Can Your Employer Demote You or Cut Your Pay After Medical Leave?
In a recent case, an employer was ordered to pay more than $300,000 in damages after finding that she was constructively dismissed when her employer asked her to accept a demotion and a pay cut following her return from medical leave. In unilaterally reducing her compensation significantly and demoting her, the Court took note that the employer decreased her pay and demoted her as a condition of her continued employment with the company.
Can your employer change your job or pay without your consent?
In Ontario, while employers may make changes to an employee’s contract without an employee’s permission, a unilateral significant change to an employee’s contract may constitute a case for constructive dismissal. Constructive dismissal can occur when an employee makes a decision to resign from their position because the employee makes fundamental changes to the terms of their employment without their consent, or when an employer creates a hostile or toxic work environment. If an employer changes the terms of employment significantly, an employee may resign from their position and pursue their full severance pay through a wrongful dismissal claim. The amount of severance an employee may be entitled to is dependent on several factors, including an employee’s age, length of service, position, and compensation.
If an employer makes significant changes to an employee’s compensation or position, an employee may have a claim for constructive dismissal if they do not consent to those changes. An employee must be clear that they do not agree with those changes in order to strengthen a claim for constructive dismissal. If an employee waits too long before telling an employer that they do not agree with the changes, the employer may consider the employee’s inaction as acceptance of the changes. In the case referred above, the employee’s reduction in compensation and demotion, along with her clear refusal to accept the changes, strenghtened her claim for constructive dismissal due to the employer’s unilateral changes to her employment agreement.
How can Whitten & Lublin help?
If your employer is threatening to reduce your compensation significantly, threatens to demote you, or is threatening to make any other fundamental changes to your contract, you may have a claim for constructive dismissal. Contact us for further information regarding your entitlements online or by phone at (416)-640-2667
Author – Abby Leung