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HBC employee’s ‘status change’ a lesson in constructive dismissals: employment lawyer

Restrictions meant to stop the spread of COVID-19 have created turmoil for employers and employees alike.

More than a year after the beginning of the pandemic, my law firm, Samfiru Tumarkin LLP, continues to receive calls from workers across all industries and income levels. Even if they haven’t been let go permanently, employees are being asked to accept drastic changes to their jobs.

Consider our case involving Yvette Mitchell.

Mitchell has been working for the Hudson’s Bay Company (HBC) in Toronto for the past 21 years in a part-time capacity. She was placed on a temporary layoff at the outset of the pandemic.

In March of this year, HBC told Mitchell that they were making a “status change” to her employment and were bringing her back to work as an “auxiliary associate” in September. This new position comes with a guarantee of zero to 27 hours of work per week. She will lose all her health benefits, five weeks of annual vacation and potentially her pension entitlements.

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The new position will result in serious employment and financial instability, as the company will have the ability to schedule her for as few hours as they please. The changes to Mitchell’s job clearly meet the criteria for constructive dismissal, an unwanted modification to the agreed terms of employment that is illegal — even during a pandemic.

An employee can choose to accept a change to their hours of work, pay or duties. They also have a right to treat that change as a termination and pursue full severance pay.

READ MORE: Constructive dismissal during COVID-19

Mitchell chose not to accept those changes and made the call to my employment law team so she can claim the compensation she is owed.

The consequences of accepting fewer hours of work or less pay

Employees who agree to a significant cut in hours or pay will not only see the size of their paycheque decrease, but also likely lose the ability to claim constructive dismissal if their employer makes a similar change in the future.

You may also be sacrificing a portion of your severance package should you be let go after accepting fewer hours or less compensation. With the changes to Mitchell’s job, for example, she could potentially work zero hours a week. If HBC decides to permanently let her go, they can calculate her severance package based on those new hours. This would give her a fraction of the amount she would be entitled to if she were still working the part-time hours she did before the pandemic.

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READ MORE: How do you know if your severance package is fair?

I have seen this strategy play out with numerous companies across Canada, including HBC just a year ago.

Last spring, amid the emerging pandemic, HBC asked 94 employees to take a 25 per cent pay cut. They agreed. The first day after the cuts kicked in, they were all terminated by the retailer. The oldest retailer in the country was trying one of the oldest tricks in the (employment law) book: cut employees’ salaries before termination to save potentially hundreds of thousands of dollars in severance payouts.

When we brought this development forward to the media, HBC backed down and paid proper severance to the employees they had let go.

Click to play video: 'Toronto-area Hudson’s Bay employees get pay cut, are then laid off' Toronto-area Hudson’s Bay employees get pay cut, are then laid off
Toronto-area Hudson’s Bay employees get pay cut, are then laid off – Apr 24, 2020

WATCH ABOVE: A Toronto lawyer says Canada’s oldest company acted in bad faith when it asked employees to accept a pay cut and then terminated them the next day. HBC denies wrongdoing. Sean O’Shea reports.

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We have since heard from dozens of HBC employees who find themselves in the same situation, as well as employees at other companies facing similar changes to their jobs.

READ MORE: Hudson’s Bay to permanently lay off more than 600 workers across Canada amid COVID-19

What to remember if your employer makes changes to your job

If your employer alters your job in a serious way, you only have a limited amount of time to do something about it. If you wait too long before speaking out or taking action against the change, you may be legally deemed to have accepted it. You will be stuck with the new terms.

Before you accept an employment contract, have it reviewed by an employment lawyer to ensure that it doesn’t give your employer the right to alter the terms of the job at their discretion.

Speak to your employer if you are facing unwanted changes. Make sure to share your opposition to those changes with the company in writing. One option may be to agree to test drive a modification for a temporary period, after which your work conditions will return to normal. By ignoring changes made to your work, you may be putting yourself in a very vulnerable legal position.

READ MORE: 5 vital facts about severance pay you probably weren’t aware of

How do I know if I have been constructively dismissed?

I created the Pocket Employment Lawyer as a free resource to help people find out if they may be experiencing a constructive dismissal. It will take you through a few quick questions to help you determine if your rights have been breached and what compensation you may be entitled to.

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Are changes being made to your job?

Contact the firm or call 1-855-821-5900 to secure assistance from an employment lawyer in Ontario, Alberta or British Columbia. Get the advice you need — and the compensation you deserve.

Lior Samfiru is an employment lawyer and partner at Samfiru Tumarkin LLP, one of Canada’s leading law firms specializing in employment law and disability claims. He provides free advice as the host of Canada’s only Employment Law Show on TV and radio.

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