Under the Employment Standards Act, 2000 (“ESA”), employers and employees cannot contract out of an ESA minimum entitlement. However, if an employment contract or collective agreement provides a greater benefit that the employment standards on the same subject matter, then the employment contract or collective agreement will apply and the employment standard as outlined in the ESA will not. Therefore, it becomes key to determine what constitutes a greater right or benefit.
As of January 1, 2018, all employees are statutorily entitled to two paid and eight unpaid Personal Emergency Leave (“PEL”) days, no matter how many employees are in the workplace. The previous entitlement of ten unpaid PEL days applied only to workplaces with fifty or more employees.
In both USW, Local 2020 v Bristol Machine Works Ltd (“Bristol”) and Carillion Services Inc v Labourers’ International Union of North America Local 183 (“Carillion”) employees who wished to use their two paid PEL days and were denied filed grievances. Both unionized workplaces contained provisions in their collective agreements respecting leave for unexpected circumstances.
In both of the cases, the arbitrators focused on two key elements in assessing whether or not the benefits provided under the collective agreement were greater than the statutory entitlements contained in the ESA:
- whether or not the benefits provided under the collective agreement were directly related to the statutory entitlement; and
- whether or not the benefits under the collective agreement, viewed in their totality, constituted a greater benefit than what was available under the ESA.
Insurance Welfare Program Constitutes a Greater Right or Benefit
In Bristol, the collective agreement included an insurance welfare program with substantial short-term (seventeen weeks of weekly indemnity benefits paid at 65% of wages) and long-term benefits (also paid at 65% of wages) for employees who suffered from illness or accidental injury. The arbitrator found that the income protection under the collective agreement was a greater right or benefit that the employees’ statutory entitlement to two paid PEL days because the income protection plan offered by the employer contemplated the same circumstances as the ESA PEL provisions—it was for use in the event of an unexpected illness or accident to ensure that employees did not lose income as a result of a justifiable absence.
The arbitrator considered the statutory and contractual benefits in their totality. Although an employee would be required to wait for seven days to access the benefits in the case of illness the arbitrator found that, on the whole, the benefit constituted a greater right than that afforded by the ESA. For this reason, the arbitrator found that the employees were not entitled to request two statutory PEL days in addition to the benefits package they already received. The only exception to this finding was in relation to probationary employees who were not entitled to the benefits package and thus were entitled to ESA PEL days.
“Floater” Days may not Constitute a Greater Right or Benefit
In Carillion the collective agreement provided for three “floater days,” which could be used in any situation where the employee would be unable to work. In practice, employees had the option of taking this day as an additional holiday, or applying it to an unexpected absence, such as in the case of an illness. In this case, the arbitrator found that the entitlement provided for in the collective agreement did not constitute a greater right than what was afforded by the ESA as the floater days were not directly related to the ESA PEL entitlement.
The floater days were for use in a broader range of circumstances than PEL days and could essentially be considered additional paid holidays and were therefore not the same kind of benefit as PEL days. Consequently, if employees were required to take their floater days as statutory PEL days they would have to trade additional holidays bargained for in the collective agreement for statutorily guaranteed emergency leave. The result was that, effectively, the employee and not the employer would be paying for statutory personal emergency leave days by foregoing paid holidays.
Employers should consider carefully whether or not to assert that additional benefits or perks provided for in contracts or collective agreements constitute a greater right or benefit to PEL days such that employees are not entitled to the statutorily guaranteed PEL days. This consideration will be relevant both during the negotiation process and for business with existing agreements in place. For a contracted benefit to constitute a greater right, its purpose must be directly equivalent to that of the PEL days. Time off which is not explicitly provided for the purpose of income protection in the event of unexpected illness or injury may not be considered directly equivalent to PEL days and thus may not constitute a greater right or benefit than the statutory entitlement.
While the Bristol decision is favourable to employers because it demonstrates that the PEL entitlement guaranteed to all employees by the recent amendments to the ESA will not necessarily mean that employees are automatically entitled enhanced benefits over and above those outlined in their employment agreements or those obtained through collective bargaining, the issue of what constitutes a greater right or benefit is far from settled. Employers should carefully consider what entitlements they wish to offer employees, and whether it is reasonable to assert that any entitlements beyond the statutory minimums truly constitute a greater right or benefit such that employees are not entitled to the two paid (and/or eight unpaid) PEL days under the ESA.
This blog is provided as information and a summary of workplace legal issues.
This information is not intended as legal advice.