Relocation and constructive dismissal

Asking an employee to move to another office
By Brian Johnston
|Canadian Employment Law Today|Last Updated: 07/06/2016

Question: When asking an employee to move to another office location, is there a risk of constructive dismissal? If so, what can an employer do to mitigate that risk in case a relocation is required?

Answer: There is risk of constructive dismissal any time an employer imposes a substantial change to the essential terms and conditions of the contract of employment without the employee’s consent. As a result, a required relocation may lead to a valid claim of constructive dismissal if found to be a fundamental breach. As with most things in employment law, this all depends on the circumstances of the particular case.

The leading case on constructive dismissal continues to be Farber c. Royal Trust Co., updated by the Supreme Court’s recent decision in Potter v. New Brunswick (Legal Aid Services Commission). Under Potter, a court’s analysis for constructive dismissal due to a relocation will consist of two questions. First, does the employer’s unilateral change breach an express or implied term of the contract? And second, if so, was it a substantial breach? According to Potter, “changes to the employee’s compensation, work assignments or place of work that are both unilateral and substantial” could constitute constructive dismissal under this analysis.