Many have experienced a toxic work environment at some point in their careers, which can significantly impact other areas of a person’s life. A toxic work environment may involve employees experiencing discrimination, harassment, or unfair disciplinary procedures. These factors may cause an employee to leave their job if it becomes unbearable to remain in this situation. In some cases, a toxic work environment may amount to a constructive dismissal, which may require compensation from the employer. 

In this article, we will discuss the concept of constructive dismissal, including when it may occur in toxic work environments. We will examine a recent case, Laurie Pal v Dr. W. Khan and Dr. S. Vaid Dentistry Professional Corporation o/a Cataraqui Woods Dentistry, 2023 CanLII 56732 (ON LRB), in which the court found that an employee was constructively dismissed due to the toxic work environment created by the employer. We will also provide key insights for employees subject to constructive dismissal due to a toxic work environment and for employers seeking to avoid constructive dismissals or other claims that may arise, such as discrimination, harassment, etc. 

What is constructive dismissal?

Constructive dismissal typically occurs when an employer has changed the terms of the employment agreement that was initially agreed upon. The change is to be significant, meaning that something fundamental in the employee’s role has been altered. Also, the change must have been adopted without the employee’s permission. 

Another form of constructive dismissal is when a work environment has become toxic to a point at which an employee can objectively no longer continue working there. It can involve harassment, discrimination, violence, or subjecting the employee to unwarranted disciplinary procedures. 

The employee has the onus to prove that there was a toxic work environment to result in a constructive dismissal. The employee must prove facts that demonstrate that the employer acted in such a way that was fundamentally incompatible with continuing an employment relationship. This can include situations where an employer acted in such a way that breaches an implied term of every employment contract that an employee should be treated with respect and civility. 

In other words, a constructive dismissal due to a toxic work environment can occur where an employer’s behaviour is done to cause an employee to resign from their position effectively. This is an objective test. The employee must show that a reasonable person should not be expected to continue employment. 

This is not to say that employers cannot criticize their employees if their work is unsatisfactory. Generally, unpleasantness, rudeness, or misunderstanding of the facts would not be enough to establish a constructive dismissal due to a toxic work environment. 

However, at a certain point, an employer’s conduct may cross the line, and a reasonable person would not be expected to continue their employment, as it is intolerable. This would include situations where there is serious wrongful behaviour by the employer, including egregious stand-alone incidents or persistent wrongful behaviour. Constructive dismissal can also be determined even if the employee does not ultimately resign. 

Employee subject to bullying, disrespectful and verbally abusive behaviour from employer 

In a recent Ontario case, Laurie Pal v Dr. W. Khan and Dr. S. Vaid Dentistry Professional Corporation o/a Cataraqui Woods Dentistry, 2023 CanLII 56732 (ON LRB), the court found that there was constructive dismissal due to a toxic work environment created by the employer. 

The employee was a dental hygienist, and the employer was one of the dentists. 

The court found that the employer had managed his employees in a controlling and domineering way, including embarrassing them at staff meetings or harshly criticizing their work. However, there was no evidence that the employee was publicly embarrassed, and her work was monitored by another party who did not bully the employee. 

The employer also made rude comments about former employees and patients. However, the court found that these comments were not directed at the employee, and she did not raise them as an issue. After the comments were made, the employee also continued to work there for several years. 

The employer also discussed his support for Mr. Ghomeshi during his trial regarding sexual abuse. The employee did not raise this issue with the employer. The employer also made comments about Catholic schools and teachers, expressing that he thought there were many pedophiles in the Catholic Church and referred to the teachers are perverts. Despite knowing that her children attended a Catholic school, the employer commented to the employee. 

During the COVID-19 pandemic, the employer urged the employee to attend work as soon as possible. He had requested for her and other employees to avoid testing for COVID-19 and said that he considered this a form of disloyalty to him. When the employee took a test in June 2020, she was reprimanded during a meeting. Her work was also reassigned to other hygienists. When she resigned a few months later, the employer commented that if her mental health did not permit her to continue her employment here, she would not be able to work anywhere else as a hygienist. This meeting was upsetting to the employee. 

The court found that the employer’s comments about Catholic schools and teachers supported a finding of constructive dismissal for creating a toxic and unbearable work environment. The court considered that the employer knew that the employee’s children attended a Catholic school and that these comments were insulting and demeaning as they suggested that, as a parent, the employee was putting her children at risk of sexual abuse. 

The court found that the employer asking that the employees return as soon as possible was consistent with the policies of health authorities at the time, and this did not contribute to a toxic workplace. On the other hand, his insistence that employees not test for infectious diseases like COVID-19 when they may have been exposed was seriously inappropriate. In particular, dental hygienists are at a higher risk of infection as they work closely with the public. The employer’s pressure on the employee not to test would put her at risk and not allow her to protect herself, her family, and her patients. It is reasonable for her to take a test after potential exposure, as was the case here. Therefore, the work environment was considered toxic and unbearable as she was pressured to choose between her health and safety and her employer’s directions. 

Contact Haynes Law Firm in Toronto for Advice on Constructive Dismissal and Workplace Harassment Claims

Our experienced employment law legal team at Haynes Law Firm in Toronto can assist you with constructive dismissal or workplace harassment. In some situations, a toxic work environment may be considered a constructive dismissal if it becomes unbearable and intolerable for a reasonable person to continue working there. For employees, our goal is to ensure that they understand their rights and receive maximum compensation in constructive dismissal or workplace harassment cases. Haynes Law Firm also assists employers in avoiding liabilities that may arise from constructive dismissals and harassment claims. We are dedicated to finding the best resolution for you.

To book a consultation, please contact us online or by phone at 416-593-2731.