Wrongful Dismissal vs. Constructive Dismissal in Alberta: Understanding the Difference
Losing employment is never easy, and understanding your legal rights in the aftermath can be daunting. In Alberta, two of the most frequently encountered employment law issues are wrongful dismissal and constructive dismissal. While these terms are often used interchangeably, they refer to distinct legal concepts. Recognizing the difference between them is crucial, as it directly impacts the steps an employee should take and the compensation to which they may be entitled.
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What Is Wrongful Dismissal in Alberta?
Wrongful dismissal happens when an employer terminates an employee without providing reasonable notice or pay in lieu of notice. In most cases, the dispute is not about whether the employer had the legal right to end the employment relationship. The issue is whether the employer met the legal requirement to provide adequate notice or severance.
Examples of wrongful dismissal in Alberta include:
• Termination without any notice or severance.
• Being dismissed for vague reasons such as “not a good fit” without warnings or performance management.
• Misclassification as an independent contractor to avoid termination obligations.
• Retaliation for exercising legal rights, such as filing an employment standards complaint.
It is important to note that employers in Alberta almost always have the right to end an employment relationship. What makes a dismissal “wrongful” is when they fail to provide the employee with the notice, severance, or entitlements required under the Employment Standards Code or under common law.
Key point: In wrongful dismissal, the employment relationship ends directly because of the employer’s decision. The dismissal itself may be legal, but the way it was carried out did not comply with Alberta’s legal standards.
What Is Constructive Dismissal in Alberta?
Constructive dismissal differs from a standard termination. It arises when an employer does not formally dismiss the employee but instead makes unilateral and substantial changes to the fundamental terms or conditions of employment without the employee’s consent. Such changes may be so significant that a reasonable person in the employee’s position would feel compelled to resign.
Examples of constructive dismissal include:
• A major reduction in salary or hours.
• Significant changes to job duties or responsibilities.
• Forcing relocation to a distant workplace.
• Creating or tolerating a hostile, toxic, or intolerable work environment.
In these cases, the law treats the resignation as a dismissal because the employer’s conduct effectively forced the employee to leave their position within the company. Alberta courts have consistently held that an employee is entitled to consider themselves dismissed when their employer makes unilateral and substantial changes that undermine the original employment contract.
Key point: In constructive dismissal, the employee technically resigns, but legally it is treated as if the employer wrongfully terminated the employment.
How Wrongful Dismissal and Constructive Dismissal Overlap
Although wrongful dismissal and constructive dismissal arise in different ways, the legal consequences often overlap. In both situations, the employer has failed to respect the employee’s contractual rights and obligations. In both situations, the employee may be entitled to compensation.
For example, if an employer reduces an employee’s salary by 40 percent without consent, the employee may resign and claim constructive dismissal. The remedies available to them will look very similar to what they would have received if they had been directly terminated without notice or severance.
Remedies Available in Both Situations
Whether you have been wrongfully dismissed or constructively dismissed, Alberta law provides similar remedies to help you recover. You may be entitled to:
• Reasonable notice pay or severance, often much more than the minimum standards set out in the Alberta Employment Standards Code.
• Compensation for lost wages and benefits during the notice period.
• Additional remedies if your dismissal involved discrimination, harassment, or retaliation under the Alberta Human Rights Act.
The amount of compensation depends on several factors, including the length of service, the nature of the position, the availability of similar employment, and the specific circumstances of the dismissal.
Why Timing Matters
Employees in Alberta need to act quickly if they suspect wrongful or constructive dismissal. Certain claims have strict deadlines. Human rights complaints, for example, must be filed within one year. Constructive dismissal claims also require prompt action, because if you continue working under the new conditions for too long, an employer may argue that you accepted the changes.
Delaying legal advice can reduce your options and may weaken your case. The sooner you consult an employment lawyer, the more likely you are to protect your rights and secure the compensation you deserve.
Misconceptions About Wrongful and Constructive Dismissal
Many employees in Alberta have misconceptions about what counts as wrongful or constructive dismissal. Here are some common misunderstandings:
“My employer gave me the minimum notice under the Employment Standards Code, so that must be enough.”
Not necessarily. The Code sets minimum standards, but Alberta courts often award much more under common law. Your rights are subject on the terms of your employment contract.
“If I resign, I cannot make any legal claims.”
If your resignation was forced because of a significant change in your job or a toxic work environment, it may count as constructive dismissal, and you may still have a claim.
“If I was partly at fault, I have no rights.”
Minor mistakes or performance issues do not amount to just cause for dismissal. Employers still need to provide reasonable notice or severance unless there was serious misconduct such as theft or violence.
“I can just wait to deal with it later.”
Waiting too long can cause you to miss important legal deadlines and may weaken your ability to argue that you were constructively dismissed.
What to Do If You Suspect Wrongful or Constructive Dismissal in Alberta
If you think you may have been wrongfully or constructively dismissed, take these steps:
1. Document everything. Keep copies of your employment contract, termination letter, pay stubs, emails, texts, and notes about what happened.
2. Do not sign anything. Severance offers often undervalue what you are entitled to.
3. Seek legal advice quickly. Each case is highly fact specific. An employment lawyer can determine whether you have been wrongfully or constructively dismissed and help you pursue fair compensation.
How OP Employment Lawyers in Calgary Can Help
At OP Lawyers, our experienced employment law team has extensive experience handling both wrongful dismissal and constructive dismissal cases in Alberta. We provide employees with clarity, strategy, and strong advocacy at every stage.
Here is how we can help you:
• Review your termination or severance package to ensure it is fair under Alberta law and common law.
• Advise you on whether your situation qualifies as constructive dismissal.
• Negotiate with your employer to secure the best possible settlement.
• Represent you before the Alberta Human Rights Commission or in court if your case involves discrimination or retaliation.
• Provide compassionate guidance to help you navigate the stress and uncertainty of job loss.
Our goal is to protect your rights, maximize your entitlements, and help you move forward with confidence.
Conclusion: Know Your Rights
While wrongful dismissal and constructive dismissal are different legal concepts, both situations can leave you without the pay, benefits, and the dignity that you deserve. Alberta’s employment laws are designed to protect employees from unfair treatment, but those protections are only effective if you take action.
If you believe you have been wrongfully or constructively dismissed, contact OP Lawyers today. Our Calgary employment law team can review your situation, explain your options, and help you decide on the best path forward.
Disclaimer: This blog post is intended for informational purposes only and does not constitute legal advice. For advice specific to your circumstances, please consult a qualified employment lawyer at OP Lawyers or another legal professional.