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Unlimited Paid Time Off Policies – Proceed with Caution!

Unlimited Paid Time Off Policies - Proceed with Caution!We’ve been hearing about unlimited paid time off  (PTO) for some time, but it is not yet a common trend in Canada. However, from time to time in our employment law practice, we encounter employers who offer unlimited or unstructured time off to their employees.

At first glance,  unlimited PTO may sound wonderful and generous, and employers may offer it to foster a positive workplace culture and promote work-life balance. However,  without addressing potential issues via contracts and policies, offering unlimited and unstructured time off could cause more headaches than benefits for both the employers and the employees. 

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Firing Employees with 2 Weeks of Notice May be Insufficient

We’ve written about terminations in several of our blog posts throughout the years. Some of our employer readers (and clients) may recall scrambling to update their employment contracts following the 2020 release of Waksdale v. Swegon North America Inc. (2020 ONCA 391). Still, many employers who are seeking to terminate their indefinite-term employees on a without cause basis believe that as long as they provide their employees with 2 weeks of notice, or the period of notice set out in the Employment Standards Act, 2000, they are off the hook. More often than not, this notice period is legally insufficient. So, what is the applicable notice period? 

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Termination Payments and Repaying Government Benefits – EI, CERB and CRB

Terminated employees receiving government benefitsOver the course of the past year, many people have had reductions in earnings and received some form of government income assistance – EI, CERB or Canada Recovery Benefit (CRB).

In some cases, employees who initially thought that their interruption or reduction in earnings was temporary have had their employment terminated. 

In almost all termination situations an employee will be entitled to some form of termination payment from the employer. Employees who are also receiving government income assistance may wonder how their government payments will be impacted by their termination packages. 

While not everything is crystal clear at this point, we have some thoughts!

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The Impact of the Pandemic on Termination Packages

impact of covid-19 on terminations

Photo by kate.sade on Unsplash

The Covid-19 pandemic has changed our economy. In many industries, it has made it more difficult to find work and also more difficult for businesses to afford termination packages when letting employees go. The relevance of these facts to how courts will determine what terminated employees are entitled to has, so far, been unclear. 

Reasonable Notice

When an employment relationship is not governed by a written contract – with valid termination provisions – a terminated employee’s entitlements on termination without cause will be determined by the common law and what is called reasonable notice. 

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