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Turn and face the strange – with reasonable notice

Big changes in the workplace aren’t easy, but can happen with proper notice to employees
Employment law
An Ontario dentist’s office decided to transition employees to written employment contracts. REUTERS/Alkis Konstantinidis

By Jeffrey R. Smith

Change in the workplace is often not easy to bring about. There are many reasons employers can implement changes — whether it be new workplace policies, business practices, or staffing structure — and obstacles can include financial costs, figuring out how to go about it, and employee resistance.

When companies face the latter, it can make things messier, especially if the changes significantly affect people’s jobs. That’s when they have to be careful to avoid the quagmire of constructive dismissal.

Employers obviously have the right to run their businesses as they see fit. However, given the power imbalance between employers and employees recognized in employment law, employees have a certain level of protection that prevents employers from making major changes that affect workers on a whim when workers have little choice in the matter.

If employers make abrupt, fundamental changes to employees’ job duties, compensation, or other key elements of their jobs, then they could be dinged with constructive dismissal complaints.

Constructive dismissal happens when key aspects of job are changed without the employee’s consent and little to no notice, essentially ending the type of employment in which the worker was employed. The worker can choose to accept the changes, but if she’s reluctant or disagrees with the changes, she may feel she has no choice but to leave. In such circumstances, even though the worker is the one who left, she is considered to be forced out — the employer has “constructed” the dismissal of the employee, even if it’s not an outright firing.

However, as mentioned above, employers do have a right to run their businesses as they like. They can make major changes — they just can’t foist them on employees with no notice. It has been established in jurisprudence that employers can make major, fundamental changes to jobs, as long as the employees in those jobs receive reasonable notice of those changes.

The notice period for these changes is similar in purpose to the reasonable notice period for termination of employment — to provide the employee with sufficient time to decide if he wants to remain working with the changes in effect, or to search for alternate employment if he wants to leave instead. The employee is protected from having to make the choice of putting up with the changes “or else.”

But when does the notice come into effect? What happens when employees are encouraged to agree to changes sooner than the notice period is elapsed?

This happened to an Ontario dentist’s office when it decided to transition employees to written employment contracts. The new employment contract for a hygienist involved a change to the way her vacation pay was calculated — though still meeting employment standards requirements. The change would result in less vacation pay, though her pay rate would remain the same — along with a termination clause limiting termination pay to employment standards minimums.

The hygienist — who had been employed at the office for 17 years — was given a deadline to sign the new contract 17 months in the future. If she chose not to sign, her employment would be terminated one month after the deadline, in 18 months’ time. However, the hygienist was encouraged to decide sooner with an offer of a $2,000 bonus if she signed the new contract within the next five weeks. Once she signed, the terms of the new contract would be in effect immediately. The worker signed the contract two days after it was presented to her.

However, over the next year, the worker became unhappy with the vacation pay formula and the fact that she had to repay some of the difference from the previous year. She resigned her position and filed an action, claiming that because the new contract came into effect as soon as she signed it, she wasn’t given the full reasonable notice period. She also said the signing bonus wasn’t sufficient consideration to offset the vacation pay changes.

A court disagreed, finding that even though the worker chose to sign the contract in two days, she could have taken 17 months to decide — which counted as sufficient notice of the changes to her employment. Also, the signing bonus was irrelevant, as no consideration was necessary because the employer provided sufficient notice, which gave the worker ample opportunity to decide if she wanted to work under the new contract terms or leave and search for a different job: See Lancia v. Park Dentistry, 2018 CarswellOnt 1791 (Ont. S.C.J.).

Employers must be careful when making major changes, but as long as proper notice is given to employees affected, they should be able to proceed with those changes — they might just have to wait a little while, especially for employees with lengthy service. However, if an employee formally accepts those changes and agrees to them within a short time — as in the case above — then the notice is no longer needed. And that’s something that may help bringing about workplace changes a little easier.

© Copyright Canadian HR Reporter, HAB Press. All rights reserved.

Jeffrey R. Smith

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective.
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