(905) 526-9800 or 1 (866) 526-9800 contact@rossmcbride.comA+ A-

Changing compensation structure does not constitute constructive dismissal.

QUESTION: I have been a salaried sales representative with my company for four years.  Yesterday I got a letter telling me that as of the end of December, (3 months from now),  I am going on straight commission with a whole new compensation plan.  Do I have any rights here?

ANSWER:  Unfortunately, not really. This could be a significant change to the terms of your employment if it has the effect of reducing your income in a big way.  Employers can make significant changes as long as they give you reasonable notice of that change based on your age, seniority and level of responsibility.  You are not in a management position and reasonable notice for you, if you had been terminated would probably be three months. That means the employer could have said to you “three  months from now, you’re finished” and there’s not anything more you could claim from the employer. You do not get pay in lieu of notice because you got the appropriate advanced notice. 

By the same token, the employer can say “three months from now, I am cutting your wage in half” and you end up in the same situation.  You’ve gotten reasonable notice of that significant change.  You cannot claim you have been constructively  dismissed.

If you think this is going to drastically cut your income, you should use the next three months to aggressively look for employment elsewhere.
 
Ed Canning
Ed Canning
P: 905.572.5809
ecanning@rossmcbride.com