
You receive criticism you believe is unfair, but your employer has not fundamentally changed your job or otherwise seriously breached the employment relationship.
Disagreement or frustration alone does not establish constructive dismissal. Reasonable performance management is different from a substantial demotion, major pay cut or serious mistreatment. The surrounding facts matter.
What Evidence Do You Need for Each Claim?
After a direct firing, it is usually clear that the employer ended the employment. The dispute may centre on the amount owed, the contract or whether an allegation of just cause is valid.
A constructive dismissal claim has an additional question: did a dismissal occur at all? The employee must establish that the employer’s actions were serious enough to be treated as ending the employment relationship.
Useful records include:
- Your original employment terms: The contract, offer letter, job description, compensation plans and pay records.
- What changed: Written instructions, revised duties, pay reductions, new schedules and the dates changes were announced or implemented.
- How you responded: Emails, objections, requests for clarification and the employer’s replies.
- Evidence of workplace conduct: A dated account of incidents, relevant correspondence, complaints, responses and potential witnesses.
Preserve records you are entitled to keep. Do not take unrelated confidential business information or other employees’ personal records.
You do not need to choose the correct legal label before contacting us. Our team can review what happened and identify the claims your evidence may support.
Do Wrongful Dismissal and Constructive Dismissal Lead to Different Severance?
Not simply because one dismissal was direct and the other was constructive. Once constructive dismissal is established, compensation generally follows the same principles that apply to a wrongful dismissal claim after a direct termination.
Your employment contract and applicable law matter. For employees entitled to common-law notice, the assessment considers factors such as age, length of service, position and the availability of comparable work.
The calculation can include more than base salary, including applicable bonuses, commissions and benefits. Read our guide to severance pay in Canada for the full explanation.
Can you receive two severance packages?
No. Describing a dismissal as both constructive and wrongful does not create two payments for the same loss.
Separate issues, such as workplace discrimination or bad-faith conduct, may support additional compensation. Those claims depend on their own facts and legal requirements.
Do you need to look for another job?
Employees pursuing common-law wrongful dismissal damages are generally expected to make reasonable efforts to find comparable work. That obligation can also apply following a constructive dismissal.
Keep records of applications and interviews. Income from replacement work during the notice period can affect the damages owed. Learn more about the duty to mitigate.
For guidance on evaluating offers and resolving a claim, see our guide to wrongful dismissal settlements in Canada.
What Should You Do If You Were Fired or Your Job Was Changed?
If your employer has fired you
Keep your termination letter, severance offer, employment contract and compensation records. Have the offer reviewed before accepting a settlement or signing a release.
An employer’s deadline to accept an offer is not the legal deadline for pursuing your compensation. The offer itself may expire, so get advice promptly—but a short signing deadline does not eliminate your rights.
If your employer has made major changes to your job
Keep a written record of what has changed, when it takes effect and what your employer has asked you to accept. Get advice about how to respond before resigning or signing a revised agreement.
Your response can affect whether you are treated as having accepted the new arrangement. A lawyer can help you decide how to communicate your objection and whether continuing to work is appropriate while the situation is addressed.
⚠️ There is no universal “safe” waiting period.
Resigning too quickly can put your claim at risk. Continuing under changed terms can sometimes be treated as acceptance. Simply saying you are “working under protest” does not protect your rights indefinitely. Get advice on the timing and wording of your response.
Do the Rules Differ Across Canada?
This comparison explains the general common-law principles relevant to non-unionized employment. Your province, employment contract and whether your workplace is federally regulated affect the specific rights, procedures and deadlines that apply.
For guidance in the provinces where our employment lawyers practise, use the relevant resources below:
| Province | Wrongful dismissal | Constructive dismissal |
|---|---|---|
| Ontario | Wrongful dismissal in Ontario | Constructive dismissal in Ontario |
| Alberta | Wrongful dismissal in Alberta | Constructive dismissal in Alberta |
| British Columbia | Wrongful dismissal in BC | Constructive dismissal in BC |
Is unjust dismissal the same as wrongful dismissal?
No. Eligible employees in federally regulated workplaces can have access to a separate unjust dismissal complaint under the Canada Labour Code. This can also apply to constructive dismissal and may provide remedies beyond an ordinary wrongful dismissal claim, including reinstatement.
An eligible federal unjust dismissal complaint normally must be filed with the Labour Program within 90 days of dismissal. Do not assume every employment claim has a two-year deadline.
Read our guide to federally regulated employers in Canada and the official information about federal unjust dismissal complaints.
Unionized? Contact your union promptly. Workplace termination disputes generally need to be addressed through the grievance process. Samfiru Tumarkin LLP’s employment law team does not assist with unionized workplace disputes.
Wrongful Dismissal vs. Constructive Dismissal FAQs
Do you have to prove your employer intended to force you out?
No. Constructive dismissal does not always require proof that your employer was deliberately trying to make you quit. The focus is on the employer’s actions, the employment terms and whether the breach was serious enough to amount to a dismissal.
Is constructive dismissal harder to prove?
It can involve an additional dispute. After a direct firing, the fact that the employer ended the employment is usually clear. In a constructive dismissal claim, you must first establish why the employer’s actions should be treated as a dismissal.
A direct wrongful dismissal claim can still be contested—for example, when the employer alleges just cause or relies on a termination clause to limit compensation.
Can you claim constructive dismissal if you already resigned?
Potentially. A resignation does not automatically rule out a constructive dismissal claim. The reason you left, the employer’s conduct, the timing and your communications all matter.
Have the circumstances and resignation letter reviewed promptly. Do not assume the word “resignation” means you have no claim.
Does pursuing either claim mean going to court?
No. A majority of wrongful dismissal and constructive dismissal disputes are resolved through negotiation or mediation. A lawsuit may be necessary in some cases, but getting legal advice does not commit you to a trial.
Our team can assess the claim, handle discussions with your employer and explain any proposed resolution before you decide whether to accept it.
Fired or Forced Out? Find Out Where You Stand.
You do not need a termination letter to ask for help—and you do not need to work out the legal terminology on your own.
The employment lawyers at Samfiru Tumarkin LLP can review your contract, your employer’s actions and any severance offer. We can explain whether you have a claim, assess the compensation you may be owed and help you take the next step.
We help non-unionized employees across Ontario, Alberta and British Columbia.
Before you sign—or resign—check first.
➡️ Get Advice About Your Dismissal or call 1-855-821-5900.