Pivot, pivot, pivot! Without constructive dismissal.

Nadia Zaman here with another Rudner law employment law update.

Today I’m going to talk about pivoting without constructive dismissal.

Do you remember that episode of Friends where Ross buys a new couch and instead of paying the delivery fee, he decides it would be a good idea to try and carry the couch up the stairs to his apartment by himself, and with the help of his friends Rachel and Chandler? Well spoiler alert, it was a bad idea. What ends up happening is that he screams “pivot pivot pivot!” as they try to maneuver the couch up the stairs, and thus the iconic reference was born, “pivot pivot pivot”. Now, obviously this was a bad idea, he was being penny wise and pound foolish. He should have paid the delivery fee and avoided the hassle altogether.

You might be wondering, now what does this have to do with constructive dismissal? Since the advent of the COVID-19 pandemic, “pivot” has been a buzzword in the business and HR worlds as organizations struggle to adapt to frequently changing realities. You might know that changing the employment relationship can constitute a constructive dismissal in certain circumstances, so how do you avoid that as an employer, and how do you pivot without constructive dismissal?

Before we get there, it’s important to briefly outline the concept of constructive dismissal. Constructive dismissal occurs where there is a substantial and unilateral change to a fundamental term or condition of the employment relationship; this includes but is not limited to changes to compensation, schedule, duties, work location, and so on. A constructive dismissal can occur even if an employee’s compensation does not decrease. It can occur if the employer fails to provide a healthy and safe work environment, including a failure to address harassment or bullying. The result is the same as an outright dismissal. That is, the employee will be entitled to damages as if they have been dismissed outright. Employers may also be exposed to additional liability if they were found to have engaged in bad faith conduct.

So, how do you make changes as an employer without attracting constructive dismissal claims? Remember that employment relationships are legal relationships, so you should use your contracts and policies strategically.

First of all, you should flex your discretion muscles. What this means is you have to make sure your contracts give you the flexibility to make the changes you need to make in order to effectively run your business. Include wording in the contract clearly giving the organization discretion to make changes and noting that it will not constitute a constructive dismissal. For example, we regularly work with employers to ensure they have strong contracts in place, giving them the flexibility to effectively manage their business while complying with the law, and reducing liability.

Second, get written consent for changes. If the employee agrees to the change then it is no longer unilateral change and thus not a constructive dismissal. Alternatively, give appropriate notice for changes. The appropriate notice would be equivalent to the notice required for termination. We regularly help both employers and employees through this process.

And finally, seek legal advice from an employment lawyer before doing anything that may have legal implications. If you’re an employee and you feel you’re being constructively dismissed or if you’re an employer faced with a constructive dismissal claim, or better yet wanting to learn more about how you can avoid such a claim in the first place, we can assist you.

As we always say, if you think you need an employment lawyer you probably do. So feel free to reach out to us, and we would be happy to assist you.

Thank you, that’s all for today.

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