Canada: Extended Leave And Vacation Pay: Is Differentiating Between Classes Of Protected Employees Discriminatory?

Labour, Employment and Human Rights Bulletin
Last Updated: July 11 2019
Article by Valérie Gareau-Dalpé

Throughout the past years, arbitral case law has been marked by several decisions dealing with allegations of discrimination in contexts of granting or maintaining working conditions with a monetary impact following an extended absence from work. A recent decision reminds employers that distinctions between different classes of protected employees may also be discriminatory.

In Cégep de Trois-Rivières et Syndicat des professionnelles et professionnels du gouvernement du Québec1, the arbitrator concluded that the employer's decision to reduce the vacation credits of an employee absent due to disability amounted to discrimination prohibited under the Québec Charter of Human Right and Freedoms ("Charter") because the employee was not treated the same as other employees on statutory-protected leave.

What Happened

The collective agreement provided that unpaid absences of more than 60 business days during a year would lead to a reduction in an employee's vacation leave entitlements. The employee was on disability leave for 77 business days in a year while receiving wage loss replacement benefits. The employer reduced the employee's paid vacation entitlements by 6.5 days.

The union grieved. It argued the collective agreement rules about reduction of vacation time did not apply, and wage loss replacement benefits should be considered "pay" for the computation of vacation entitlements. The union also argued that reducing the employee's vacation entitlements while on disability leave was discriminatory.

Decision

The arbitrator found wage-loss replacement benefits were not "pay" under the collective agreement. The collective agreement appeared therefore to entitle the employer to reduce the employee's vacation credits.

The employer did not dispute the employee's reason for taking a disability leave was a "handicap" under the Charter. The employer argued that the provisions related to the computation of vacation credits were not on their face discriminatory. The arbitrator found that the collective agreement created a distinction on the basis of disability between employees absent from work without pay and those who received compensation or benefits equal to a certain percentage of their pay during their absence. Employees who were on disability leave for more than 60 business days during a given year were subject to a reduction of the length of their annual vacation leave. Employees on maternity leave were not similarly penalized. The arbitrator concluded that the collective agreement was discriminatory on the prohibited ground of "handicap".

In other words, even if the employer correctly applied the contractual provisions with respect to the length of the vacation leave, the application was discriminatory as against employees absent due to disability. As the employer did not claim undue hardship, the arbitrator ordered that the employer should grant the employee full entitlements to vacation pay.

Lessons for Employers

This decision is part of the multiplicity of recent decisions where arbitrators held that providing less than advantageous working conditions to employees because of a disability is discriminatory. That said, we note that certain distinctions can be drawn from the instant case.

As such, the arbitrator in this case acknowledged that a provision which as for effect to reduce vacation pay for an employee absent without pay during a vacation reference year was not discriminatory at first glance. Rather, the arbitrator found that there was differential treatment between protected classes of employees - on disability and maternity leaves - as opposed to between employees actively or not actively at work  during the year. If the collective agreement had provided for identical entitlement for employees who were on leave irrespective of the reason for the leave (disability or maternity), the union's allegation of discrimination should have been rejected.

Employers should review their policies and agreements in light of this decision to ensure that differential treatment is not applied to employees in different protected classes on leave because this may provide a basis for a successful discrimination claim.

Footnote

[1] Cégep de Trois-Rivières et Syndicat des professionnelles et professionnels du gouvernement du Québec, 2019 QCTA 134.

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