Canada: Arbitrator Rules That Sick Leave Entitlement Requires Active Work

On February 20, 2018, Arbitrator William Kaplan issued a decision with respect to the entitlement of a teacher to the sick leave and/or short term leave and disability plan when he or she is unable to return to work following a voluntary, unpaid, non-statutory leave of absence because of an intervening illness or injury.

The decision confirms that sick leave benefit is inextricably tied, not to status, but to performance of work.

Sick leave is compensated as follows: the first 11 days at 100 per cent, then the next 120 days at 90 per cent.

The Kaplan decision arose from the central dispute resolution process set out in the School Boards Collective Bargaining Act, 2014, and so will directly impact all 29 Catholic school boards represented by the Ontario Catholic School Trustees' Association ("OCSTA"). The decision is significant to the other 43 school boards in Ontario in affirming that sick pay benefits in the education sector remain a work-based benefit, except where otherwise expressly specified.

BLG represented OCSTA at this hearing.

Submissions by OECTA

The Ontario English Catholic Teachers' Association ("OECTA") initiated a central grievance alleging that a teacher on a voluntary, unpaid, non-statutory leave of absence is entitled to sick leave if she does not return to work on her scheduled return date because of intervening illness or injury. Under the central resolution process in the collective agreement, the Crown is also a party to the proceeding.

OECTA argued that the central terms of the collective agreement require the applicable board to provide sick leave and that the language was mandatory, such that entitlement — "will be" — allocated on the first day of the school year for full-time teachers regardless of start date. OECTA took the view that the collective agreement did not require a return to work as a precondition for entitlement.

OECTA argued that where a teacher was on a voluntary, unpaid, non-statutory leave of absence with a scheduled return date, and she became ill or was injured, she was entitled to access to sick leave. OECTA stated that the purpose of the plan was to provide the teacher with income protection, and if she was unable, by illness or injury, to return to work as scheduled she should be able to avail herself of the benefits of the sick leave provisions. The fact that a teacher had previously been on a voluntary, unpaid, non-statutory leave of absence was, in OECTA's submission, irrelevant when a purposive approach was taken.

OECTA conceded that some sick leave plans required entitlement to be earned through attendance at work, but not this plan. OECTA argued that this plan did not impose any requirement that sick leave benefits be earned by attendance at work.

Submissions by OCSTA and the Crown

Both OCSTA and the Crown argued that a teacher on a voluntary, unpaid, non-statutory leave had no entitlement to access sick leave until a bona fide return to work had occurred. Sick leave was work-based, reserved for employees at work and not employees on voluntary, unpaid, non-statutory leaves of absence. OCSTA and the Crown submitted that this conclusion flowed from an interpretation of central and local provisions, from the case law and from sound public policy, not to mention avoidance of absurd results.

A careful review of the central terms led to the conclusion that the allocation was to full-time teachers at work: they received complete coverage, no matter when they actually returned to work, and that part-time teachers received pro rata coverage. The conclusion that inevitably followed was that teachers who were not at work received no entitlement until they actually returned to work. Until the teacher returned to work during the year, there was nothing to allocate. And, if no allocation was made, there was no corresponding entitlement to access benefits under the plan. OCTSA and the Crown took the view that if the teacher returned to work, making a bona fide return, then she was eligible for her full allocation.

OCSTA and the Crown argued that no other interpretation made any sense. How could it be, for example, that a full-time teacher on a voluntary, unpaid, non-statutory leave of absence who did not return to work on her scheduled date could receive complete sick leave coverage (i.e. 131 days), while a part-time teacher who had actually been at work only received a pro rata portion of that amount?

Likewise, a teacher who had a change in status during the year from full to part-time would have her allocation appropriately adjusted. OCSTA and the Crown argued that this signaled a shared understanding that presence at work mattered, and that eligibility was contingent on actual work. 

Decision and Analysis

In dismissing the grievance, Arbitrator Kaplan affirmed the crux of the OCSTA and Crown's submissions that sick leave remains a work-based benefit in the education sector, and that a teacher must be actively at work in order to receive the benefit. He stated:

The scheme of the provision, considered in the overall, is to marry allocation and access tying both to attendance. You get it on the first day of the school year, or when you return to work. Your presence in the workplace is what makes you eligible. Other provisions in the collective agreement support this interpretation. It would, as OCSTA and the Crown argue, be a somewhat surprising outcome to conclude that a teacher on a voluntary unpaid non-statutory leave who does not return to work is nevertheless entitled to 131 days of generous compensation while, by way of one example, a part-time teacher who is at work receives only her pro rata entitlement.

Arbitrator Kaplan confirmed that the sick leave plan does not specifically set out either the entitlements or restrictions applicable to a teacher on a voluntary, unpaid, non-statutory leave of absence who does not return on her scheduled return to work date.

He stated: "The purpose of sick leave is to compensate people who cannot work because they are sick or injured: it is most definitely not to compensate people who have chosen to take an unpaid leave and who unfortunately become ill or injured before they return to work."

The Arbitrator further stated that under this collective agreement, sick leave is not available to employees on voluntary, unpaid, non-statutory leaves of absence. When a teacher takes a voluntary, unpaid, non-statutory leave of absence, she assumes — until she returns to work — the financial risk of the illness. "Just because a teacher becomes ill or injured close to the projected return dates does not confer either allocation or access. Once they make their bona fide return to work, they receive their allocation and access."

Arbitrator Kaplan indicated that there is nothing unreasonable per se in applying such a work-based precondition for access.

He also confirmed the generally accepted jurisprudential principle that clear language is required to confer an economic benefit, especially one that would be "non-normative." The parties can decide to provide sick leave to employees on voluntary, unpaid, non-statutory leaves of absence, but they should do so directly. He stated:

Individuals who decide to take a voluntary unpaid non-statutory leave of absence are not working — that is the decision they have made — and until they return to work they are not eligible for sick leave. Once they actually return to work, they receive their full allocation and entitlement. The sick leave benefit is inextricably tied, not to status, but to performance of work.

The Arbitrator confirmed that sick leave is designed to compensate employees who cannot work, not employees who are unable to return from a voluntary, unpaid, non-statutory leave of absence. He stated that it is hard to imagine anyone going away on an unpaid leave and believing that they can access the sick leave plan if they are unable to return to work. He concluded that "someone who provides no services whatsoever cannot come within the scope of the benefit."

The determination that sick leave remains a work-based entitlement in the education sector is notable as it bridges earlier case law — which applied to a context where sick leave entitlements were tied to compensation through retirement gratuities — to the current context where retirement gratuities have been phased out. As now recognized by Arbitrator Kaplan's decision, the elimination of the connection to retirement gratuities did not alter the fundamental nature of sick leave in the education sector as a benefit tied to the performance of active work.

This decision represents a significant step forward regarding the interpretation and application of sick leave entitlements under the relevant teacher collective agreements.

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