Do I Have to Accept a Demotion to Keep My Job in Ontario?
After a dismissal or a demotion, employers sometimes offer you a lesser role and argue you must take it. Whether you have to depends on whether a reasonable person would accept it.
Key takeaways
- A serious demotion can itself be a constructive dismissal.
- But you can be expected to mitigate by accepting some continued work.
- The test is whether a reasonable person would accept the offer.
- You do not have to stay where there is hostility, humiliation, or embarrassment.
- Getting it wrong can reduce your severance, so advice matters.
In this article
It is a confusing situation. Your employer demotes you, or fires you and then offers you a lesser job to stay on, and tells you that if you refuse, you get nothing. Do you have to accept it? In Ontario, the answer is a careful maybe, and getting it right matters, because refusing when you should have stayed can cut your severance, while staying in a humiliating role can be a mistake too. Here is how the law actually treats it.
✅Quick answer. A serious demotion can be a constructive dismissal in itself. But once dismissed, you have a duty to mitigate, and the Supreme Court in Evans v Teamsters (2008) held that mitigation can sometimes require returning to work for the same employer, but only where a reasonable person would accept the offer. You are not required to stay where the situation involves acrimony, hostility, humiliation, or embarrassment, or where the new role is a significant demotion. So whether you must accept turns on the specific circumstances.
A demotion can be a dismissal
First, the demotion itself. A significant, unilateral demotion, a real drop in responsibilities, status, or pay, can be a constructive dismissal, because it fundamentally changes a core term of your employment. That means you may be entitled to treat it as a termination and claim severance, rather than simply accepting the lesser role as your new normal.
But you still have to mitigate
Here is the tension. Once you are dismissed, constructively or otherwise, you have a duty to take reasonable steps to reduce your losses, usually by looking for comparable work. In Evans v Teamsters, the Supreme Court said this can, in some cases, include accepting an offer to keep working for the very employer that dismissed you. The idea is that if a reasonable person in your shoes would take the continued work, refusing it can reduce what you are owed.
The limits that protect you
The duty to return is not unlimited. You are not required to accept continued work where:
- The relationship involves acrimony, hostility, or a loss of trust that would make returning unreasonable.
- Staying would be humiliating or embarrassing, for example a public demotion in front of people you used to manage.
- The offered role is a significant demotion in status, responsibility, or pay.
- A reasonable person in your position simply would not accept the arrangement.
What should you do if you are offered a lesser role?
- 1.Do not resign or refuse on the spot; both quitting and refusing carry consequences.
- 2.Assess honestly whether the atmosphere is hostile or humiliating, or whether it is workable.
- 3.Consider the size of the demotion in pay, status, and responsibility.
- 4.Get advice before you decide, because the choice directly affects your severance.
This is one of the trickiest spots in employment law, because the right move depends on the details. See constructive dismissal from a pay or hours cut and changes to your job duties, and before you accept or refuse anything, get a severance review. For the bigger picture, see severance pay in Ontario.
Frequently asked questions
Do I have to accept a demotion to keep my job in Ontario?
Sometimes. A serious demotion can be a constructive dismissal, but you also have a duty to mitigate, which can include accepting continued work where a reasonable person would. You do not have to stay where there is hostility, humiliation, or a significant demotion.
What did Evans v Teamsters decide?
The Supreme Court held in 2008 that mitigation can require a dismissed employee to accept an offer to keep working for the same employer, but only where a reasonable person would accept it, and not where the situation involves acrimony, humiliation, or embarrassment.
Can refusing a lesser role reduce my severance?
Yes, potentially. If a reasonable person would have accepted the continued work and you refused, a court can reduce your damages for failing to mitigate. That is why you should get advice before refusing.
Is a demotion always a constructive dismissal?
Not always. A significant, unilateral demotion in status, responsibility, or pay usually can be, but a minor change may not be. Whether it is, and whether you must accept an alternative role, depends on the specific circumstances.
Daniel Carter
Legal Writer, Mirza Law
Daniel Carter is a legal writer at Mirza Law in Toronto. He writes about layoffs, employment contracts, and the steps to take before you sign anything from your employer.
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