Managing legal risks of shifting staff between part-time and full-time

Behind Canada’s headline job gains, a quieter shift is underway: more people are working part time. Statistics Canada reported that employment growth in November was driven by a rise in part-time jobs of 63,000 positions, a 1.6% increase.

Over the past three months, part-time work has grown 2.7% (103,000 jobs) compared with a 0.5% gain (78,000 jobs) in full-time employment.

For employers, that mix of voluntary and involuntary part-time work could mean more conversations about changing hours and status – especially if moving part-time workers into full-time roles or cutting full-timers back to part-time.

Those shifts may look like simple staffing changes, but in law they can be treated as fundamental changes to the employment relationship — and carry constructive dismissal risk if not handled carefully.

To unpack the risks and best practices, employment lawyers Oliver Grant and Kevin Butler provided insights and tips for HR professionals.

Cutting hours and constructive dismissal

Both legal experts emphasize that reducing a full-time employee to part-time is rarely a routine change – it is usually a fundamental alteration of the contract that can amount to constructive dismissal in common law.

Grant — a lawyer at McInnes Cooper in Halifax practising in labour and employment, human rights, and occupational health and safety law — notes that when an employer unilaterally changes guaranteed full-time hours to part-time, courts are likely to see that as changing a core term of the agreement.

“That would be a big risk,” he says.

“If someone is entitled to full-time hours in their employment contract, or if they're hired and it was never set out, but they've always been working full-time hours, if you were to change the fundamental... terms, unilaterally, on their employment contract, you would be at significant risk for a constructive dismissal claim.”

Overall, employers need to have strategies in place to mitigate the damages or to mitigate the employee's claim if it's being unilaterally imposed on the employee, says Grant.

‘Fundamental’ change to job

Moving someone from full-time to part-time is risky because the worker can either accept this unilateral change to their employment or treat themselves as having been dismissed, says Butler — an associate at Tierney Stauffer in Ottawa practising in employment, business, construction and personal injury — “and then they’re entitled to whatever remedy is available to them under their contract of employment or under employment standards and/or the common law.”

And the presence of a general “We can change your hours” clause doesn’t cure the problem, he says.

“If you've got somebody who's full-time and you want to move them to part-time, it doesn't really matter what your contract says,” he says. “It's a fundamental change in their employment. I mean, even if your contract says, ‘We reserve the right to change your hours,’ regardless — it's a fundamental change in your employment contract that gives rise to constructive dismissal in common law.”

Butler mentions an employer who recently informed an employee they wanted to go from 37 or 38 hours down to just under 20, and to accept roughly half the salary. While the shift may be driven by funding or revenue constraints, that still opens the door to constructive dismissal claims.

However, Grant points out that not every employee will pursue a claim, especially if their tenure is short or the economics don’t justify litigation: “Practically speaking, it can be difficult for an employee, especially a short-tenured employee, to profitably run a constructive dismissal claim.”

Using notice to reduce constructive dismissal risk

If a full-time to part-time change is on the table, Grant says a key tool is proper notice of the change.

In Nova Scotia, for example, a rough common-law rule of thumb is about a month of notice per year of service, though that can vary, he says. In practice, an employer can give advance written notice that a conversion from full-time to part-time will occur after a defined period while the employee continues in their full-time role, he says.

“You can say, ‘Joe Smith, you've been working here for three years… in six months' time… we're converting you from a full-time employee to a part-time employee, but you remain on as a full-time employee for six months.’”

By the time that change takes effect, the individual wouldn't have any damages for constructive dismissal because they’ve been given adequate notice, says Grant.

“Now, of course, Joe can say, ‘I've been dismissed and I'm going to leave in six months' time,’ but there's no further owing to them.”

Another pathway is tying contractual changes to fresh consideration, such as a raise or bonus. Grant advises employers that “if you're going to make a change in a contract that is a fundamental term, it's a good idea to do it at a time where you're providing bonuses or raises… to avoid constructive dismissal.”

Written contracts recommended

Butler echoes this and goes further, stressing the need for consideration whenever a new contract is introduced around a status change.

“If you're introducing a contract, you've got to make sure that there's some legal consideration that is given to the employee, so the contract is binding and enforceable,” he says. “If you're moving from either way — from part-time to full-time or full-time to part-time — there should be a new contract that the employee is asked to sign.”

It’s always good to have a contract in every situation “because any ambiguity is going to be read in the employee's favour,” says Grant, who adds that a contract exists even when nothing is written down.

“If I said to you ‘I'll give you $20 to mow my lawn this weekend’ and you show up this weekend to mow my lawn, we had a contract that I would pay you $20. The reason you put it in writing is so it's not a ‘he said/she said’ when it comes to a dispute, and there's no ambiguity.”

Document clear consent

Even where a full-time employee is eager to step down into part-time hours — for example, approaching retirement — Grant cautions employers to capture that consent clearly.

“It’s going to be very important that you document this consent and obey it,” he says, adding that employers should “have them sign an agreement that this is full and valid consideration… because otherwise you're going to be at risk of a constructive dismissal claim.”

With such a claim, the onus is on the employer to show that they didn’t wrongfully dismiss the worker, says Grant.

“You’re going to need to have the documentation to show, ‘No, he did this willingly’… and this was not a unilateral change put on by the employer.”

Hidden risk of ‘creeping’ hours

Even without a formal change in title or contract, employers can slide into risk by slowly increasing a part-time employee’s hours until, in practice, they resemble a full-timer.

The real legal danger, Grant explains, is that the pattern of work can create an implied term of full-time employment. For example, if an employee is working about 20 hours per week to start, and that slowly moves up to 40 hours for a certain amount of time, then cutting the hours back to about 20 could go badly.

“The employee might say, ‘Yeah, but for the last couple of years, it's been 40. You can't just unilaterally [cut hours], this is constructive dismissal,’” he says.

“You have to really look at how you're treating the employee, because if you start to introduce new terms, even if it's not in writing, you can't take those back against the employee.”

If the employer has good documentation, they might be able to say this kind of change was contemplated in the contract, says Grant. But the courts typically “tend to be employee-leaning,” he says, so it’s a risk.

Don’t skip formalities in going full time

On the other side, both lawyers say switching someone from part-time to full-time is typically more straightforward — and less likely to trigger constructive dismissal — because the employee is usually gaining, not losing, hours and income.

“Generally, employees are excited to make this change because they want more work. It's seen as a sort of promotion,” says Grant.

That doesn’t mean employers can skip formalities, so it’s still important to document the particular rights and obligations under the contract to avoid issues down the road, he says, providing an example:

“If the employee says, ‘Oh, you said I'd be full-time hours, 9 to 5 every Monday through Friday at your retail store’ and you said, ‘Well, no, you'd have 40 hours a week, but it might be 12 to 7 Tuesdays and then you might be working on Saturday’… you want that in writing so you have that flexibility and so no dispute happens.”

The change in hours would be seen as consideration for the agreement, says Grant, who also notes that service should be continuous: “Obviously, your years of service would transfer over. So if you've worked three years part-time and two years full-time, you'd have five years of service.”