Can my employer reduce my benefits?

Can my employer reduce my benefits?

Employment benefits are compensation that an employee may be granted that is not included in their wages. This type of compensation may be comprised of healthcare, pension, or even gym memberships.

In Ontario, the government must provide benefits to all employees. This can be referred to as legislated benefits because they are guaranteed by law. These benefits include Employment Insurance, Workplace Insurance Coverage, and the Canadian Pension Plan.

Employers are not required to supply benefit plans. If employers choose to provide benefit plans, they must adhere to the guidelines laid out in the Employment Standards Act (ESA) to avoid discrimination at the workplace. Benefits provided by an employer are called competitive employee benefits. These benefits could include dental insurance, vision care, paid sick days, and many more. For employers, it is favourable to provide additional benefits to their employees because it may establish them as a competitive employer, which gives them the opportunity to recruit and retain talented and skilled employees.

Can the employer ever reduce the benefit plan provided to the employee?

An employer cannot usually make changes to employment terms that only affect one person or group. If the employer makes changes to the employment terms that were promised, it could be considered a constructive dismissal. For the changes to potentially result in a constructive dismissal claim, the employer would have made significant modifications that were central to the employment relationship.

If the employer wishes to make modifications to an employee’s benefits, they must provide a reasonable amount of notice. This gives the employee time to review the changes, seek guidance from a lawyer, and decide whether these changes are acceptable.

It is important to understand whether the employer can make these changes within the original Employment Contract. If the Employment Contract had stated that a reduction of benefits for reasons laid out in the contract are permissible, then these adjustments may be reasonable.

If your employer recently made changes or reduced your benefit plan, please contact KCY at LAW by filling in an online consultation request or contact us by phone at 905-639-0999 to book your consultation today.