Cost-cutting measures could be on agenda for HR, but risks of constructive dismissal claims, non-compliance should be taken into account, along with best practices, say lawyers
With all the uncertainty in the air these days, many Canadian employers are looking at how to contain or cut costs.
That could mean temporary layoffs, work-sharing arrangements or reduced hours. It could also mean making changes to employee benefit plans.
But there are both legal and best practice considerations to take into account, say three experts talking to Canadian HR Reporter.
The biggest distinction, as it relates to the employment relationship, is whether employees are unionized or not, says Mathias Link, partner at Fasken in Toronto.
“If you're unionized... it's much more difficult to make changes to benefit plans that negatively affect employees. So, whether it's reducing or eliminating STD or LTD, scaling back on paramedical, something like that, really, what the parties agree to in the collective agreement is going to dictate what you can do.”
For non-unionized employees, the real risk in making changes to benefits that are in the negative — so taking away as opposed to giving more — is that it gives rise to a potential claim for constructive dismissal, he says.
“When you're trying to reduce costs, you may think, ‘Okay, well, I'll leave the salary or the hourly wage alone, but I'll just achieve some cost savings through reducing benefits.’ Well,...
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