I'm hoping an Ontario employment lawyer can weigh in on this situation.
I joined my company almost two years ago. When I received my job offer, a senior executive explicitly confirmed via email that the company offered unlimited paid vacation. However, my employment contract specifies three weeks of vacation, which we were told was included for vacation payout purposes.
Unlimited vacation was a well-established policy at the company, and employees regularly used it. I know unlimited PTO gets a bad reputation, but that genuinely wasn't our experience. We had a culture that encouraged taking time off, and the flexibility was one of the most valued benefits of working there.
Our company was subsequently acquired, and the new leadership now intends to eliminate unlimited vacation and replace it with a fixed entitlement, likely in early 2027.
Leadership has explained that the change is intended to standardize benefits across the organization and address financial reporting/revenue recognition considerations.
They've also stated that they've reviewed three years of historical vacation usage and believe virtually everyone will be "no worse off" under the new policy.
However, I don't think historical usage fully captures the value of unlimited vacation. Even if someone typically took four weeks per year, having the flexibility to take six weeks during an exceptional year was a meaningful benefit.
My questions are:
Can an employer legally remove unlimited paid vacation when it was explicitly promised in writing during the hiring process, even if the signed contract specifies three weeks?
Could this qualify as a substantial unilateral change to employment terms or potentially constructive dismissal under Ontario law?
If the employer removes a benefit with financial value, are employees entitled to compensation in return? For example, could we reasonably argue for salary increases to offset the loss, even if we don't have an automatic legal entitlement to them?
Does the company's argument that employees will be "no worse off" based on historical vacation usage have any legal significance?
Approximately 15 employees are affected. None of us wants to leave our jobs or pursue legal action unnecessarily, but we're concerned about losing a benefit that was explicitly offered when we joined.
We're also wondering whether it would be worthwhile to consult an employment lawyer collectively before the new policy takes effect.
I'd really appreciate any insight from Ontario employment lawyers or anyone who's dealt with a similar situation.
Thank you!