Marcelle asked:

I have been employed as a receptionist/office manager for the past 12 years. Eighteen months ago I received my last raise. All though only $100.00 it was never the less a raise and brought my salary up to just over $42,000. I enjoy my work very much and so do the people I interact with including my manager.

Several days ago my manager gave me a letter stating that I was overpaid in my position and that they were now offering a pay reduction to $33,000 starting in 2 months August 24--a huge reduction--and would I please sign the letter accepting the reduction. Furthermore they said they would reduce some of my responsibilities to justify their reduction in salary. I requested and received from my manager a "new" list of responsibilities. These responsibilities he outlined are essentially the same as my existing responsibilities.

I verbally requested that he train me in a new position with the company so that I might yet be gainfully employed after 1 or 2 years from now at my present level of income of $42,000. He said that that was not an option. I have refused to accept the new salary level and anticipate that I will be let go in the next day or two.

I believe I can find another position elsewhere at $33,000 but certainly not at $42,000 I will need training of sorts to get to this level and this will take at least a year or so. Because they gave me a raise not long ago I have a mortgage that reflects this income. I believe the company has a moral responsibility to me to ensure that I can reach this level of income again and that I am entitled to a decent amount of severance pay.

What amount do you think is fair under the above described circumstances?

answered:

Marcelle - in any employment relationship, you have a contract of employment, whether this is a formal written agreement or an informal verbal agreement, regarding the terms of your employment. Your employment contract will include the terms of your employment such as the hours that you are expected to work, the salary that you will be paid for the work and the responsibilities that you have in your employment. Once the terms of your employment have been agreed upon, the fundamental terms can not be changed by either you or your employer unless both of you agree, or unless reasonable notice of the proposed changes has been given. What is reasonable notice depends on a variety of circumstances including the nature of the employment, your age, and the number of years that you have worked for the employer. If an employer unilaterally changes a fundamental term of your employment, which your employer is doing given the facts that you have told me, he must give you reasonable notice of the change. This means that the employer would have to give you reasonable notice that at some point in the future your salary was going to be reduced.

The issue then is what in the circumstances of your particular case would be considered to be reasonable notice. As indicated, some of the factors that are considered in determining what is reasonable notice are your age, the length of time that you have worked for this employer and the nature of the position that you have filled. As well, if you have a written contract of employment, that contract may provide some guidance on what notice is required. There may be other facts particular to you and your employment that should also be considered.

If the employer chooses to not provide you with reasonable notice of the decrease in your salary, you have been constructively dismissed and would be entitled to pay in lieu of notice. The amount of pay in lieu of notice that you would be entitled to will again reflect the amount of notice that you should have been given, the amount of money that you would have earned during that time period if you had continued to work for your employer, less any amounts that you earned from any other employers during the period of reasonable notice.

Although you may feel that the employer owes you a moral responsibility, at law they owe you only the responsibilities they have agreed to in your employment contract. If you do not have a written employment contract, or if your employment contract is silent on the issue of notice, it will be assumed that you and the employer agreed that you would be provided with reasonable notice of any termination of your employment or alteration of fundamental terms of your employment.

The above is general information only. I recommend that you speak to a lawyer about the specifics of your case.

About the author

1500 - 1030 West Georgia Street
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Phone: (604) 484-2638
e-mail: rkeith@rosekeith.bc.ca

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