Employers have been anxiously awaiting guidance from adjudicators concerning the interpretation of the amendments of the Employment Standards Act (the “ESA”) introduced by Bill 148. In particular, many unionized employers have been concerned about the interaction of paid disability benefits provided for in their collective agreements and the requirements introduced by Bill 148 to pay for the first two days of personal emergency leave in each year. The award of Arbitrator Mort Mitchnick in Bristol Machine Works Ltd. may be the first decision to address this issue.
By way of brief background, the concept of personal emergency leave (“PEL”) has existed in Ontario for many years. PEL can be used by eligible employees to take up to 10 days per year of job protected leave in connection with personal illness, injury or medical emergency, or death, illness, injury, medical emergency or urgent matter affecting designated family members. Bill 148 made three significant changes. First, PEL now applies to the employees of all employers whereas, under the previous version of the ESA, PEL only applied to the employees of employers who regularly employed 50 or more employees. Second, the ESA now requires employers to pay for the first two days of PEL used by each employee in each year. Third, the ESA prohibits employers from asking for a doctor’s note to support a PEL claim.
Like the other minimum standards created by the ESA, the PEL provisions are subject to section 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 than the employment standard, the provision or provisions in the contract or Act apply and the employment standards does not apply.
In Bristol Machine Works Ltd., the union claimed that all of its members were entitled to two paid PEL days per year for sickness. The employer responded that the PEL provisions of the ESA did not apply because the collective agreement provided a greater benefit. While the employer referred to a number of provisions of the collective agreement, it focused primarily on the weekly indemnity benefits and long term disability insurance benefits provided in the agreement. The contractual weekly indemnity benefit provides for a waiting period of seven calendar days in the event of sickness. Under the ESA, employees who have completed one week of employment are entitled to paid PEL. The Bristol Machine Works agreement provides that seniority employees are entitled to weekly indemnity benefits equal to 65% of their wages to a maximum of $700 per week for up to 17 weeks after the qualifying period. Paid PEL days are covered at 100% of the employee’s lost, regular wages. Under the Bristol Machine Works collective agreement, disability benefits are not available until the employee completes the 60 working day probationary period.
Arbitrator Mitchnick reviewed many of the cases that dealt with the greater benefit issue prior to the Bill 148 era. He concluded that the issue that he had to address was whether or not the PEL provisions of the ESA provided a greater benefit than the collective agreement with respect to income protection for sickness. Arbitrator Mitchnick concluded as follows:
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 such an unreasonable length as to negate the vast superiority of the collective agreement’s income-protection plan over the Act.
Arbitrator Mitchnick went on to address the issue of the evidence that can be required as proof of illness. He accepted that, under the weekly indemnity and long term disability plans, the insurer could require appropriate medical substantiation. Though he does not specifically address the issue, it appears that because the collective agreement provides a greater benefit in cases of illness, the entire statutory PEL scheme would not apply to sick leave claims, including the prohibition on requiring a certificate from a health practitioner to justify illnesses. In other words, based on Mr. Mitchnick’s reasoning, employers who provide a greater benefit through a short term and long term disability plan should be able to require medical certificates for all sick leave claims as long as the employer complies with any relevant collective agreement provisions.
Arbitrator Mitchnick found that probationary employees of Bristol Machine Works are entitled to paid PEL days as they are not entitled to receive short or long term disability benefits. The prohibition on asking for doctor’s notes would apply to the probationary employees.
While the award in Bristol Machine Works Ltd. focuses on a fairly narrow issue (i.e. income protection for personal illness), it provides some welcome clarity with respect to at least one aspect of the interaction between collective agreements and the amended ESA. We will monitor the case law for further developments.