30 Mar My Employer Reduced My Hours, is this Constructive Dismissal in Ontario?
Working as an hourly employee can come with challenges, especially when you have little control over your weekly schedule. Depending on the industry and the time of year, some weeks may naturally be busier than others. But what happens when your hours are consistently reduced? At what point could this reduction be considered a constructive dismissal in Ontario?
Definition of Constructive Dismissal
A constructive dismissal occurs when an employer unilaterally makes a substantial change to a fundamental term of employment without the employee’s consent, and the employee resigns in response.
Let’s break it down. If your employer reduces your work hours, you must demonstrate that this change includes all of the following criteria:
- A unilateral change – the employee did not consent to the change
- A substantial change – the reduction is significant in size and impact
- A change to a fundamental term of employment – affecting core aspects such as pay, status, or job security
- Resignation within a reasonable time – the employee acts promptly in response to the change
Can a Reduction of Work Hours Be a Constructive Dismissal?
Yes – a reduction in work hours can constitute constructive dismissal. However, it is necessary to determine whether the change meets the criteria outlined above.
Consent is critical. If the employee ever agreed to the reduction in work hours, it cannot be considered constructive dismissal. Even if the employee does not formally consent in writing, continuing to work without objection may be interpreted as accepting the new terms.
Evaluating if the Reduction Amounts to a Substantial Change.
To determine whether a reduction in hours is a substantial change, courts evaluate the size of the reduction, impact on income, role expectations, and industry norms.
For example, if an employee who consistently worked 40 hours per week is reduced to 16 hours per week, this represents a 60% decrease in hours and income, likely creating a serious financial impact. If the employee was regularly working 40 hours per week and reasonably “expected” to continue to be scheduled for full-time hours, making the reduction to part-time would be considered a deviation from the employee’s role expectations. Further, if full-time hours are standard in the industry, a drop to 16 hours per week would be inconsistent with industry norms. All these factors together would support a finding that the reduction is substantial.
Evaluating whether the Change Affects a Fundamental Term of Employment
Courts also consider whether the change affects a fundamental term of employment, including compensation, status (full-time vs. part-time), and job security and predictability.
Using the same example, a reduction from 40 to 16 hours may be considered a fundamental change because the employee’s compensation drops by 60%, their status changes from full-time to part-time (potentially affecting benefits eligibility and workplace standing), and the reduction creates uncertainty and threatens job security, as the employee reasonably expected full-time work throughout their employment.
Determining Whether You Resigned Within a “Reasonable” Timeframe
The final criterion for constructive dismissal is that the employee must resign within a reasonable period in response to the employer-imposed change.
In Ontario, a “reasonable” timeframe is typically within weeks to a few months. Courts expect employees to act promptly if they experience a significant and unacceptable change to their employment. If an employee spends time exploring alternative options or requesting accommodations, courts generally consider this period as part of the reasonable timeframe.
The timeframe can be deemed “too long” if the employee waits several months or years to resign since the change. As stated above, continuing to work in the new conditions without objection can be interpreted as accepting the change.
Circumstances Where it May Not be a Constructive Dismissal
Not all reductions in hours qualify as constructive dismissal. Circumstances where a claim may not succeed include:
- The employee agreed to flexible work hours
- The employment contract allows variations in hours
- The reduction is minor
- The reduction is temporary and reasonable, such as being consistent with industry standards. Generally, permanent reductions are more likely to be considered constructive dismissal, whereas temporary reductions, while still potentially actionable, are less likely to meet the legal threshold.
- Fluctuating hours are a common practice in the industry
If you are unclear whether your reduction in hours could be deemed a constructive dismissal, please contact KCY at LAW by submitting an online consultation request or by phone at 905-639-0999 to book your consultation today.