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Can employer reduce wages?
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1679 Posts

Posted - 01/18/2008 :  15:47:27  Show Profile
I spoke to a representative of the Ontario Labour Board and she told me that an employer has the right to reduce your hourly rate of pay.

They are within their legal rights to do so.

Is this true in all cases?

Site Staff

308 Posts

Posted - 01/18/2008 :  15:54:31  Show Profile
Hi there,

Thanks for your question.

The Ontario Ministry of Labour has written a guide called "Protecting Employees: How You are Protected." http://www.settlement.org/sys/faqs_detail.asp?faq_id=4000649

This guide states that your employer cannot reduce your wages because you ask about or ask for your rights.

This means that an employer does have the right to reduce an employee’s hourly wage but only if the reduction does not go below minimum wage and if the reduction does not constitute a “fundamental change” to the terms and conditions of employment.

In other words, if the reduction is so great that an employee is forced to resign, that would represent a fundamental change. If an employee resigns not out of necessity but out of principle, that would not represent a fundamental change.

An Employment Standards Officer determines if a fundamental change has occurred. If so, this may be considered a “constructive dismissal” (http://www.labour.gov.on.ca/english/es/guide/guide_14.html#cons-dismissal) and the employee may be entitled to severance pay.

However, all of this information applies only to employees who are covered by the Employment Standards Act (ESA) in Ontario. Federal employees and a few employees in other special categories are not covered by the ESA.

Furthermore, employees who are part of a union may have a collective agreement with the employer that protects the employee above the minimum standards set out in the ESA.

You are advised to contact the Employment Standards Information Centre for more information about your particular situation.

416-326-7160 (Toronto area) or
1-800-531-5551 (toll-free)

I hope this information has been helpful.


Settlement.Org Staff

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