Many employees rely on overtime as a significant part of their income. When an employer suddenly reduces or eliminates overtime hours, the employee’s earnings can drop substantially.
While employers generally have the right to control overtime, a significant reduction in overtime may give rise to a claim for constructive dismissal.
What Is Constructive Dismissal?
Constructive dismissal occurs when an employer makes a substantial change to a fundamental term of employment without the employee’s consent.
One of the most common examples is a significant reduction in compensation.
When Can Reduced Overtime Become Constructive Dismissal?
A reduction in overtime may constitute constructive dismissal where:
- Overtime was worked regularly and consistently;
- Overtime formed a significant portion of the employee’s income;
- The reduction results in a substantial decrease in overall compensation; and
- The employee did not agree to the change.
Every Case Depends on the Facts
Not every reduction in overtime will amount to constructive dismissal.
Courts may consider:
- The amount of overtime historically worked;
- Whether the overtime was regular or sporadic;
- The percentage reduction in overall earnings;
- The length of time the employee worked overtime; and
- Whether the employee accepted the change.
Act Cautiously if your Employer Reduces your Overtime
Employees who experience a significant reduction in overtime should be cautious before accepting the change.
An employee who continues working without objection may later be found to have accepted the new terms of employment.
Because constructive dismissal claims are highly fact-specific, employees should seek legal advice promptly after a significant reduction in compensation.
If your overtime has been reduced and your income has been significantly affected, contact our firm at lawyers@lmklawyers.com or at 416-221-9343 ext. 228 for a consultation. If we do not recover any money, you do not pay.