In Wronko v. Western Inventory Service
Ltd.,1 the Ontario Court of Appeal held that an
employer cannot unilaterally change a fundamental term of
employment if the employee refuses to accept the proposed
change – even if the employer provides reasonable
notice of the change. This decision restricts the ability of
companies to change pension and benefit plan terms and other
terms of employment.
Darrell Wronko was employed by Western Inventory Service
Ltd. under an agreement that entitled him to two years'
salary on termination of employment. Western proposed a new
agreement that reduced Wronko's termination
entitlement. Wronko rejected the new agreement. Western then
gave Wronko notice that the new agreement would take effect in
two years. Wronko continued to work for Western during the
two-year notice period and continued to reject the new
agreement. After the notice period ended, Western told Wronko
that the new agreement had come into effect and that if he did
not accept it, his employment would be terminated. Wronko
brought a claim for wrongful dismissal.
Implementing a Change to a Fundamental Term of
Employers should now consider the following when making
changes to terms of employment:
Seek legal advice before making any changes to employment
terms that could be fundamental.
Give reasonable written notice of a change to terms of
employment whether the terms of employment are oral or
written and whether they are in an agreement or a pension or
Carefully consider whether to seek express consent to the
change or to rely on the employee's acquiescence.
Express consent provides certainty and comfort to the
employer, but it also provides an opportunity for an employee
to reject the change. Even a failure to sign back a consent
could be interpreted by the courts as a rejection of the
Since an employee who rejects a change to a fundamental
term of employment may not be subject to the change, consider
giving the employee notice of termination (or payment in
lieu) and, if desired, re-hire the employee on the new
1.  O.J. No. 1589 (Ont. C.A.).
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