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THE QUESTION
I was recently offered a promotion and a raise at my current company. It’s a promotion from senior associate to manager, which means I’ll now be responsible for a team of three people. However, I was told that the raise associated with the promotion wouldn’t be put in place until two months later because of budget constraints. I reluctantly agreed, but now the two months have passed and they said they need another two more months for the raise. It seems unfair to me that I’m being asked to do more work without getting compensated for it. It was in my new contract that the raise would be put in place after two months, so are they legally obligated to give it to me?
THE FIRST ANSWER
Grace Levy, labour and employment lawyer, Pink Larkin, Halifax
Yes, your employer is obligated to honour the terms of your new employment contract, including the raise after two months. Your new employment contract is a binding agreement and any failure to comply with its terms – either by the employer or the employee – can constitute a breach.
In your case, the employer’s decision not to provide you with the agreed-upon raise, despite you fulfilling your new managerial responsibilities, can be seen as a breach. However, I would urge you to read through the entirety of your new employment contract to see if there are any provisions which stipulate that your raise is in any way dependent on the company’s budget.
If there is no clause to that effect, I recommend bringing up the raise issue internally (either with your supervisor or HR team) as soon as reasonably possible. If you continue working in your managerial role without the raise, it could be interpreted as your acceptance of the employer’s position.
I would present your supervisor/HR team with a copy of your contract, highlighting the clause regarding the raise, outlining your concerns and then requesting a clear timeline for when you can expect the raise. Maintaining a professional tone in all interactions can help facilitate a positive resolution.
If this informal resolution fails, you may consider filing a formal complaint with the company (if that is an option), again documenting all interactions and responses received. If the issue remains unresolved, you may consider seeking legal advice to understand your rights and potentially take legal action for breach of contract.
THE SECOND ANSWER
Alia Besharat, associate, Ogletree Deakins International LLP, Toronto
In Ontario, generally speaking, employers are not required to provide pay raises even in the case of promotions. That said, when the terms and conditions are fleshed out in a contract or agreement, the employee may have recourse to enforce the contractual terms. Here, the term that the employer breached was that of a promised raise following a promotion. Before pursuing your options, it is strongly recommended that you first communicate your concerns directly with your employer. Ideally, you would want to put your concerns in writing so that, if necessary, you can rely on the communications down the line.
Should your employer not provide you with the raise as promised, there are a few avenues of legal recourse that you can take. One option is for a court to order that the contract has been repudiated or void as a result of the employer’s breach of the contract. Another option is to bring a claim for constructive dismissal as your employer has changed or altered a fundamental term of the contract without your consent. Both of these options can be lengthy and costly.
If you want to request the court to find the contract repudiated or void, and a court agrees, then your entitlements would be determined without the contract and, instead, under the common law and any related statutes. A constructive dismissal can be seen as an indirect termination, which would trigger termination pay. The employee may also be entitled to damages arising from the bad faith action of the employer. Over all, you do have legal recourse but it is recommended to first speak with your employer.
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