Can I use ‘constructive dismissal’ and still get Employment Insurance benefits?

This blog was originally published in the Globe & Mail on June 21, 2020

Constructive dismissal can occur when an employer fundamentally changes the terms of employment, including by significantly reducing an employee’s hours of work or wages. This allows the employee to treat their employment as terminated, and to claim Employment Insurance and seek pay in lieu of notice of termination from the employer. EI or the Canada Emergency Response Benefit (CERB) is not available if an employee voluntarily quits, but remains available in constructive dismissal cases.

A new regulation passed by the province on May 29 disallows constructive dismissal claims under the Employment Standards Act for all COVID-19 related layoffs and reductions of hours of work or wages. This regulation would limit your ability to seek termination entitlements under the ESA. However, it would not prohibit a claim for EI/CERB or a common law constructive dismissal claim before the courts. Frustration of the employment contract would likely not apply or be advisable in your circumstances; asserting it could potentially lead to a termination without any compensation to you.

Most EI claims have been temporarily replaced by the CERB, which pays a maximum of $2,000 per month – some $300 less than the maximum EI. After six months of CERB, eligible workers can still apply for EI if needed. You can also collect CERB on top of your employment income, provided you are not earning more than $1,000 a month. If this applies to your situation, an option may be to continue working and to apply for CERB to supplement your decreased employment income.

The above is provided as general information only. Asserting constructive dismissal can be risky and may involve complex legal issues. Contact us today if you would like to consult with our lawyers on a constructive dismissal or other employment related issue.