Reducing paid personal days

Replacing floating personal day with Family Day

Colin Gibson
Question: Our company currently offers two floating personal days to employees in addition to the regular statutory holidays. We are located in Ontario, which has just added a new statutory holiday in February. We are considering dropping one of the floating personal days. Do you see any issues with that?

Answer: If workers are contractually entitled to receive two floating personal days in addition to the statutory holidays required by the Ontario Employment Standards Act, 2000, there is a risk of constructive dismissal if one of the floating personal days is unilaterally dropped.

At common law, a constructive dismissal occurs where an employer unilaterally makes a fundamental change to an employee’s terms and conditions of employment without providing the employee with reasonable notice of the change. Where this happens, the employee may elect to treat the employer’s actions as a repudiation of the employment contract and commence an action for wrongful dismissal.

Constructive dismissal principles are also recognized in the employment standards legislation in most Canadian jurisdictions. In Ontario, for example, the act states an employer terminates the employment of an employee where it “constructively dismisses the employee and the employee resigns from his or her employment in response to that within a reasonable period.” Similarly, British Columbia’s Employment Standards Act provides that if a condition of employment is “substantially altered,” the director of employment standards may determine employment has been terminated.

In Farber c. Royal Trust, the Supreme Court of Canada said each constructive dismissal case must be decided on its own facts, since the specific features of each employment contract and each situation must be taken into account to determine whether the essential terms of the contract have been substantially changed.

In this situation, unilaterally taking away one of the employees’ two paid personal days might be considered sufficiently fundamental to give rise to a constructive dismissal. In order to eliminate this risk, your company may wish to consider providing the affected employees with reasonable advance notice of the change to their terms of employment. An effective communication plan should also be developed, in order to avoid potential damage to workplace morale.

For more information see:

Farber c. Royal Trust Co., 1996 CarswellQue 1158 (S.C.C.).

Colin G.M. Gibson is a partner with Harris & Company in Vancouver. He can be reached at cgibson@harrisco.com or (604) 891-2212.

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