A costly disability gamble

Termination of LTD benefits before the reasonable notice period is up could end up costing an employer more in the long run
By Nikolay Chsherbinin
|Canadian Employment Law Today|Last Updated: 06/01/2011

Banking on health during notice

Employers have certain financial obligations to dismissed employees which are designed to help the employee get through a period of unemployment until they can find comparable work again. Though employment standards legislation outline minimum required notice periods, it’s fairly common knowledge that longer-term employees are usually entitled to longer notice periods as have been established by courts and adjudicators. However, it’s not just the basic paycheque employers are responsible for.

While on the job, employees can also enjoy various benefits and protections, such as short-term and long-term disability insurance for if they become disabled and can’t work. Since the reasonable notice period is supposed to protect an employee between jobs, this type of insurance, if normally supplied to employees, may also need to continue during the period the employee is supposed to be protected. If an employer doesn’t also continue this type of coverage, it’s gambling the employee won’t need it. But if something does happen to the employee that prevents her from returning to work or continuing her job search, that gamble might go south.