Too many employees assume a new boss with higher standards or a more aggressive or micromanaging style equals a free pass to quit and sue. (Credit: iStock)
By Howard Levitt and Alexis Lemajic
Canadians have dragged themselves back from summer cottages, wilderness campgrounds or Tuscan Airbnbs to something far less relaxing: workplaces in flux.
Across the country, strikes are brewing, insolvencies multiplying and acquisitions are swallowing companies whole. Even where the headlines are not dramatic, managers are being shuffled like a deck of cards.
For employees, that means uncertainty. For employers, it means risk. And for lawyers like us, it often means business is picking up
First, let’s draw a line. A “change of control” occurs when ownership itself changes hands (as when Indigo Books & Music Inc. was bought, for example). That’s when contracts with “change of control” severance provisions or golden parachutes suddenly become worth their weight in, well, gold. Employees in those scenarios should be calling their lawyers before signing a single new agreement.
A change in management is different — and ubiquitous. This is when a company reshuffles internally, moving a new or existing executive into the corner office. Your old boss is gone; a new one is installed. In these instances, there is no inherent entitlement to severance, but there is fertile ground for legal mistakes — and costly ones.
The instinct of a freshly minted manager is to show who is boss. Bad idea. Canadian courts punish that reflex with ferocity.
Here’s what the law demands of you:
1. Listen before you lead. Employees know what’s working and what is not. Ignore them and you will waste both money and morale.
2. Respect what is already in writing. Disability accommodations, performance improvement plans, and remote work arrangements do not vanish because you arrived. Rip them up and you you’ll be contending with a constructive dismissal or human rights claim.
3. Do not overhaul overnight. Wholesale changes are costly and destabilizing. Start with compliance basics: are your contracts enforceable? Are your bonus plans legally sound? And are you meeting pay obligations? These are the first cracks employment litigators exploit.
4. Avoid unilateral changes. Shift an employee’s duties, change their reporting lines or tinker with bonuses without consent and you may have bought yourself a constructive dismissal lawsuit.
5. Call your lawyer before, not after. After-the-fact legal advice is damage control, and by then, the damage is often irreversible.
Too many employees assume a new boss with higher standards or a more aggressive or micromanaging style equals a free pass to quit and sue. Wrong. Unless the fundamental terms of your employment change, you are stuck with the new reporting structure whether you consented to it or not. But, handled smartly, change can be an opportunity.
Embrace the reset. Unless the fundamentals of your role are gutted, a new manager is not grounds for constructive dismissal.
Respect the chain of command. Reporting lines belong to the company, not the personality of the manager you preferred.
Document everything. If you are being targeted or micromanaged, keep notes. Judges appreciate contemporaneous records.
Be strategic. New leadership creates advancement opportunities. Push for them. If the culture no longer fits, seek legal advice before resigning to ensure you do not walk away from unpaid bonuses, stock options or commissions.
Management changes do not rewrite employment law. They simply provide fresh opportunities to violate it. Handled with foresight, a new boss can energize a company; mishandled, it fuels the kind of lawsuits that keep lawyers like us busiest.
Change may be inevitable but litigation need not be.
Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers with offices in Ontario and Alberta, and British Columbia. He practices employment law in eight provinces and is the author of six books, including the Law of Dismissal in Canada. Alexis Lemajic is a senior associate at Levitt LLP.