At the beginning of 2021, Arbitrator Nathalie Massicotte rendered a decision1 that takes a firm position in the jurisprudential debate surrounding vacation pay in the wake of the most recent amendment to the Act respecting Labour Standards (the “LSA”).
On June 12, 2018, the National Assembly of Quebec passed Bill 176 amending the LSA, which introduced numerous changes, particularly to section 69, and reduced the number of years of service required to be entitled to a third (3rd) week of vacation to three (3) rather than five (5). This legislative change came into effect on January 1, 2019.
Thus, after the amendments, the wording of section 69 of the LSA reads as follows:
69. An employee who, at the end of a reference year, is credited with three years of uninterrupted service with the same employer is entitled to an annual leave for a minimum duration of three consecutive weeks.
Since this amendment to the LSA, there has been an ongoing debate regarding the application of the changes to section 69, which has been the subject of divided arbitral jurisprudence. In this respect, the two sides of the debate can be boiled down to the positions taken by each of the parties to the arbitration.
The union’s position2
Through its grievance, the union is of the opinion that the legislative change that came into effect on January 1, 2019, is “immediately” applicable and ensures that employees with three (3) years of uninterrupted service as of January 1, 2019, are entitled to a third (3rd) week of vacation immediately, effective January 1, 2019, without having to wait until the end of the reference year.
The employer’s position3
By contrast, the employer is of the opinion that the amendment to section 69 of the LSA relates to the reference year that ends after January 1, 2019. If the reference year is from May 1 to April 30, the entitlement to a third (3rd) week of vacation for employees with three (3) years of uninterrupted service as of April 30, 2019, will only vest as of May 1, 2019, that being the end of the reference year.
The decision of Arbitrator Nathalie Massicotte
In her analysis, Arbitrator Massicotte first reviewed the concept of the “reference year,” which is used to determine an employee’s vacation entitlement. She specified that this is a fundamental concept in determining when such entitlement materializes.
The arbitrator continued her analysis by indicating that sections 68 and 69 of the LSA confirm that it is only upon completion of the reference year that the employee is entitled to two (2) or three (3) weeks of vacation, depending on whether he or she has one or three years of uninterrupted service.
The arbitrator agreed with the employer’s arguments and concluded that, while the amendment to the LSA did indeed extend the entitlement to vacation leave, it did not alter the mechanism for acquiring vacation entitlement arising from the concept of the reference year, nor did it specify in any way that the method of calculation had to be changed in order to reassess the number of weeks of vacation to which an employee is entitled.
Let us hope that this decision will put an end to the jurisprudential controversy that has persisted since this amendment came into force.