Crescent(1952) v. Jones is a case where Palmer sells his company (Crescent) to Jones. Palmer agrees to continue to work for Jones during a transition period. There is a hold-back on the total monies that Jones pays for Crescent, so that Jones can make sure that the Crescent earnings are what was promised.
Jones changes the way that employees (including Palmer) are compensated. Though still commission-based there are changes that increase the risk to the employee. The previous ‘guaranteed draw’ disappeared. The employee was now responsible for bad debts and receivables.
The court determined that this constituted constructive dismissal. The employer had alleged resignation. Resignation was determined to have occurred as a consequence of the constructive dismissal (para 74-75).
Takeaways for employers: Like a mouse that can’t resist the cheese, the employer will say ‘resignation’ every time and once again the court will shut the door on the resignation defence where resignation takes place in the context of a change in compensation.
