Can My Employer Change My Commission or Bonus Plan in Ontario?
If a big part of your pay is commission or bonus, a change to how it is calculated can be a constructive dismissal. Here is when a comp-plan change crosses the line.
Key takeaways
- A significant, unilateral change to your pay structure can be a constructive dismissal.
- Commission and bonus are part of your compensation, not optional extras.
- Minor changes, or ones your contract clearly permits, usually are not enough.
- You generally must object within a reasonable time, not just carry on silently.
- If it is a constructive dismissal, you may be owed full severance.
In this article
For a lot of sales and incentive-paid employees, the base salary is only part of the story. When an employer rewrites the commission grid, caps the bonus, changes the territory, or moves the targets, your real income can drop sharply even though your title and base stay the same. In Ontario, a serious change like that can be a constructive dismissal. Here is where the line falls.
✅Quick answer. Your commission and bonus are part of your compensation, and a significant, unilateral change to how they are calculated can amount to a constructive dismissal, which entitles you to severance as if you were fired. The key words are significant and unilateral. A minor adjustment, or a change your contract clearly and genuinely allows, usually is not enough. And timing matters: if you keep working under the new plan without objecting for too long, you can be treated as having accepted it. So you generally need to object within a reasonable time.
Why a pay-plan change can be a dismissal
A constructive dismissal happens when an employer makes a fundamental, unilateral change to a core term of your employment. Compensation is about as core as it gets. If the change substantially reduces your realistic earnings, for example slashing a commission rate, imposing a cap you never had, or gutting your territory or accounts, courts can treat it as the employer effectively ending the old contract. You did not resign. The employer changed the deal.
What crosses the line, and what does not
- Likely constructive dismissal: a large cut to your commission rate, a new cap that sharply lowers your ceiling, removal of major accounts or territory, or replacing a reliable bonus with a discretionary one that effectively disappears.
- Usually not enough on its own: a small tweak to the plan, a change that leaves your realistic earnings roughly the same, or a routine annual adjustment within normal bounds.
- Depends on the contract: if your agreement genuinely and clearly reserves the right to change the plan, that can weaken a claim, though vague or unfair clauses do not give employers a blank cheque.
Why your response and its timing matter
You cannot both keep quietly working under the new plan indefinitely and later claim you were constructively dismissed by it. If you intend to treat the change as a dismissal, you generally need to object within a reasonable time. At the same time, you do not have to decide in a panic. You can raise the issue, ask questions, and get advice. The safest move is to register your objection clearly rather than silently absorbing a pay cut you did not agree to.
What should you do if your plan is changed?
- 1.Compare your realistic earnings before and after the change to gauge how big it really is.
- 2.Check your contract for any genuine right to alter the plan.
- 3.Object in writing rather than silently working under the new terms.
- 4.Get advice quickly, since both a constructive dismissal claim and your response have timing considerations.
A comp change is one of several ways an employer can constructively dismiss you. See constructive dismissal from a pay or hours cut and how commissions factor into severance, and if your pay was cut without your agreement, get a severance review. For the bigger picture, see severance pay in Ontario.
Frequently asked questions
Can my employer change my commission plan in Ontario?
They can propose changes, but a significant, unilateral change that substantially reduces your realistic earnings can be a constructive dismissal, entitling you to severance. Minor changes, or ones your contract clearly allows, usually are not enough.
Is cutting my bonus a constructive dismissal?
It can be, if the bonus is a real part of your compensation and the change substantially reduces what you can earn. Replacing a reliable bonus with a discretionary one that effectively vanishes is a common example worth reviewing.
What should I do if I do not agree with the change?
Object in writing within a reasonable time rather than silently working under the new plan, because continuing without objection for too long can be treated as accepting it. Then get advice on whether it amounts to a constructive dismissal.
What if my contract says they can change the plan?
A genuine, clear right to change the plan can weaken a claim, but vague or unfair clauses do not give employers a blank cheque to slash your pay. It is worth having the clause and the change reviewed together.
Marcus Bello
Legal Writer, Mirza Law
Marcus Bello is a legal writer at Mirza Law in Toronto.
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