Has Your Employer Breached Your Employment Contract? Here’s What To Do Next

What counts as a breach of an employment contract in Ontario?

A breach occurs when an employer fails to perform an obligation they agreed to in the employment contract. Common examples include withholding wages, bonuses, or commissions that were earned; changing the employee's role, compensation, or location in a way the contract does not permit; failing to honour benefit or equity commitments; and terminating the employee without providing the notice the contract requires. A breach may also constitute a violation of Ontario's Employment Standards Act, 2000 where the conduct falls below statutory minimums, and may amount to constructive dismissal where the breach is fundamental to the employment relationship.

Can my employer change the terms of my employment contract without my agreement?

Not unilaterally where the change is a significant departure from the agreed terms. Minor or administrative adjustments may be within the employer's ordinary management discretion. But a significant reduction in compensation, a material change in duties, or removal of contractual benefits requires the employee's genuine agreement and typically fresh consideration to be legally binding. Where the employer imposes a significant change without agreement, it may constitute a breach of contract and, depending on severity, constructive dismissal.

What if my employer's termination clause is in my contract but it seems unfair?

Termination clauses in Ontario employment contracts are regularly found unenforceable by courts. A clause that is ambiguous, that could be read as providing less than the ESA minimum on any plausible interpretation, or that was not properly presented with adequate consideration at the time of hiring may not bind you. Where the clause is void, your entitlement defaults to common law reasonable notice, which is typically significantly higher. Getting the specific language assessed by a lawyer before accepting any severance offer based on the contractual clause is the most important step you can take after a termination.

What is the limitation period for suing my employer for a contract breach in Ontario?

The general limitation period for civil claims in Ontario court is two years from the date the breach was discovered or reasonably ought to have been discovered. For a single-event breach a termination without proper notice, or a bonus payment that was never made on a specific date the clock runs from when you knew or ought to have known about the breach. For ongoing breaches recurring shortfalls in pay, for example each occurrence has its own limitation period. Getting legal advice promptly after identifying a breach protects the full range of available claims.

Can a breach of employment contract also be a constructive dismissal claim?

Yes where the breach is fundamental to the employment relationship. A significant unilateral reduction in compensation, a material demotion, or removal of core responsibilities without consent can simultaneously be a breach of the employment contract and constructive dismissal. Where constructive dismissal is established, the remedies are the same as for an employee terminated without cause including common law reasonable notice. Getting advice on whether your situation supports a constructive dismissal claim alongside a breach of contract claim is important before deciding how to respond.