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Debra
Debra, Lawyer
Category: Canada Law
Satisfied Customers: 101403
Experience:  Lawyer
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I have an employment contract to sell general insurance with

Customer Question

I have an employment contract to sell general insurance with a remuneration package of 40% of earned commissions on renewals and new business. I have been advised that my commissions will be reduced to 20% on renewal and 70% on all new business. I have spent the last 15 years with this company, building my client base and will lose approximately $42,000 annually on my renewal income. I am 66 years old and had planned on working until age 70 or later. If I do not sign the new contract, my employer can void the current contract and I am prevented from soliciting my clients for 2 years. Do I have any grounds to refuse the contract or action for wrongful dismissal if I refuse to accept the reduction in my commissions?
Submitted: 1 year ago.
Category: Canada Law
Expert:  Debra replied 1 year ago.

The situation does sound like a case of constructive dismissal.

When an employer does something that fundamentally changes the nature of the employment so that it drives the employee to quit, this may be a case of constructive dismissal. This is usually the case when the employer reduces wages, cuts hours etc. It is also the case where the employer's conduct makes it intolerable for the employee to continue working.

If an employee does quit under these circumstances then the law is that constructive dismissal is wrongful dismissal and the employer will be liable for damages.

If you are considering this option it is crucial that you first consult with an employment lawyer so that you can get a legal opinion from an expert both about whether the facts amount to constructive dismissal and, as well, about what damages you may be entitled to.

Generally the damages would be equal to what you would receive had you been dismissed without cause. If that had been the case you would have been entitled to receive "reasonable" notice or pay in lieu of notice.

Generally, in determining what is reasonable notice Courts look at several factors including the length of time you worked for the employer, your age, your position, the likelihood of finding new employment etc.

At the high end, if you were in a managerial position, the Court would likely order one month's notice or pay in lieu of notice for each year of employment. If you were not in a managerial position the Court would order somewhat less.

Does that help as a starting point?

Customer: replied 1 year ago.
Remembering there is a contract in place and a 60 day notice of termination if I do not agree to the new terms, would this still be deemed to be constructive dismissal?
Expert:  Debra replied 1 year ago.

Yes because it is a dismissal. They are dismissing you by demoting you but are trying to make it look like you are quitting if you leave.

Customer: replied 1 year ago.
I am sorry but I do not want this topic to be overheard by my family at this point. Whereas, I have not received any other reason at this time for the commission reduction, can the employer go back and suggest cause for terminating the contract?,
Expert:  Debra replied 1 year ago.

Not this way.

You would have had to be provided with written warnings first.

Customer: replied 1 year ago.
I have to digest your reply and may need some time to respond. May I respond later tonight or in the morning with any further comments or questions. Should I reply to the offer, ignore the offer and get legal representation?
Expert:  Debra replied 1 year ago.

I think you should tell them you are going to get some legal advice and get back to them.

You are free to ask follow-up questions whenever you like. The post will not lock even after you rate me so if you think of something later on it is fine to ask then too.