Arbitrator decides new PEL provisions don’t apply to 'greater benefits'

In 2018 the former Liberal provincial government passed Bill-148 into law, changing an array of legislation on which workplaces were run. One such amendment was new entitlements to Personal Emergency Leave (PEL) under section 50 of the Employment Standards Act, 2000. Employees in Ontario are now typically entitled to be absent ten times during the calendar year due to a personal emergency, with the first two such PEL days being paid by the employer.

It was only a matter of time before an employer challenged the new provision in light of the “Greater Right or Benefit” clause at subsection 5(2) of the ESA. Employment contracts, including collective agreements, must be consistent with the ESA unless the contract provides a substantively greater benefit:

Greater contractual or statutory right
(2) If one or more provisions in an employment contract or in another Act that directly relate to the same subject matter as an employment standard provide a greater benefit to an employee than the employment standard, the provision or provisions in the contract or Act apply and the employment standard does not apply. 2000, c. 41, s. 5 (2).

In an unreported labour arbitration decision, United Steelworkers, Local 2020 v. Bristol Machine Works Ltd. (Grievance GB-01-18, Sick Days), the Union sought a ruling that its members were entitled to receive two yearly paid days of sick leave in addition to the negotiated benefits under the collective agreement. The parties had negotiated an insurance welfare program entitling members to 65% of wages for up to seventeen weeks for an accident or illness, as well as 65% of earnings in long-term disability benefits. There are some qualifying criteria for each of the short-term and long-term disability benefits.

The employer on the other hand, relied on subsection 5(2) of the ESA to support its position that the members cannot be entitled to both the entitlements under the collective agreement AND the entitlements under the ESA. In its view, the collective agreement entitlements negotiated between the parties conferred a greater right or benefit on the employees, such that they were disentitled to their ESA benefits.

The first task for the arbitrator was to determine how it would analyze whether the collective agreement provided a greater right or benefit. He relied on past case law highlighting the importance of confining an inquiry under subsection 5(2), as far as possible, to a comparison of “apples to apples”. At paragraph 29 of the decision, the arbitrator stated that he could not engage in a “line against line” comparison, but rather needed to compare the totality of the benefit in question as it exists under the collective agreement versus the totality of the benefit as provided by the ESA. Or to put it another way, subsection 5(2) both limits and extends the comparison to one or more provisions in an employment contract that directly relate to the same subject matter as the employment standard.

The Arbitrator determined that the benefits bargained by the parties under the collective agreement were superior, and therefore that in normal cases, the ESA entitlements would not apply. He stated:

When these two levels of income protection for sickness are placed in the pans of the metaphorical scale …, the comparison, I consider apparent, is not close. The Plan negotiated by the Steelworkers', as one might expect, is manifestly better than the minimal pay protection provided to all employees, represented or otherwise, under the terms of the Employment Standards Act. I find this to be true notwithstanding the waiting period of seven days (for illness, as opposed to accidental injury) under the short-term Sickness Plan, and the eighteen-month service period applicable to the more extensive coverage provided to employees under the Long-term Plan. Neither of those, in my view, are of such an unreasonable length as to negate the vast superiority of the collective agreement's Income-protection Plan over the Act.

However, the collective agreement benefits did not apply to “probationary” employees who had yet to accrue sixty days of service with the employer. The arbitrator found that for those individuals, there was no greater right or benefit, and so the employer was required to honour the PEL provisions of the ESA.

This decision should be a welcome one for employers. While the mere existence of a collective agreement in and of itself will not be enough to establish a greater right or benefit, there is now arbitral authority for the principle that where a collective agreement provides substantial rights to employees in the event of non-culpable absence, the employer will not also be required to make payments described in the ESA.

For a full summary of the changes brought by Bill148, read Susan Crawford’s blog HERE; and listen to Episode 2 of the #LawyersForEmployers podcast HERE.

For more information on Personal Emergency Leave and what it means for employers, listen to Episode 6 of the #LawyersForEmployers podcast here.

If you would like advice regarding the applicability of the greater right or benefit standard to your employment agreements, you may want to seek advice from any of the experienced lawyers at CCPartners.