Communicating benefits? Be cautious (On Law)

Simply handing out information isn’t enough – employees must understand benefits
By Mary Picard
|Canadian HR Reporter|Last Updated: 10/29/2008

Employment benefits and rewards programs are a common and effective way of recruiting and retaining employees, but employers must be cautious. There are legal pitfalls that can come up for employers explaining what they offer if an employee doesn’t grasp the details.

The Supreme Court of Canada has said the employment relationship is a “special relationship,” characterized by a power imbalance in which the employer has the upper hand. Judges have often applied that principle and held employers liable when employees have not fully understood the terms of their benefit programs.

Employer liability has been found even when the employer has given accurate information or urged employees to seek independent advice. That’s not enough, the judges say, in this “special relationship.”