TORONTO – Many companies are making remote working a permanent aspect of some jobs, experts say, saying employers cannot reduce current employee pay without consent and face legal risk if they do. .
However, employers can hire new, remote employees at a lower salary, if they so desire.
Stephen Wolpert, a partner at a Canadian employment law firm white and lublin, told Granthshala.ca that an employer can change the employee’s salary if both parties agree to the deduction.
“If they are accompanied by both changes … there is no real impediment to that. The hard question is when an employer imposes it on an employee unilaterally, without the employee’s consent or without the employee acknowledging it. That working remotely is an advantage to them,” Wolpert said in a telephone interview on Thursday.
In those cases, Wolpert said, an employer can still reduce wages without an employee’s consent, but it comes with a “real risk” that the reduction will qualify as constructive dismissal of that worker’s employment, which can give them the right of separation.
Constructive dismissal, Wolpert said, is when an employer makes substantial changes to an employee’s terms of employment without consent, resulting in the employee having the option to terminate his employment.
However, what courts regard as constructive dismissal is “relative”, he said.
“If it’s a one percent reduction in wages, it can’t be seen as constructive dismissal. If it’s a 20 percent reduction in wages, it probably will,” Wolpert said. “The court will look at all kinds of different things to decide how large a pay cut can be tolerated before constructive dismissal.”
While cutting salaries of existing employees poses a legal risk for employers, Wolpert said they have the option of “red circle” one’s pay.
“In other words, you don’t reduce it, but you make an internal decision that you won’t increase it for a while,” he said. “And this is generally acceptable, as most employees are not entitled to a pay increase.’
Howard Levitt, an employment attorney Levitt LLP, said employers also have the option of hiring new employees at lower rates if they plan to make them work from home full time.
“They can legally hire 10 employees for the same job at 10 different rates,” Levitt said in a telephone interview with Granthshala.ca on Thursday.
However, he added that employers will have to give the option to the existing employees to return to office on full pay.
“if [companies] Wanting a policy where people working at home will earn less, they can keep that policy as long as they give people who were previously on higher pay, the option to keep their higher salary,” Levitt said.
Christopher Achkar, principal and employment attorney at the Toronto-based firm, eliminates the cost of owning and running office space while working remotely. achkar law, told Granthshala.ca that employers need to take into account new costs facing an employee working from home, such as increased electricity bills, as well as personal phone and Internet access.
“These are things that the employee will now have to spend on them, and the employer is essentially getting benefits,” Achkar said in a telephone interview on Thursday.
If an employer attempts to reduce an existing employee’s pay, Achkar said the employee should “make it clear” that they are refusing to change if there is no mutual agreement.
He added that if the employer comes back and says, “Too bad, take it or leave it,” that is grounds for constructive dismissal and the employee should speak to an employment attorney about compensation.
“What the employee should not do is say nothing about the reduction in pay and think that they can bring it back later,” Achkar said. “Once you accept a change in employment, such as a salary, it will be difficult to go back to it.”