My Compensation Plan Was Cut Without My Agreement. Do I Have to Accept It, and What Are My Options?

Do I have to accept a compensation plan my employer cut without my agreement?

No. A change to a fundamental term of your contract is an offer, not an instruction, and you are entitled to refuse it. Your compensation is a term of a bargain both sides made. Your employer cannot rewrite it by memo, town hall, or an updated plan document quietly posted to the intranet. What it can do is offer you a new contract, and what you do next decides whether you accepted.

That is the part senior people get wrong. Executives are conditioned to absorb a bad year, protect the relationship, and deal with it later. In contract law, working on the new basis without objection is not patience; it is acceptance by conduct. In Lin v. Ontario Teachers' Pension Plan, 2016 ONCA 619, forfeiture amendments to incentive plans that the employees had refused to sign never became part of their contracts at all. The refusal is what preserved the position.

Two other things have to be true before an amendment binds you. You must have agreed to it, and you must have received something of real value in exchange for giving up what you had. Continued employment in the job you already hold is generally not new value. See a new employment contract and fresh consideration and can my employer cut my pay or hours.

What are my three options, and what does each one cost me?

Wronko v. Western Inventory Service Ltd., 2008 ONCA 327 sets out three, and there is a fourth that you fall into by default. You can accept the change. You can treat it as a repudiation, resign, and sue for constructive dismissal. You can reject it clearly, in writing, and keep working on your original terms. Doing nothing is the first option with worse evidence.

The third option is the one most executives want and the one most do not know exists. It keeps your income, your title and your resume intact while the legal position is preserved, and it forces your employer to make its decision in the open rather than by attrition.

How big does the cut have to be before it counts as a constructive dismissal?

Big enough that a reasonable person in your position would see an essential term as substantially changed. Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10 describes two branches: a single unilateral change that breaches an essential term, or a course of conduct showing the employer no longer intends to be bound. Farber v. Royal Trust Co., [1997] 1 SCR 846 makes the test objective, not a measure of how angry you are.

There is no magic percentage, and for an executive the analysis runs on total compensation rather than base salary. If your target bonus is 60 per cent of base and it is halved, the internal headline is 'no change to salary' and the reality is a cut of nearly a quarter of your cash. If your annual equity grant is dropped, the number is the grant value you will not receive plus the vesting you lose, not today's share price.

Some changes are fundamental almost by definition: a reduction in base salary, a change to the bonus formula that replaces an entitlement with pure discretion, a cut to the target percentage, a shift in the equity mix from restricted units into options struck above market, elimination of the employer pension contribution, and a change in reporting line that moves you out of the executive plan altogether. See title, reporting line and bonus target changed and constructive dismissal in Ontario.

A change that is genuinely temporary, applied evenly across the whole executive group, expressly contemplated by clear language you agreed to, or small in dollar terms is a much weaker case. Be honest with yourself about which one you have before you consider resigning.

Which limbs of the Employment Standards Act apply to a compensation cut?

Only one, and it requires you to resign first. Section 56(1) of the Employment Standards Act, 2000 says an employer terminates employment for the purposes of the notice provisions in three situations, and only clause (b) fits a pay cut: 'the employer constructively dismisses the employee and the employee resigns from his or her employment in response to that within a reasonable period'. Both halves must be satisfied.

Clause 56(1)(a) covers an employer that 'dismisses the employee or otherwise refuses or is unable to continue employing him or her'. An employer that cut your pay is still employing you, so that limb does not apply. Clause 56(1)(c) covers a lay-off longer than a temporary lay-off, and it is worth checking rather than assuming, because of how the Act counts a week.

Under s. 56(3.1), an employee who has a regular work week is laid off for a week if '(a) in that week, the employee earns less than one-half the amount he or she would earn at his or her regular rate in a regular work week; and (b) the week is not an excluded week'. So a cut of more than half your regular rate can begin to count as lay-off weeks even though you are still at your desk. Section 56(3) defines an excluded week as one during which, for one or more days, the employee is not able to work, is not available for work, is subject to a disciplinary suspension, or is not provided with work because of a strike or lock-out.

Section 56(2) then sets out what remains only temporary. Clause (a) is a lay-off of not more than 13 weeks in any period of 20 consecutive weeks. Clause (b) is a lay-off of more than 13 weeks in 20 but less than 35 weeks in any 52 consecutive weeks, if one of six conditions is met: (i) the employee continues to receive substantial payments from the employer; (ii) the employer continues to make payments for the employee's benefit under a legitimate retirement or pension plan or a legitimate group or employee insurance plan; (iii) the employee receives supplementary unemployment benefits; (iv) the employee is employed elsewhere and would be entitled to those benefits if that were not so; (v) the employer recalls the employee within the time approved by the Director; or (vi) for an employee not represented by a trade union, the employer recalls within the time set out in an agreement between the employer and the employee. Clause (c) covers a unionized employee laid off 35 or more weeks in 52 where the employer recalls within the time set out in the agreement with the union. Clause (d) covers a non-union employee laid off 35 or more weeks in 52 but less than 52 weeks in 78, if (i) the employer recalls within the time set out in an agreement with the employee, and (ii) the employer has received the Director's approval for an extended lay-off.

Subsections 56(3.2) to (3.8) handle the arithmetic. Excluded weeks are counted in the 20, 52 and 78 week windows even where they are not counted as lay-off weeks, and an employee without a regular work week is measured against one-half of the average weekly earnings in the 12 consecutive weeks preceding the relevant window, at thresholds of 13 weeks in 20, 35 weeks in 52 and 52 weeks in 78. Section 56(4) says a lay-off without a specified recall date is not a termination unless it exceeds a temporary lay-off, and s. 56(5) says that when a lay-off does become a termination, the employment is deemed terminated on the first day of the lay-off, which is a valuable date when you come to calculate what you are owed.

For most executives none of that machinery is engaged, because a cut of 20 or 30 per cent of cash does not take you below half your regular rate. That leaves s. 56(1)(b) and its trap: under the Act, nothing has been terminated until you resign in response, and you must do it within a reasonable period. See temporary layoff and constructive dismissal.

Severance pay works the same way with different numbers. Section 63(1) lists five ways an employer severs employment: (a) it dismisses the employee or otherwise refuses or is unable to continue employing the employee; (b) it constructively dismisses the employee and the employee resigns in response within a reasonable period; (c) it lays the employee off for 35 or more weeks in any 52 consecutive weeks, or beyond the expiry of a Director-approved extended lay-off; (d) it lays the employee off because of a permanent discontinuance of all of the employer's business at an establishment; or (e) it gives notice of termination, the employee gives at least two weeks' written notice before resigning, and that resignation takes effect during the statutory notice period. Section 63(2.1) sets the lay-off threshold for severance at earnings of less than one-quarter of a regular work week, not one-half, with the same excluded week definition in s. 63(2) and the same counting rules in ss. 63(2.2) to (2.4), and s. 63(3) deems a severance under clause (e) to occur on the day the employer's notice would have taken effect. Clauses (a), (c), (d) and (e) all require something your employer has not done. Clause (b) is the fit, and again it requires you to resign.

Section 54 confirms what a lawful ending looks like: no employer shall terminate an employee with three months or more of continuous employment unless the employer '(a) has given to the employee written notice of termination in accordance with section 57 or 58 and the notice has expired; or (b) has complied with section 61'. Cutting your compensation is neither of those things, which is precisely why it is a breach of contract rather than a termination.

Can my employer deduct or claw back compensation I have already earned?

Not by announcement, and usually not by payroll deduction either. Section 13(1) says an employer 'shall not withhold wages payable to an employee, make a deduction from an employee's wages or cause the employee to return his or her wages to the employer unless authorized to do so under this section'. There are only two authorizing routes, and both are narrow.

Section 13(2) permits it where a statute of Ontario or Canada or a court order authorizes it. Section 13(3) permits it with your written authorization. Section 13(4) removes both routes where the statute, order or authorization requires the employer to remit the money to a third person and the employer fails to do so. Section 13(5) then removes the written authorization route in three situations: (a) where your authorization 'does not refer to a specific amount or provide a formula from which a specific amount may be calculated'; (b) where the wages were withheld, deducted or required to be returned because of faulty work, or because the employer had a cash shortage or lost or stolen property and a person other than you had access to it, or under any prescribed conditions; and (c) where the wages required to be returned were the subject of an order under the Act. Section 13(6) confirms for greater certainty that a customer leaving an establishment without paying falls inside the second of those.

For an executive, s. 13(5)(a) is the one that matters. The blanket sentence in your offer letter saying you authorize the company to deduct any amounts owing to it does not refer to a specific amount and does not provide a formula, so it does not satisfy the section. A clawback of a bonus that has already been paid is a claim the company must make and prove, not a self-help remedy it can run through payroll. See clawback of bonus or equity already paid and pay deductions.

Timing is regulated too. Section 11(1) requires the employer to establish a recurring pay period and a recurring pay day and to pay 'all wages earned during each pay period, other than accruing vacation pay, no later than the pay day for that period'. Section 11(2) lists the permitted methods: cash, a cheque payable only to the employee, direct deposit in accordance with s. 11(4), or any other prescribed method. Section 11(3) requires cash or a cheque to be given at your workplace or another place you agree to. Section 11(4) permits direct deposit where the account is selected by you and in your name, no person other than you or someone you authorize has access to it, and the account meets any prescribed criteria. Section 11(5) requires that when employment ends, wages be paid no later than the later of seven days after it ends and what would have been your next pay day. The point for you is that a cut applied to work already performed is not an amendment at all; it is a failure to pay wages earned in that pay period.

What happens if I just keep working and say nothing?

You are very likely to be taken to have accepted the new terms. Acceptance of a contractual change can be shown by conduct, and continuing to work and be paid on the reduced basis, without objection, across a series of pay periods is exactly the conduct a court looks for. Silence through a full bonus cycle is close to fatal to the claim.

There is a second clock. Both s. 56(1)(b) and s. 63(1)(b) require you to resign in response to the constructive dismissal 'within a reasonable period'. Neither section defines it. In practice a reasonable period is measured in weeks or a few months, not years, and it runs from when you knew about the change and had enough information to evaluate it. Time spent getting legal advice, or waiting for a written answer you have formally requested, is far easier to justify than time spent hoping.

There is a third clock, the two year limitation period for a civil claim, but it matters much less in practice, because condonation will usually have killed the claim long before the limitation period expires. See condonation and limitation periods for a wrongful dismissal claim.

Watch the mechanics of acceptance in modern plans. Clicking to acknowledge a new grant that says 'this award is governed by the amended plan', signing an annual total compensation statement, or accepting a fresh offer letter for the job you already have will each convert a change you never wanted into a change you agreed to. Read before you click. See a bonus plan amendment you never signed.

If I reject the cut and keep working, what will my employer do next?

It has two lawful moves, and one of them is very expensive for it. Under Wronko v. Western Inventory Service Ltd., 2008 ONCA 327, if you make clear that you do not accept the change and the employer permits you to keep working, the employer is held to the original terms. If it will not live with that, it must terminate the existing contract on proper notice and offer you re-employment on the new terms when that notice expires.

That is why the third option has teeth. Proper notice does not mean two weeks. For a senior manager or executive it means common law reasonable notice, assessed on the factors in Bardal v. Globe & Mail Ltd., 1960 CanLII 294 (ON SC): the character of the employment, length of service, age, and the availability of similar employment having regard to your experience, training and qualifications. Seniority and long service push the number up, and Dawe v. The Equitable Life Insurance Company of Canada, 2019 ONCA 512 upheld 24 months for an older long service employee, while Lowndes v. Summit Ford Sales Ltd., 2006 CanLII 14 (ON CA) confirms only exceptional circumstances support a base notice period above 24 months. Short service is not the discount employers assume: in Love v. Acuity Investment Management Inc., 2011 ONCA 130 a senior vice president with only 2.5 years of service received 9 months, because character of employment and equity participation make comparable work harder to find and short service must not be over-weighted.

So an employer that wants to impose a cut on a twelve year vice president has to be willing to serve something in the range of fifteen to twenty months of working notice, during which your existing compensation continues in full and you are still in the building. Most employers will not do that. This is why a clear written objection so often produces a negotiation rather than a notice letter.

Do not assume your written contract shortens that notice. Machtinger v. HOJ Industries Ltd., [1992] 1 SCR 986 holds that where a termination clause is invalid, the common law presumption of reasonable notice revives. Waksdale v. Swegon North America Inc., 2020 ONCA 391 holds that one offside limb voids the termination provisions as a whole. Rahman v. Cannon Design Architecture Inc., 2022 ONCA 451 holds that an executive's sophistication and independent legal advice do not save a clause that offends the Act, and that a parent company which directs, pays and pools the executive can be a common employer. Celestini v. Shoplogix Inc., 2023 ONCA 131 is a reminder that where your duties and responsibilities have changed substantially since you signed, the original agreement may no longer govern at all. See is my termination clause enforceable and executive severance and notice.

How is each component of my package treated if this ends in a dismissal?

The default is that you are entitled to be put in the position you would have been in had you worked through the notice period, component by component. That covers salary, bonus, long term incentives, pension accrual, benefits and perquisites. The employer's only escape is contractual language that unambiguously removes the entitlement, and the bar for that language is high.

One detail routinely left out of employer calculations: vacation pay. Bain v. UBS Securities Canada Inc., 2018 ONCA 190 confirms that vacation pay is calculated on a bonus that is tied to production. On a six figure bonus that is real money. See benefits, car allowance and perquisites over the notice period.

What does the length of the notice period actually change in dollars?

For an executive it is the single biggest number in the file, because every component of the package runs for the same number of months. Here is a worked illustration on round figures. Assume a vice president, age 52, nine years of service, base salary of $260,000, target bonus of 50 per cent ($130,000), annual RSU grants where one tranche worth $80,000 vests each year, employer pension contributions of 8 per cent of base ($20,800), a car allowance of $12,000, and benefits with a replacement cost of $9,000 a year.

The gap between the two columns is about $439,800. Now compare the eighteen month figure with the offer this executive is most likely to receive on day one, which is eight months of base salary alone, roughly $173,300. The distance between the opening offer and a fully valued claim is more than $630,000. That is the whole argument, and it is why the dispute about whether the number is eight months or eighteen is never really about months.

Two refinements matter to that arithmetic. Andros v. Colliers Macaulay Nicolls Inc., 2019 ONCA 679 confirms that a pro rata bonus is recoverable for the year worked and the notice period even where the payout date falls after the notice period ends. Bain v. UBS Securities Canada Inc., 2018 ONCA 190 confirms that a deferred component earned during the notice period can be recovered even though it would have vested afterwards. See valuing equity vesting during the notice period.

Which words in my plan documents decide whether I keep the bonus and the equity?

A small number of phrases do almost all the work, and the courts have already ruled on most of them. Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26 sets the two part test: would you have received the bonus or the award as part of your compensation during the reasonable notice period, and if so, does the plan wording unambiguously remove that common law right. Most plans fail the second part.

O'Reilly v. IMAX Corporation, 2019 ONCA 991 is a useful companion on how a senior executive's full incentive entitlement is assessed across the notice period. See RSUs and stock options after termination and a discretionary bonus over the notice period.

Does the Employment Standards Act protect my compensation during the notice period?

Yes, and this is the part of the statute that bites hardest on equity plans. Section 60(1) provides that during a notice period the employer '(a) shall not reduce the employee's wage rate or alter any other term or condition of employment'; '(b) shall in each week pay the employee the wages the employee is entitled to receive, which in no case shall be less than his or her regular wages for a regular work week'; and '(c) shall continue to make whatever benefit plan contributions would be required to be made in order to maintain the employee's benefits under the plan until the end of the notice period'.

Section 60(2) deals with an employee who has no regular work week or who is paid on a basis other than time, requiring payment of the average weekly regular wages earned in the twelve weeks the employee worked immediately preceding the day notice was given. That is the provision that applies to a commissioned or production based executive. Section 60(3) deems a failure to make the benefit plan contributions required by clause (1)(c) to be unpaid wages for enforcement purposes, and s. 60(4) preserves any entitlement you may have under the benefit plan itself, so the statutory remedy sits on top of your rights under the policy rather than replacing them.

Wigdor v. Facebook Canada Ltd., 2026 ONCA 572 is a recent decision (August 2026) applying that language to equity. RSUs worth about US$4.7 million that would have vested during a ten month notice period were recoverable, clauses ending vesting on termination were held void because s. 60(1)(a) forbids altering any term or condition of employment during the statutory notice period, and that protection was carried into the pay in lieu of notice provision. The court also held that a counsel negotiated agreement gets no lesser standard of clarity, and distinguished Mikelsteins v. Morrison Hershfield Limited, 2021 ONCA 155 on the basis that those shares were bought with the employee's own money. Because it is recent, treat it as strong rather than beyond argument. Note also that the statutory notice period is short next to common law reasonable notice, so this is a floor your employer cannot contract out of rather than the whole claim. See equity compensation and the statutory notice period.

What should I be looking for in my own documents right now?

The plan document and the individual grant agreement are usually two different documents with different wording, and the one that helps you is often the one you have never read. Pull both, for every outstanding award. Then look for these specific things, because each of them moves the number.

• The vesting schedule. Write out every unvested tranche with its date and its value. The tranches falling inside a realistic notice period are the claim. See terminated weeks before a vesting date.
• The 'actively employed' or 'good standing' payout condition. Where the condition is employment on the payment date, Paquette v. TeraGo Networks Inc., 2016 ONCA 618 and Andros v. Colliers Macaulay Nicolls Inc., 2019 ONCA 679 mean it probably does not defeat a damages claim.
• The forfeiture language, and whether it distinguishes cause from without cause. Wording ending vesting on the termination date regardless of any notice or pay in lieu is what employers rely on, and it is what Wigdor v. Facebook Canada Ltd., 2026 ONCA 572 attacked for the statutory notice period.
• The good leaver and bad leaver definitions. These decide whether unvested awards lapse, continue, or accelerate. Check whether termination without cause is a good leaver event, whether retirement eligibility (usually an age plus service formula) changes the answer, and whether any resignation, including a resignation in response to a constructive dismissal, is treated as bad leaver. That last point is a live reason not to resign before you have advice. See good leaver and bad leaver.
• Change of control language. Single trigger or double trigger, what counts as a control event, and whether a reorganisation of your business unit qualifies. If a transaction is coming, the timing of your exit may be worth more than the notice period.
• The amendment power. Most plans say the committee may amend at any time. Read whether that power is limited by a clause protecting outstanding awards, and remember that a power to amend the plan is not a power to amend your employment contract. Lin v. Ontario Teachers' Pension Plan, 2016 ONCA 619 held forfeiture amendments the employees refused to sign never became part of the contract.
• The clawback or recoupment policy. Note the trigger (a restatement, misconduct, competitive activity), the look back period, and whether the company purports to recover by payroll deduction, which runs straight into s. 13 of the Act.
• Forfeiture on 'competitive activity'. A forfeiture triggered by joining a competitor is a restrictive covenant in different clothing. Elsley v. J.G. Collins Insurance Agencies Ltd., [1978] 2 SCR 916 and Shafron v. KRG Insurance Brokers (Western) Inc., 2009 SCC 6 confirm courts will not rewrite an overbroad clause to save it. See non-solicitation agreements.
• Pension, SERP and deferred compensation. Look for active service accrual wording and any clause saying benefits shall not be used to increase damages, both of which failed in Taggart v. Canada Life Assurance Company, 2006 CanLII 53345 (ON CA). See SERP and deferred compensation.
• Any release you are asked to sign. A release normally extinguishes everything, including a disability claim you may not yet know you have. Swampillai v. Royal & Sun Alliance Insurance Company of Canada, 2018 ONSC 4023, aff'd 2019 ONCA 201 shows a release can be set aside as unconscionable on the right facts, and Uber Technologies Inc. v. Heller, 2020 SCC 16 restates the doctrine, but do not plan around it. See should I sign the release.
• Whether any of your holding was bought with your own money. Mikelsteins v. Morrison Hershfield Limited, 2021 ONCA 155 treated purchased shares under a shareholders' agreement as shareholder rights, with buy-back running from the termination date. Purchased equity and granted equity may be treated very differently in the same file.

If I resign and sue, do I have to look for another job, and could I be made to go back?

Yes to the first, and possibly to the second. Damages for constructive dismissal are reduced by what you earn or reasonably could have earned during the notice period. Evans v. Teamsters Local Union No. 31, 2008 SCC 20 goes further: in some cases an employee is expected to mitigate by accepting continued employment with the same employer, where a reasonable person would accept it and the relationship is not poisoned by acrimony, hostility or humiliation.

That is the sharpest argument against a dramatic resignation. If you walk out over a compensation cut and your employer can show you were offered the same office, the same colleagues and work you could perform without loss of dignity, a court may find you should have stayed and worked while you looked. The cleanest answer is the third option in Wronko: reject in writing and keep working, which answers the mitigation question before it is asked and keeps your income while the file is valued.

If you do take a materially lesser role elsewhere, Brake v. PJ-M2R Restaurant Inc., 2017 ONCA 402 supports the argument that earnings from a substantially inferior job should not be deducted from your damages. And if you are considering resigning, remember that a resignation must be clear and unequivocal, as Kieran v. Ingram Micro Inc., 2004 CanLII 4852 (ON CA) confirms; an ambiguous exit helps nobody. See duty to mitigate, accepting a demotion and mitigation and forced resignation.

Can they retaliate if I object, and does anything change if I am unionized or federally regulated?

Objecting to unpaid wages or an unlawful deduction is protected, and the employer carries the burden of disproving reprisal. Section 74(1) says no employer or person acting on behalf of an employer 'shall intimidate, dismiss or otherwise penalize an employee or threaten to do so' for the reasons listed, and s. 74(2) places the burden of proving that it did not contravene the section on the employer.

The limbs that can apply to you are s. 74(1)(a)(i), asking the employer to comply with the Act; (ii), making inquiries about your rights under it; (iii), filing a complaint with the Ministry; (iv), exercising or attempting to exercise a right under it; (v), giving information to an employment standards officer; and (vi), testifying or otherwise participating in a proceeding under it. The remaining limbs will not usually be in play on these facts: (v.1) and (v.2) concern inquiries about, or disclosure of, rates of pay for equal pay purposes; (vii) concerns proceedings about a by-law under the Retail Business Holidays Act; (viii) concerns eligibility for, intending to take, or taking a statutory leave; (ix) concerns inquiries about temporary help agency or recruiter licensing; and clause (b) concerns a court order or garnishment requiring payment to a third party. Note the boundary: s. 74 protects the exercise of rights under the Act, so a purely contractual objection to a bonus cut is not automatically covered. Framing your letter around wages payable and the deduction rules is not only better drafting, it is protective.

Two jurisdictional points. If you are covered by a collective agreement, Weber v. Ontario Hydro, [1995] 2 SCR 929 gives arbitration exclusive jurisdiction over disputes arising from that agreement, and the Employment Standards Act complaint route is closed to you as well, so the route is a grievance and not a civil claim. See unionized employee rights. If your employer is federally regulated (a bank, airline, railway, telecommunications carrier, interprovincial trucking company), the Employment Standards Act does not apply to you at all and the Canada Labour Code does. Wilson v. Atomic Energy of Canada Ltd., 2016 SCC 29 held the Code's unjust dismissal regime displaces dismissal on notice, but that regime does not extend to managers, so a federally regulated executive normally proceeds by civil action. See federally regulated employee rights.

If the cut was applied to you and not to comparable colleagues because of age, disability, a leave, pregnancy or another protected ground, the Human Rights Code is engaged, but note s. 46.1(2): the Code does not permit a civil action founded solely on an infringement of it, so Code damages must ride inside another cause of action such as a wrongful or constructive dismissal claim. And if the handling of this has made you unwell, be careful how any claim is framed. Section 28(1) of the Workplace Safety and Insurance Act, 1997 bars a worker of a Schedule 1 employer from commencing an action against that employer in respect of the worker's injury or disease, and s. 13(4) makes chronic and traumatic mental stress compensable, which brings psychological injury inside that bar. The narrow survivor is s. 13(5), which excludes stress caused by the employer's decisions about the employment, including decisions to change your work or working conditions, to discipline, or to terminate. A unilateral compensation cut is an employment decision, so it usually falls on the s. 13(5) side of the line, but that is a question to settle at the outset rather than after a claim is issued.

Where the employer's conduct crosses from hard bargaining into dishonesty or humiliation, damages for the manner of dismissal are available on the framework in Honda Canada Inc. v. Keays, 2008 SCC 39, which grew out of Wallace v. United Grain Growers Ltd., [1997] 3 SCR 701, and punitive damages are possible where the treatment was egregious, as in Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419. Note that Merrifield v. Canada (Attorney General), 2019 ONCA 205 held there is no independent tort of harassment in Ontario, so these are the routes rather than a standalone harassment action. See bad faith dismissal damages.

Should I file an Employment Standards complaint or sue?

For a large package, almost never the complaint, and it is a decision you get to make only once. Section 97(1) says an employee who files a complaint with respect to an alleged failure to pay wages or to comply with the benefit plan provisions 'may not commence a civil proceeding with respect to the same matter'. Section 97(2) says a complaint alleging entitlement to termination pay or severance pay bars a civil wrongful dismissal proceeding relating to the same termination or severance.

Section 97(3) has been repealed. Section 97(4) is the only escape hatch: despite subsections (1) and (2), you may still commence a civil proceeding if you withdraw the complaint within two weeks after it is filed. Two weeks is short, and it runs from filing, not from the day you realise the mistake.

The consequence is stark for a senior manager or executive. The statutory entitlements are minimums calculated on a capped formula against your base wages, while your real claim is common law reasonable notice across the entire package: salary, bonus, equity vesting, pension accrual, benefits and perquisites. Filing a complaint to get something moving can trade a claim worth several hundred thousand dollars for the statutory floor. Get advice before you file anything with anyone.

What should I do in the next two weeks?

Preserve the position, preserve the documents, and do not resign. Everything below can be done while you keep working, keep performing, and keep being paid. The order matters, because the cheapest steps are also the ones that expire fastest.

1. 1.Do not click accept on anything: not a new grant, not an amended plan, not a revised offer letter, not an annual compensation statement.
2. 2.Write down the exact date you were told about the cut and how you were told, because the reasonable period in ss. 56(1)(b) and 63(1)(b) runs from then.
3. 3.Save the announcement, the memo, the deck and the email chain, and keep your own copy of the correspondence you send and receive.
4. 4.Print or download your current plan documents and every outstanding grant agreement while you still have portal access.
5. 5.Send a short written objection that does not resign and reserves your rights, addressed to your manager and to HR.
6. 6.Ask, in writing, whether the company will confirm that your existing terms continue, and if not, whether it is giving notice of termination of your existing contract.
7. 7.Keep working and keep your performance record clean, because a cause allegation made under an ethical cloud is exactly what lengthened notice to 15 months in Lin v. Ontario Teachers' Pension Plan, 2016 ONCA 619.
8. 8.Have the package valued over a realistic notice period, component by component, before you discuss numbers with anyone internally.
9. 9.Do not file an Employment Standards complaint, because s. 97(2) will bar the civil claim and s. 97(4) gives you only two weeks to undo it.
10. 10.Get legal advice before you resign, and before you sign any release.

A short protest beats a long one. Something close to this is usually enough: 'I do not accept the change to my compensation communicated on [date]. I am continuing to work under the terms of my existing agreement and I reserve all of my rights, including in respect of my outstanding incentive awards. Please confirm in writing that my base salary, target bonus and existing grants are unchanged.' Keep it factual, keep it unemotional, and keep a copy.

What documents should I gather, and what should I ask?

Gather everything that set the terms and everything that changed them. A compensation claim is won on documents, and yours are spread across five places: your offer letter and its amendments, the equity portal, the pension administrator, the benefits booklet, and your email. Collect these before you say anything more.

• The original offer letter and the signed employment agreement, plus every promotion, retention and amendment letter since.
• The termination clause in whatever agreement the company says governs, and the date you signed each version.
• The short term incentive plan document and the annual award letters, which frequently use different wording from each other.
• The long term incentive plan document and each individual grant agreement, with the vesting schedule for every outstanding tranche.
• Any change of control agreement, retention agreement, or executive severance policy.
• The pension plan text or DC plan summary, any SERP or deferred compensation agreement, and your most recent statement.
• The benefits booklet, including the definitions in the long term disability policy and the date coverage would end.
• The clawback or recoupment policy and any code of conduct provision referenced in it.
• Any restrictive covenant, non-solicitation or confidentiality agreement, and any equity forfeiture tied to competitive activity.
• The announcement or memo imposing the cut, with its date, plus any acceptance screens, e-signature audit trail or acknowledgement you were asked to click.
• Total compensation statements, T4s and bonus payout letters for the last three years, which is how a realistic bonus figure gets proven.
• Performance reviews and organization charts before and after the change, which show whether your role moved as well as your pay.

Then ask these questions in writing, and keep the answers, because they will either fix the problem or build the file.

• Is the change permanent or temporary, and if temporary, on what date does the previous arrangement resume?
• Is the same change being applied to everyone at my level, and if not, why not to them?
• Which document does the company say governs my incentive compensation, the plan or my individual grant agreement?
• Does the company accept that my outstanding grants and their vesting schedules are unaffected by this change?
• Will the company confirm in writing that my base salary and target bonus remain as set out in my agreement?
• If the company will not confirm that, is it giving notice of termination of my existing contract and offering re-employment on new terms?
• If so, what notice period is proposed, and will my compensation and equity vesting continue in full throughout it?
• What consideration is being offered in exchange for my agreement to the new terms?

About the Author

Daniel Carter

Legal Writer, Mirza Law

Daniel Carter is a legal writer at Mirza Law in Toronto. He writes about layoffs, employment contracts, and the steps to take before you sign anything from your employer.

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