Canada: Benefits Continuation During Leaves Of Absence

Managing employees who are on a leave of absence is often a difficult task for employers. Among other things, employers must understand the contractual, statutory and common law obligations which are owed to such employees, particularly with respect to the protection and continuation of benefits. Employers who fail to meet their obligations in this regard may find themselves facing grievances, human rights complaints, employment standards complaints or wrongful dismissal claims (in the case of non-unionized workplaces).

This issue was recently considered by the B.C. Court of Appeal in British Columbia Teachers' Federation v. British Columbia Public School Employers' Association.1 This case involved a grievance brought by a local of the British Columbia Teachers' Federation (the "Union") in which the Union claimed that the Board of Education of School District No. 61 (Greater Victoria) (the "Employer") had breached the collective agreement when it failed to credit teachers who were on maternity and parental leaves with work experience for the purpose of salary increases.

Under the collective agreement, teachers were paid based on salary grids. A teacher was entitled to advance one increment in his or her salary grid for each year of teaching experience. The collective agreement described limited circumstances in which a teacher who was absent from work could be credited with teaching experience for the purpose of advancing to the next increment in the salary grid to earn the wage increase. However, those circumstances did not include absences while an employee was on maternity or parental leave. With respect to those types of absences, the collective agreement simply indicated that teachers were entitled to pregnancy and parental leave in accordance with the B.C. Employment Standards Act (the "ESA").

At first instance, the arbitrator held that teachers were not entitled to be credited for teaching experience while on maternity or parental leave, and accordingly, were not entitled to advance to the next step of the salary grid. In his reasoning, the arbitrator took the view that the increments in the salary grids were intended to reflect the value and reward of actual teaching experience and professional development and not simply to reflect the passage of time and length of service of an employee. The arbitrator also considered s. 56 of the ESA, which addresses benefits and entitlements while employees are on one of the statutorily protected leaves of absence. The arbitrator noted that under s. 56(1) of the ESA, employment was deemed continuous for the purpose of specific benefits (namely vacation, pension, medical or other plans beneficial to the employee) while s. 56(3) provided that employees were entitled to wage increases which they would have been entitled to had the leave not been taken. The arbitrator found this distinction was significant, concluding that the ESA only deemed employment to be continuous for the purpose of the specific benefits listed in s. 56(1) and in particular, did not deem employment to be continuous for the purpose of teaching experience (and therefore the consequent salary increases).

The B.C. Court of Appeal held that the arbitrator erred by interpreting the collective agreement to ascertain that the intention of the parties was to credit teachers with incremental steps within each category on the basis of actual teaching experience, and then utilizing that intention when interpreting s. 56(3) of the ESA. This, in the Court of Appeal's view, caused the arbitrator to reach an unduly narrow interpretation of s. 56(3).

The Court of Appeal explained that the ordinary and plain meaning of s. 56(3) made clear that an employee on leave is entitled, upon his or her return, to any increase in wages to which he or she would have been entitled had the leave not been taken. In the Court of Appeal's view, there was no basis for making a distinction between wages earned through actual work and wages earned through length of service. As the Court of Appeal explained, if, by continuing to work, an employee would have received an increase in wages through a credit of an incremental step, then the employee is entitled to the same increase if he or she took a leave of absence under the ESA rather than if the employee continued to work.

Determining which benefits may continue while an employee is on a leave of absence can be a complicated issue which, depending on the circumstances, may require an employer to consider statutes governing employment standards, as well as contractual obligations contained in a collective agreement or contract of employment. Employers should always exercise caution when discontinuing or limiting the benefits of an employee who is on a leave of absence.

Footnote

1. 2013 BCCA 179

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