Forced to accept a pay cut in Ontario? Next steps

When non-unionized workers in Ontario are faced with a pay cut, many won’t challenge their employer because they believe the company has the right to reduce their wages.

The reality is that employees in the province can refuse negative changes to their job. Major modifications, such as slashing your salary or commission, are illegal.

When significant adjustments are made to the terms of your employment without your consent, it’s very likely that you can treat it as a constructive dismissal.

In this situation, the law allows you to quit your job and pursue full severance, which can be as much as 24 months’ pay.

WATCH: Employment lawyer Lior Samfiru explains what you need to know about constructive dismissal on an episode of the Employment Law Show.

However, you shouldn’t resign before speaking to an experienced Ontario employment lawyer at Samfiru Tumarkin LLP.

We can confirm that you have been constructively dismissed, assess your legal options, and help you secure the compensation you deserve.

If your boss is forcing you to accept a pay cut in Ontario, here are four things you need to do.

LEARN MORE
• Employment Law Show: How to handle a bad boss
• Pay raises in Ontario: Employee rights

1. Remain calm and professional

While it can be extremely frustrating to learn that your salary or commission has been reduced, it’s crucial that you don’t do anything drastic, such as quit your job, before seeking legal counsel.

If you resign without consulting an employment lawyer, you could unintentionally give up your right to a severance package.

In addition to severance, you won’t be able to access Employment Insurance (EI) benefits, which could make it very difficult to support yourself financially as you look for new work.

• LEARN MORE: Is two weeks’ notice the law when quitting in Ontario?

Getting angry about the pay cut or doing something to negatively affect the company can also put your right to severance at risk. Don’t give your employer a reason to deny you the compensation you deserve.

Following the conversation with your boss about the change to your salary or commission, continue to be professional and contact Samfiru Tumarkin LLP as soon as possible.

We can inform you of your legal options based on the size of the reduction.

SEE ALSO
• How to calculate severance pay
• Should I negotiate my own severance package in Ontario?
• Employment Law Show: Things to never do before seeking legal counsel

Example

One of the firm’s clients, a production manager in Oshawa, was shocked when her boss told her that her salary had been cut by 23 per cent due to “economic difficulties.”

While she wanted to resign immediately, she remained calm and contacted Samfiru Tumarkin LLP as soon as her shift ended.

Since the worker’s pay had been reduced by a substantial amount without her approval, our employment lawyers explained that she was well within her rights to claim constructive dismissal.

As a result, we were able to secure a comprehensive severance package for the production manager.

2. Get the details of the pay cut in writing

In Ontario, employers often tell non-unionized workers in person or over the phone that their salary or commission has been reduced.

If you are informed of the pay cut verbally, ask the company to provide you with the details of the modification in writing.

Make sure your boss includes:

• Why your wages are being slashed
• When the change takes effect
• Whether other aspects of your job will be affected by the reduction

3. Object to the pay cut in writing

Shortly after you have been notified of the pay cut, clearly state in a letter, email or text message to your employer that you don’t approve of the change.

If you wait too long to object to the reduction, or continue working following the modification, the company could argue that you have accepted the new terms of employment.

Rejecting the change to your salary or commission in writing will prevent your boss from being able to claim that you were fine with it.

However, it is common for non-unionized employees in Ontario to be fired without cause or let go after they refuse to accept a pay cut.

LEARN MORE
• Employment Law Show: What your employer legally can’t do
• Employment Law Show: Facts about the termination process
• Wrongful dismissal in Ontario: Your rights

4. Contact an employment lawyer

If you are fired or let go after refusing a pay cut, or for any reason, contact the experienced employment law team at Samfiru Tumarkin LLP. Our employment lawyers have successfully represented thousands of non-unionized individuals in various regions across Ontario, Alberta, and B.C.

In addition to severance package negotiations, we can assist you on a broad range of employment matters in Ontario, including:

For a comprehensive overview of employment, disability, and personal injury law, explore our Law Essentials page.

If you are a non-unionized employee who needs help with a workplace issue, contact us or call 1-855-821-5900 to get the advice you need and the compensation you deserve.