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I work for an American company but I’m based in Canada. For the last 12 years, I have been using my own vehicle as a salesperson with my company, and now they have announced a “mandatory” company car program. I have been told it’s a requirement for continued employment.

Is this kind of mandate allowed in Canada? I’m sure it works out better for them, as they currently reimburse up to a certain amount of mileage charges to offset vehicle costs. However, it’s not enough to cover everything, so they’re effectively taking away an expense to saddle me with a taxable benefit. On top of that, I will incur parking costs (because I live in an apartment), along with storage costs for the (mandatory) winter tires. I have offered to give up any reimbursement to continue on with my own car; my company has refused to compromise. What can I do?


Cynthia Lazar, lawyer and workplace investigator, Taylor McCaffrey LLP, Winnipeg

Your current arrangement is something that you and your employer have agreed upon. If the employer imposes a change to a term or condition of your employment without your consent, and the term or condition is “essential,” then you may consider yourself to be constructively dismissed. If you are dismissed, you will be entitled to “reasonable notice” (working notice) or pay in lieu of reasonable notice, and your employment relationship will be permanently severed. What is “reasonable” will depend on your personal circumstances.

However, if your employer has already given you advance notice of the change equivalent to the length of “reasonable notice” you would be entitled to on termination, then you will not be entitled to further notice or pay. For example, if in your circumstances one month’s notice would be reasonable, and the employer has told you that the policy will take effect one month from now, you will have no further recourse.

To determine whether this is an “essential” term or condition of employment you should consider several factors. Will your employer pay for your parking? Will the employer pay for the winter tires? Will it either pay for storage or provide storage facilities? If the end result of the new arrangement is cost-neutral for you, or close to it, it is likely not an essential term or condition.

If there is a union at your workplace, other rules may apply and you should consult with your union representative.


Niiti Simmonds, partner, Cavalluzzo LLP, Toronto

Employers can make mid-stream changes to your employment contract, including to your compensation, within limits. Calculate the value of the change. When you balance everything, does the introduction of the car program reduce your compensation by more than 20 per cent?

If the employer’s car program reduces your compensation by 20 per cent or more, speak to an employment lawyer about whether you have been “constructively dismissed.” Claiming constructive dismissal allows you to treat the employment relationship at an end and claim a severance package based on either your contractual or common law entitlements. You might have signed an enforceable contract limiting your entitlements upon termination. Don’t delay in speaking to a lawyer as there can be time limits to objecting to the change. Claiming constructive dismissal is not always straightforward. In some cases, you may be required to mitigate your losses by working for the employer for the duration of the notice period.

Consider your goals: is it continued employment with the company, or the option to treat the contract as ended and to pursue a severance package?

If the change to your compensation is nominal, or less than 20 per cent, then your option is to negotiate, or else start to look for another job. While the employer may be unwilling to exempt you from its mandatory company policy, it may be willing to compromise on other elements of your compensation. You could request a pay raise to make up for your losses arising from the change. If there are other affected employees, even assuming you don’t have a union, it may be worth speaking to your colleagues to raise the issue together.

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