I am an Ontario employee and am considering leaving my current employment. Before I resign, I would like to understand my rights and whether I may have any claim against my employer.

I have a written employment contract stating that I am a full-time salaried employee earning an annual salary. It states that I work 40 hours per week and that my hours may be irregular and flexible.

My employer requires me to punch in and out and is deducting time from my pay. If I am, for example, 9 minutes late, I have been deducted 15 minutes. In addition, my employer deducts 30 minutes from my pay every day for smoking breaks. I have never signed an agreement authorizing this smoking-break deduction.

My contract specifically states that I am paid an annual salary rather than an hourly wage. It also states that I must provide three weeks' notice if I resign.

I would like to know:

Whether these deductions appear to be permissible under Ontario employment law and/or my employment contract.
Whether the employer's treatment of my compensation could constitute a breach of my employment agreement.
Whether these circumstances could affect my obligation to provide three weeks' notice if I resign.
Whether, based on these circumstances, I may have a potential claim against my employer.

I have a copy of my employment contract and pay records and can provide them if needed. I would prefer to communicate by email initially if possible.

Your employer generally should not make unilateral deductions from your wages where your employment contract provides that you are entitled to a fixed annual salary, rather than being paid on an hourly basis. Depending on the circumstances, this may support an unpaid wages claim under Ontario’s employment standards legislation. However, if you were not actually working during the periods for which you are claiming wages, your entitlement to those wages may depend on the specific terms of your employment agreement and the circumstances surrounding the missed work.

Further, where an employer unilaterally reduces an employee’s compensation or otherwise refuses to provide compensation required under the employment agreement, this can, in some circumstances, amount to a constructive dismissal. The change must generally be sufficiently substantial and fundamental to the employment relationship. A reduction in compensation of approximately 20% has sometimes been treated as a useful benchmark; there is no strict 20% threshold, and the circumstances of each case must be considered. Based on the information you have provided, I am not presently satisfied that the deductions are significant enough to support a constructive dismissal claim, although I would need to review the employment agreement and the details of the deductions before reaching a firm conclusion.

With respect to your question about providing three weeks’ notice of resignation, the employer’s actions do not necessarily relieve you of any contractual obligation to provide the required notice. That said, an employer seeking damages because an employee failed to provide contractual resignation notice would generally need to establish that it suffered compensable damages as a result of the failure to provide that notice. In practice, this can be difficult, particularly where the employee is not in a senior or specialized position and the employer has other employees who can assume the employee’s duties.

If you would like more information specific to your situation please contact us.