What NOT to do if your boss is pushing you out
If you are going to take the position that your employer has so fundamentally changed the terms of your employment that you have the right to walk out the door and sue for pay in lieu of notice, make sure you look before you leap.
A constructive dismissal is a situation in which an employee has effectively been terminated without anyone delivering Donald Trump’s famous epithet, “You’re fired!”
The law says that if an employer makes a fundamental or substantial change to the terms of your employment, a change that violates the written or unwritten contract terms, the employer is committing a fundamental breach and the employee can consider themselves constructively dismissed if the employee did not receive reasonable advanced notice of the change. The notice an employee should receive of any fundamental change is based on their age, seniority and level of responsibility.
Jack had worked for two related car dealerships for four years as the Director of Finance and Operations.
The dealerships were owned by the same company. Jack earned $125,000.00 a year to work for the first company and $50,000.00 a year to work for the second. He spent a very limited amount of time at the second dealership. In January of 2007, the owner announced that he did not want to be involved in the day to day operations of the second dealership and that a new general manager was being appointed. At the same time, Jack was told that he would no longer be required to render services to the second dealership.
Three days later, Jack was told by the secretary-treasurer that the boss had instructed to stop paying jack the $50,000.00 from the second dealership. That’s it. That’s all that was said. Jack went to work the next day and spoke on the phone to his boss about different matters twice. Not once did he ask the boss about the $50,000.00. At the end of the day, he cleaned out his desk and went home. A few days later, he sent a three-page rant to his boss accusing him of engaging in lies, slander, humiliation and having Jack’s remuneration changed without proper discussion. He then decided to repeat in the letter every bad thing he had heard any other employee say about a member of management which included calling one a thief, one a raving lunatic, one an asshole, and one useless.
Jack then hired a lawyer and sued for constructive dismissal.
At trial, Jack’s boss gave evidence that if Jack had simply asked him, he would have learned that the boss’s intention was to pay Jack’s entire remuneration from the first dealership for which Jack was still working. The $50,000.00 cost would appropriately be moved from the second dealership to the first. Jack would suffer no loss in wages. It did not make sense to pay somebody wages from a company to which no services were being rendered.
The judge found it particularly telling that although Jack spoke to his boss twice after he got the partial information from the secretary-treasurer, he never asked about the $50,000.00. Jack lost. He was ordered to pay over $37,000.00 in legal costs to the employer. He would have had to pay his own lawyer on top of that.
Much can be learned from Jack’s sorry tale. If you think a significant change has been made to the terms of your employment, try to get the employer to put it in writing. If they don’t comply, send an email confirming your understanding of what you’ve been told and ask the employer to advise you if you have misunderstood. If you can prove they got that email through a read receipt and never bothered to reply, you will have very good evidence of what was actually taking place.
Never walk out that door without having first consulted a lawyer who limits their practice to employment law. Their job is to give you an informed and dispassionate second opinion. Remember, you are in the middle of it and your emotions are running high. You need somebody who can tell you what this is going to look like to a judge in a courtroom months later. If you jump the gun and walk out without having established a case, you will get no pay in lieu of notice and will likely be denied Employment Insurance.
Finally, remember that an employer can make any change they want if they provide you with reasonable notice of that change. For instance, if you were a three-year, non-management employee and your employer gives you two or three months’ notice that your income is going to be cut in half, that is not a constructive dismissal. If your employer gave you two or three months’ notice that you were being terminated, you would not have a claim for pay in lieu of notice…you received the working notice. If an employer can say, “Two months from now your job is done” and owe you nothing more, they can also say, “Two months from now I am cutting your wage in half.” What you are really being told is that you are terminated in two months but there is another job with different terms available after that if you would like to have it.
As published in the Hamilton Spectator, May 16, 2011