There are three choices available to an employee when an employer attempts to unilaterally change a fundamental term of the contract:

1. The employee may accept the change in the terms of employment – in which case, the employment will continue under the altered terms;
2. An employee may reject the terms and sue for damages if the employer persists in treating the relationship as subject to their new term. This action is considered “constructive dismissal”; or
3. The employee may make it clear to the employer that he or she is rejecting the new term. The employer may then respond to this rejection by either terminating the employee with the proper notice and offering re-employment on the new terms. If the employer does not take this course and permits the employee to continue to fulfill his or her job requirements, then the employee is entitled to insist that the employer adhere to the original terms of the contract.

In a recent case (Russo v. Kerr Brothers Limited) in the Ontario Superior Court, an employer argued that an employee who had continued to work at the company after his salary was drastically cut for 18 months until his wrongful dismissal case came to trial, did not condone or accept these terms and waive his constructive dismissal claim. What was important in that case, however, was that the worker retained a lawyer promptly upon the change in his circumstances, who then communicated to the employer that this was a situation of constructive dismissal and that litigation was inevitable unless the company provided Mr. Russo substantial notice pay in view of his exceptionally long service.

This reinforces the importance of retaining counsel promptly after there has been a change or notice of change to the nature of your employment.