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Ed Canning - Changing the terms of someone's employment.

Making changes to someone’s terms of employment is always fraught with dangers for employers. Making those changes after persuading an employee to move their family is even more perilous.

Over a period of 20 years in the accounting department with her company, Bernice worked her way up to the position of Manager of Accounting and Supply Chain Finance for local operations. Then one day it was announced that the facilities in southwest Ontario where she worked were closing down. She was offered a position in Toronto as a senior manager in the Canadian accounting department.

Although it was a big move for her family, Bernice decided to accept the offer because it was an increase in salary and what appeared to be a genuine opportunity for career growth and professional advancement. It all looked good until a year later when the new company was merged with another company. Suddenly Bernice’s responsibility for payroll, a function she had supervised for more than a dozen years, was removed. She learned that without consultation with her, the payroll clerk who had reported to Bernice had been transferred. That was 20% of her job responsibilities gone. She complained by email about this significant change without consultation but the only response was the offer of a chat. A few weeks later she learned that a major project she had been leading, a big part of the reason she moved to Toronto, had been removed from her. Another 20% gone. Bernice would be helping on the project but would be reporting to her replacement.

When she complained again to her boss he asked that she keep focused and implied there would be better things in the future, he just didn’t know what they were.

Then she found out that while she was not losing responsibility for accounts payable, she would be partly reporting in that function to a manager at the same level as her rather than just a higher level which encompassed more prestige.

When she met soon after with the new boss of accounts payable she was told that the new company was outsourcing that function all together. She had lost it. When she asked what would happen to her they said they didn’t have any plans.

She sent an email to the boss who had induced her to move to Toronto indicating that she felt like a name in a box, just another number that didn’t matter. The last straw, which broke the camel’s back, was the company’s decision to move headquarters, doubling her daily commute.

Bernice had had enough; she left her employment, taking the position that she had been constructively dismissed. In other words, even though nobody had said “You’re fired”, she had been terminated as a result of her treatment. The test is whether a reasonable person in the same situation would have felt that the essential terms of the employment contract were being substantially changed.

The judge found that not only had the employer broken the promises made to Bernice to induce her to move to Toronto, it had fundamentally changed her job. Bernice was awarded 15 months’ pay in lieu of notice and the costs of moving her family back to south-west Ontario and the costs of the litigation.

The costs of selling her Toronto home and moving were $45,000. Employers should remembered that promises made will be enforced and especially when someone has uprooted their entire family based on those promises.
Employers also have to be careful about execution by a thousand mosquito bites. One or two of the changes might not have tipped the scale alone but the end result of the cumulative changes and disregard of Bernice’s concerns sealed the deal. 

Employer can make changes to the terms of employment but they can’t be too drastic or without reasonable notice.
 
Ed Canning
Ed Canning
P: 905.572.5809
ecanning@rossmcbride.com