Introduction
In Lifemark Health Corp. v. Makram Guirguis (2026 CanLII 25109), the Ontario Labour Relations Board considered two important issues in constructive dismissal cases: (i) what changes are serious enough to amount to constructive dismissal; and (ii) how quickly an employee must resign in response. The Board accepted that the employee had been constructively dismissed, but it still allowed the employer’s application because the resignation came too late.
The decision is a useful reminder that resigning is a significant step and should not be taken lightly. It also shows that delay can be fatal to a constructive dismissal claim if an adjudicator concludes that the employee waited an unreasonable amount of time after the employer’s unilateral change.
Background Facts
Mr. Guirguis began working as a physiotherapist in 2011. After Lifemark acquired the Cedarview Clinic in Ottawa in 2016, he continued working there. In 2020, he became Clinic Director, a role that included both patient care and leadership responsibilities such as hiring, scheduling, performance management, payroll approval, and oversight of the clinic’s financial viability.
In October 2021, Lifemark confirmed in writing that Mr. Guirguis would receive a Clinic Director monthly bonus and compensation for clinic management. This supported the Board’s conclusion that the Clinic Director role was part of the employment relationship, not merely an informal title.
In March 2024, Lifemark decided to close the Cedarview Clinic and relocate Mr. Guirguis to the Strandherd Clinic, about five kilometres away. The Change Notice stated that he would move as a full-time physiotherapist and that his current caseload would transfer with him. It also said that all other terms and conditions of employment would remain the same, except for the work location and title.
Mr. Guirguis questioned the change, met with management and human resources, and was told there were no Clinic Director vacancies in Ottawa. He then went on medical leave on March 25, 2024. On June 5, 2024, he told Lifemark in writing that he was not resigning. He later resigned on June 30, 2024, effective June 28, 2024.
Legal Issue
The Board had to decide:
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Whether Lifemark’s unilateral changes amounted to a constructive dismissal.
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Whether Mr. Guirguis resigned in response to that constructive dismissal within a reasonable period.
Analysis
Constructive Dismissal
The Board applied the constructive dismissal framework from the decision of the Supreme Court of Canada Potter v. New Brunswick Legal Aid Services Commission (2015 SCC 10). Under that framework, an employee bears the burden of showing that the employer’s conduct amounted to a constructive dismissal, often through a unilateral and substantial change to compensation, duties, or place of work, with the two branches of constructive dismissal set out in Potter:
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“[31] The burden rests on the employee to establish that he or she has been constructively dismissed…the purpose of the inquiry is to determine whether the employer’s act evinced an intention no longer to be bound by the contract.
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[32] …There are two branches of the test that have emerged. Most often, the court must first identify an express or implied contract term that has been breached, and then determine whether that breach was sufficiently serious to constitute constructive dismissal…Typically, the breach in question involves changes to the employee’s compensation, work assignments or place of work that are both unilateral and substantial…
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[33] However, an employer’s conduct will also constitute constructive dismissal [under the second branch of the test] if it more generally shows that the employer intended not to be bound by the contract. In applying Farber, courts have held that an employee can be found to have been constructively dismissed without identifying a specific term that was breached if the employer’s treatment of the employee made continued employment intolerable…This approach is necessarily retrospective, as it requires consideration of the cumulative effect of past acts by the employer and the determination of whether those acts evinced an intention no longer to be bound by the contract.”
On the first issue, the Board found that removing Mr. Guirguis from the Clinic Director role was a constructive dismissal. The Board emphasized that his leadership duties were a meaningful part of the job and were reflected in the 2021 pay letter. It also accepted that the Strandherd Clinic was less suitable for his patients, including because it had less space, a smaller gym, and less private treatment space. The Board concluded that these changes, taken together, were substantial enough to amount to constructive dismissal.
But that was not the end of the analysis. The Employment Standards Act, 2000 (the “ESA”) requires more than a constructive dismissal alone.
Crucially, for termination and severance entitlements to arise in this context, the employee must also resign in response to the constructive dismissal within a reasonable period.
The Resignation
That timing issue was where Mr. Guirguis’ claim failed. The Board found that the Change Notice made the new arrangement clear on March 12, 2024, and that Lifemark did not negotiate or alter the terms. By late May, Lifemark had also clearly stated that no termination package would be offered if he chose not to continue. The Board accepted that Mr. Guirguis was on medical leave, but found that the medical evidence did not show he was unable to decide whether to accept the new position or resign. In fact, he was able to make other informed decisions during that period, including confirming that he would not move outside Ottawa and incorporating a professional corporation.
Importantly, on June 5, 2024, Mr. Guirguis expressly told Lifemark that he was not resigning. The Board treated that as an informed decision made with full knowledge of the employer’s position. When he later resigned on June 30, 2024, the Board held that too much time had passed. On that basis, the constructive dismissal claim failed for purposes of termination and severance pay under the ESA.
Resignations are a big step and must be approached cautiously, but delay can matter just as much as the underlying workplace change. Even where an employee can establish constructive dismissal, an adjudicator may still deny relief if the resignation does not follow within a reasonable period.
Key Takeaway
The decision is an important reminder that a unilateral change to a fundamental term of employment may trigger a constructive dismissal, which could leave the employee owed termination entitlements (i.e. severance), but timing matters. If the employee waits too long, especially after the employer’s position has been clarified, this delay may undermine the claim in a wrongful dismissal or employment standards complaint scenario.
If your organization is dealing with a workplace restructuring, relocation, or a potential constructive dismissal issue, legal advice early in the process can make a significant difference. Employees facing a major unilateral change should also seek advice before deciding whether to resign.
For guidance on constructive dismissal, wrongful dismissal, resignation, or termination and severance obligations under Ontario employment law, contact Pearsall Marshall Law Firm.
For further reading on wrongful dismissal and severance, see Short Service Can Lead to Substantial Severance by Michael Di Risio and Timmins v. Artisan Cells: Withholding Contractual Severance in Exchange for a Release Can Repudiate an Employment Agreement by Michael Wills.