Canada: Can Pay Increments Be Deferred When Employees Are Off Work Owing To Industrial Accidents Or Parental Leaves? – The Quebec Superior Court Weighs In

A recent decision of the Quebec Superior Court in Syndicat canadien des communications, de l'énergie et du papier (SCEP) c. Gagnon1 affirmed that an employer could defer the granting of pay increments to unionized employees who were off work because of industrial accidents or parental leaves.


Henri Sicotte inc. (the Employer) was a federally regulated employer operating in the cable TV and telephone sector, which had deferred the granting of pay increments to three grievants based on the number of weeks they were off work owing to industrial accident and/or parental leave. A fourth grievant, who was off work owing to an industrial accident, had not been paid for the Saint-Jean-Baptiste statutory holiday on the basis that he did not meet the condition specified in the collective agreement, namely, that he have worked at least fifteen days during the thirty-day period preceding the holiday.

The four employees challenged the decisions taken by the Employer on the grounds that they were contrary to the collective agreement and the Canada Labour Code2 (the Code) and were also discriminatory practices under the Canadian Human Rights Act.3

On July 17, 2012, arbitrator Huguette Gagnon dismissed all of the grievances filed on the employees' behalf by the Communications, Energy and Paperworkers Union of Canada (the CEP). The CEP applied for judicial review of the arbitrator's decision.


The collective agreement

The arbitrator first concluded that the grievances could not be allowed on the basis of the collective agreement.

As for the grievance related to statutory holiday pay, the arbitrator's decision was based on the wording of the collective agreement, which clearly stated that in order to be entitled to such pay, an employee had to have worked at least fifteen days during the thirty-day period preceding the statutory holiday, which the employee had not done. The Superior Court considered this finding by the arbitrator to be indisputable.

On the issue of the pay increments of the other three employees, the arbitrator identified two distinct concepts related to seniority in the collective agreement: seniority running from the hiring date and "seniority in the job", which corresponded to the total number of days that the employee was actually working in a job "excluding the days that the employee was not working owing to layoff or unpaid leave." For purposes of the grievances pertaining to employees' advancement within a pay scale for a job, the arbitrator determined that it was seniority in the job, rather than seniority based on the hiring date, that should count, which determination the Superior Court found to be a reasonable one.

The Canada Labour Code

In her decision, the arbitrator concluded that sections 209.14 and 209.25 of the Code cited by the CEP were not applicable to the grievances because no reorganization of the Employer's establishment had taken place and because the amounts in question did not involve pension, health or disability benefits, but step increments in pay. As far as the statutory holiday was concerned, the provisions of section 2016 of the Code were identical to those of the collective agreement.

Noting that the standard of review applicable to the arbitrator's decision was the reasonableness standard, the Superior Court went on to find that the arbitrator's determination with respect to the provisions of the Code, while consisting of just five paragraphs, was nevertheless reasonable and constituted a "possible acceptable outcome that could be justified in light of the facts and the law."

The Canadian Human Rights Act

The CEP also argued before the arbitrator that the position taken by the Employer in refusing to allow the time the employees were on leave to count for pay increment purposes amounted to a discriminatory practice prohibited by the Canadian Human Rights Act.

Family status

The arbitrator reasoned that not all parents took parental leaves and that the decision to do so was a choice. As no evidence had been submitted purporting to show that characteristics peculiar to the families of the grievants who took parental leave prevented them from participating fully and equally in their employment and made it necessary for them to take such leave, the arbitrator found that it had not been established that their situations fell within the "family status" ground of discrimination referred to in section 3 of the Canadian Human Rights Act.

In the view of the Superior Court, it was not unreasonable for the arbitrator to have found, based on the evidence before her, that the employees affected by the measure applied by the Employer had not discharged their burden of proof and had not established that their situations fell within the "family status" ground of discrimination.


The arbitrator found that the injuries sustained by the grievants that had led them to take industrial accident leave did constitute a disability within the meaning of the Canadian Human Rights Act. However, in the arbitrator's view, it had not been established that the grievants had been treated differently because of that disability. As a comparator group, the arbitrator used the group of employees who had been granted unpaid leave by the Employer for reasons other than disability. The impact of the provisions of the collective agreement had been the same for all employees who had taken unpaid leave. So the effect on the grievants had been no different from the effect on the other employees to whom the measure had applied.

The Superior Court found this to be a possible acceptable outcome. A finding that an employer, for purposes of advancement within a pay scale, or of statutory holiday pay, was entitled to take into account the fact that an employee had not been at work did not seem unreasonable, in spite of the protective provisions contained in the Canadian Human Rights Act. Such action did not mean that the affected employees had been discriminated against on the basis of disability or family status within the meaning of the Canadian Human Rights Act.


This ruling affirms the right of employers, in certain cases, to defer the granting of pay increments to employees who have been off work owing to industrial accident or parental leave. However, in order to be lawful, any action affecting an employee's advancement within a pay scale must comply with the collective agreement and the relevant provisions of the Code and must be applied in a manner that is consistent and non-discriminatory.


1 Syndicat canadien des communications, de l'énergie et du papier (SCEP) c Gagnon (March 6, 2013), 2013 QCCS 1347, DTE 2013T 295, AZ-50952250, Justice Jacques Babin.

2 Canada Labour Code, RSC 1985, c L-2.

3 Canadian Human Rights Act, RSC 1985, c H-6.

4 209.1 (1) Every employee who takes or is required to take a leave of absence from employment under this Division is entitled to be reinstated in the position that the employee occupied when the leave of absence from employment commenced, and every employer of such an employee shall, on the expiration of any such leave, reinstate the employee in that position. [...] (3) Where an employee takes leave under this Division and, during the period of that leave, the wages and benefits of the group of employees of which that employee is a member are changed as part of a plan to reorganize the industrial establishment in which that group is employed, that employee is entitled, on being reinstated in employment under this section, to receive the wages and benefits in respect of that employment that that employee would have been entitled to receive had that employee been working when the reorganization took place.

5 209.2 (1) The pension, health and disability benefits and the seniority of any employee who takes or is required to take a leave of absence from employment under this Division shall accumulate during the entire period of the leave.

6 201. (1) An employee who does not work on a general holiday is not entitled to be paid for the general holiday if, during the thirty days immediately preceding the general holiday, the employee is not entitled to wages (a) for at least fifteen days (...).

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