Which of the following is an example of constructive dismissal involving compensation?

• A. A A significant reduction in compensation
• B. B A minor change to duties
• C. C A temporary layoff with pay
• D. D A friendly adjustment to benefits with consent

Answer: (A)

Constructive dismissal happens when an employer unilaterally changes a fundamental term of the employment contract, effectively forcing the employee to resign and treat it as a termination. Compensation is a core term, so a significant reduction in pay changes the essential economic deal of the job. That kind of unilateral pay cut signals the employer no longer honors the original contract, making it the clearest example of constructive dismissal involving compensation.

By contrast, a minor change to duties stays within the scope of the employee’s role, and a temporary layoff with pay, while disruptive, often preserves the employment relationship if it’s within agreed terms or a reasonable duration. A friendly adjustment to benefits with consent is voluntary and made with agreement, not a unilateral change. So it doesn’t amount to dismissal.