Threatening to deduct damages from an employee’s pay-packet could be enough to warrant constructive dismissal, as a recent decision by the British Columbia Supreme Court
Employee Ralph Rothberger was working for Concord Excavating & Contracting when the equipment he was operating suffered damage, resulting in delays and knock-on costs. Following a few similar instances, the employer included a note in Rotherberger’s pay slip, suggesting that if there was any further damage to the equipment, a deduction would be made from his wages.
Rothburger raised the issue with his Concord’s principal but, according to the lawsuit, his concerns were simply “brushed off.”
However, the savvy employee clearly knew his rights – under the B.C Employment Standards Act, business costs cannot be deducted from a worker’s wage – and Rothburger was compelled to leave a copy of the relevant passage in the principal’s mailbox.
In an entirely inappropriate response, the principal’s wife then sent a threatening email to Rothburger, in which she referenced a prior employee who had left the company under "unhappy circumstances". The email also implied that Concord’s legal team would get involved if Rothburger complained further.
Upon receiving the email, an understandably irate Rothburger walked off the jobsite and filed a lawsuit for constructive dismissal, arguing that the note on his pay slip, coupled with the threatening email, amounted to a change in the terms of his employment and a constructive dismissal.
The Court decided that the combined effect of both the note and the threatening email amounted to constructive dismissal, entitling Rothburger to damages.
“An employer is prohibited from deducting money from an employee's wages to recover a business loss caused by an act or omission of the employee,” says labour lawyer Ashley Mitchell.
“In some provinces, this is the law even if the employee consents to the deduction. The purpose of this law is to ensure that employees are paid for the services they provide,” she explains.
“Employers should think twice before threatening or making any deductions from wages to recover business costs, including those associated with loss or damage to company property,” warns Mitchell.
“These deductions may not only violate employment standards legislation, but may also be considered constructive dismissal,” she adds.
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