My employer has reduced my pay. What should I do?
In Ontario, an employer may unilaterally reduce or cut an employee’s pay for any reason. However, there are significant risks with actions by an employer that reduce an employee’s pay unilaterally, especially if those changes to pay are not part of the employment agreement because it may trigger a constructive dismissal claim by the employee. The unilateral pay reduction by the employer may also violate Ontario’s Employment Standards Act, 2000.
What is constructive dismissal?
Constructive dismissal occurs when an employee’s fundamental terms of employment are changed unilaterally by the employer. Generally, the terms of employment should be key components of the employment agreement between the employer and employee. Changes to the terms of employment that are small or not significant will not trigger constructive dismissal. For example, an employer may reduce an employee’s pay or wages by a minor amount without necessarily risking a constructive dismissal claim by the employee. This reduction applies equally to an employee’s wages, salary commissions or even a bonus. However, if the reduction is significant, then it could trigger a claim of constructive dismissal.
What can happen after an employee claims constructive dismissal?
Once the claim for constructive dismissal has been made, the employee will then generally claim both common law and statutory damages for their termination. Further, and depending on the circumstances, the employee may also be entitled to punitive and / or general damages as well.
What should you do if your boss cuts your pay?
If your boss cuts your pay, you need to contact Zeilikman Law. To be clear, you do not need to accept any pay reduction that your boss wants to implement. Do not sign any document that reduces your rights or agree to anything with your employer related to accepting any pay reduction until you get legal advice.
The employment lawyers at Zeilikman Law can help you assess the situation with your employer to see if you have a possible claim for constructive dismissal relating to a reduction in pay. And, if a claim for constructive dismissal is possible, then the employment lawyer can assist you to maximize your claim. The lawyer can also help you determine what the next best course of action should be in that situation. Should you advise the employer that you are not accepting the reduction in pay? Should you object to the reduction in writing? Should you remove yourself from employment? Should you quit? Should you retain a lawyer? The lawyers at Zeilikman Law know what to do in situations when an employee is experiencing a constructive dismissal. It is crucial that you contact Zeilikman Law as soon as possible.
For a deeper understanding of your rights, we invite you to read our foundational guide on what you need to know about constructive dismissal. It’s also important to understand the related issue of whether your employer can make changes to your job without your consent.
