Speak Up When Terms of Employment Change
In the employment context, we always talk about “warning letters” as something an employer gives to an employee to try to correct bad behaviour. It can be just as important for employees to provide their employers with a warning letter of sorts when promises are broken.
Every employee is implied by law to have promised to show up to work when scheduled, perform the reasonable tasks assigned, look out for the best interests of their employer and not to do anything that breaches the trust and good faith that is necessary for the continuation of the relationship.
Employers also make promises to employees. Whether those promises are explicit or implied, an employee who doesn’t react to a broken promise may prejudice their rights.
Imagine you obtain a position as a commission sales representative. You were told that you will be paid 4% commission on all sales booked by you and for the first six years that is exactly how you are paid. It does not matter whether there is a written document confirming the commissions terms. Six years’ worth of pay cheques firmly establish the agreement
Six years into the position you have established a good client base with many repeat customers. Sales are booked without you having to put in as much effort as you did at the beginning. The employer decides that they want to encourage you to find new clients and not sit on your laurels. You are told that henceforth only orders from new customers will garner the 4% commission and existing customers with repeat orders will only pay 2.5%. You say nothing and 8 months later, despite your compliance, you are terminated as part of a “restructuring”. The employer is going to take all your existing clients, assign them to a salaried customer service representative and keep the commissions for itself.
While discussing with your employment lawyer the severance proposal you have received, you ask if you can claim for the 1.5% commission you’ve been underpaid for the last eight months before your termination. There is, in fact, a decent chance that a judge will award you that lost commission and even award you pay in lieu of notice at the higher rate you should have been receiving if the terms of employment had never been breached.
Those chances, however, increase significantly if you objected in writing at the time you got short-changed on commission.
If you did not, you leave the door open for the employer to argue that through your silence and continued service you condoned and accepted the change to the terms of your employment. As unfair as it seems, given that the employer was the one to breach the terms, those arguments have sometimes succeeded in the absence of an objection in writing at the time.
If you want to record an objection so that you can later claim the damages at some point within the two-year limitation period from the date of the change, without poisoning the relationship, you might write a letter like this:
I just wanted you to know that I am disappointed and do not agree with this change to the terms of my compensation and hope you reconsider but I will continue to give a 100% effort to my job responsibilities as I need to support myself and my family.
The letter doesn’t smell like it was written by a lawyer and will probably be ignored by the employer but can be used by you if you ever decided to pursue the claim to prove you did not condone or consent.
If you would just as soon be terminated with a severance package, the letter would be stronger and look like this:
Please be advised that I object to the unilateral change to the terms of my employment without my consent and without reasonable notice and my continuation in my employment is without prejudice to my right to pursue a legal claim arising from this breach of contract.
Of course, this says lawyer all over it and if your employer is silly enough they may just terminate your employment on the spot. You will be entitled to pay in lieu of notice.
If the employer doesn’t terminate you, a demand letter from your lawyer and/or a statement of claim will likely do the trick.
Ed Canning practices labour and employment law with Ross & McBride LLP, in Hamilton, representing both employers and employees. You can email him at email@example.com