Recently, the Ontario Government announced the creation of a new public holiday commencing in February, 2008. The new Family Day adds to the number of public holidays listed under the Ontario Employment Standards Act, 2000 (“ESA”). The ESA provides the statutory minimum entitlement for both unionized and non-unionized employees, with the exception of federally regulated employers. The new Family Day holiday brings the statutorily required number of paid days off to nine per year.
The result is clear for those employers that are currently providing less than nine paid holidays per year; they will be required to provide an additional paid day off to their employees. However, many employers already provide their employees with nine or more paid days off. Are these employers obligated to provide an additional paid day off?
The ESA generally provides that if an employment contract, including a collective agreement, provides a “greater benefit” to an employee than the provisions of the ESA, the ESA does not apply in respect of that provision. Accordingly, an employer’s obligation with respect to the new paid holiday will depend on the particular wording of its employment contract or, in the case of unionized employees, the particular wording of the collective agreement with respect to statutory holidays.
Three recent labour arbitration decisions have considered precisely this issue.1 In each case, the Union grieved that the employer was in breach of the collective agreement by reason of its refusal to recognize the recently enacted Family Day public holiday. In each case, the employer argued that the provisions of the relevant collective agreement provided a “greater benefit” to the employees by stipulating in total more than nine public holidays as compared to the nine public holidays stipulated under the ESA. In each case, the Union’s grievance was ultimately dismissed.
In their decisions, the Arbitrators contemplated the meaning of subsection 5(2) of the ESA which provides:
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 that the employment standard, the provision or provisions in the contract or Act apply and the employment standard does not apply.
The ESA expressly states in the Definitions section that the term “employment contract” includes a collective agreement and that the term “employment standard” means a requirement or prohibition under the ESA that applies to employers for the benefit of employees.
Each of the collective agreements in question provided for at least as many paid holidays as required by the ESA. However, the nine paid holidays in one case2 included a “float holiday” while the others provided for nine and eleven paid days off respectively in addition to “float holidays”. The character of a statutory holiday may be described as “guaranteed and … devoted entirely to purposes chosen by the individual with no element of contingency or restricted purpose”.3 In comparison, the “float holidays” in each of the cases reviewed would be forfeited if not taken within a prescribed period.
In each decision, the Arbitrator analyzed whether the relevant provisions of the collective agreement were “directly related” to the public holiday provisions of the ESA. This analysis included consideration of the paid holiday or equivalent section of the collective agreement as distinct from, for instance, the vacation or leave of absence sections. The Arbitrator then considered whether any restrictions or conditions were placed on the holidays under the collective agreement as compared to a statutory public holiday. This included examining how the holidays were accrued or forfeited, how they were paid, and whether the employer had the right to stipulate when the day was taken or whether it had to be agreed upon with the employee.
The Arbitrator in Shepherd Village concluded as follows:
Where an employee receives a float day off with pay, even if in some way less beneficial than a statutory holiday, and that day is in addition to the gross number of statutory holidays provided under the employment standard, the float day must tilt the balance in favour of a finding of “greater benefit” under the collective agreement for that employee. However, if such a float day merely brings the total number of holidays under the collective agreement of the same gross number of statutory holidays under the employment standard, but not beyond, the restrictions of limitation attached to the float days may prevent a finding of “greater benefit”. 4
This statement summarizes the current state of the law in this regard. Essentially, if the collective agreement provides for nine statutory holidays, even if the specific listed holidays do not include Family Day, the employer will not be obligated to recognize the recently enacted Family Day public holiday. The holidays in question must be of a similar character as a statutory holiday in terms of accruement, forfeiture and pay stipulations. If one of the nine paid days off is of a restricted character as compared to a statutory holiday, the employer may be required to add the new Family Day holiday to its list of statutory holidays depending on the nature of the restriction.
An issue which was expressly not dealt with in the reviewed decisions is a situation in which a float day has in fact been forfeited. The possibility exists that where an employee has been denied a float day and the float day comprises one of nine paid holidays under the collective agreement, the employer may be required to recognize the Family Day holiday. As stated by Arbitrator Burkett in Shepherd Village, “a float day that is forfeited is of no benefit to an employee”. 5 Accordingly, a forfeited float day may not be taken into account for the purposes of a “greater benefit” analysis.
In summary, the decision as to whether to grant an additional paid holiday in light of the newly enacted Family Day will require an assessment of the particular provisions of the employment contract or collective agreement.
The legislative purpose of Family Day as enacted by the McGinty government, is clear; employees should enjoy a much needed break during a time of the year when long weekends are scarce. However, an additional statutory holiday carries with it a significant cost to employers. Since many employers in Ontario already provided nine or more holidays prior to the enactment of Family Day, the practical reality was that many employees who enjoyed an existing greater right or benefit spent Family Day at work.