Hidden benefits of job evaluation and job analysis

Exclusive to Canadian HR Reporter from Rudner Law.

Imagine this scenario:

• An employee alleges that their job has been changed so dramatically that it is a constructive dismissal.
• You ask their manager to give you a summary of their current tasks.
• At the same time, you check their file to find their job description, only to find that it is from 1994 and clearly not an accurate reflection of the current role.

From a human resources perspective, job evaluation and job analysis are valuable exercises  in cost and compensation control. These may assist in limiting turnover, which is beneficial for the company both for stability in its operations and for avoiding the cost of replacing a departed employee.

From an employment law perspective, they can have additional benefits, such as in defending against a constructive dismissal claim, or avoiding a claim that there has been a change of substratum. Both of these can result in a company saving money and maintaining its stability.

Constructive dismissal and job descriptions

A constructive dismissal occurs where an employer makes a substantial change or changes to the fundamental terms and conditions of an individual’s employment. Among other things, this can be a change to the employee's compensation, location/hours of work, or duties. Where this occurs, the employee may take the position that the employer has terminated their employment and seek their entitlement to reasonable notice at common law.

Constructive dismissal can happen where the employee's position has changed, either gradually over time or with the imposition or removal of duties, so that the employee is no longer doing the job they were hired to do.

When an employer is faced with a constructive dismissal claim due to a change in duties, it has to prepare a defence to this claim. Often, this involves comparing the employee's current duties to those set out in the job description.

This can be difficult if the employee's position has not been reviewed in some time and the employer has to effectively start from scratch to determine what the employee's duties were when they claimed constructive dismissal. In some cases, a position has evolved substantially, but the job description was never updated.

Regular job evaluation and job analysis can mean that the employer has an up-to-date job description for each role. This can assist by allowing the employer to defend against the employee's claim of constructive dismissal due to an alleged change in duties by demonstrating that the results of a recent job evaluation did not show any significant deviation from the employee's original job description.

This is not necessarily a complete defence to constructive dismissal, but places the employer in a better position than starting from nothing.

Change of substratum and contracts

The “change of substratum” doctrine essentially means that the factual underpinnings of an employment contract have changed so significantly since it was signed, it would not make sense for the contract itself to remain in force. The “classic” example is the person hired to work in a low-level job who makes their way up the corporate ladder to the C-suite; should their original contract still apply?

This will become material where an employee has been dismissed and the employer attempts to rely on an otherwise enforceable employment agreement to limit the employee's dismissal entitlements. If the employee can demonstrate that the underlying terms of their employment (such as their job duties) have changed to the extent that they are no longer doing the job they were hired to do, then they may assert that the employment agreement they executed at the start of their employment is no longer relevant.

If the agreement is set aside, it can potentially mean a difference between the employee being entitled to eight weeks of notice or pay in lieu of notice or 24 months of notice or pay in lieu of notice.

Periodic job evaluation and job analysis can also allow an employer to identify changed substratum situations before they become an issue, by identifying where there is a clear disparity between the employee's current duties and their job description. The employer can then bring the role into alignment with the employee's job description or revise the employee's job description to bring it into alignment with the employee's duties. Revising the employee's job description may also require the preparation of a new employment agreement to be presented to the employee.

As with constructive dismissal, a recently completed job evaluation and job analysis and updated job description can assist an employer in defending against a claim that the substratum of an employment relationship has changed.

Takeaways for HR

Many companies do not carry out periodic job evaluations or job analyses and instead do these on a limited and ad hoc basis as new jobs are added. However, carrying this out on all or part of an organization’s positions can have immediate and long-term benefits.

An employer can identify positions that are over or under compensated within its operations and normalize compensation. This needs to be a longer-term task: reducing an employee's compensation due to an issue identified in a job evaluation can result in a claim of constructive dismissal. This can assist in pricing the role for new hires or red circling an existing employee.

This can also assist with managing personnel and litigation expenses. A case that is easier to defend is also likely to be cheaper from the perspective of the legal expenses associated with it. Being prepared with an updated job description can assist in defending against a claim of constructive dismissal or an assertion of a change of substratum. While nothing can provide a guaranteed win, being aware of what your employees are doing puts the employer ahead.

Geoffrey Lowe is an associate lawyer at Rudner Law in Toronto. He can be reached at (416) 864-8500 or [email protected].