In the recent United Steelworkers Local 14193 v Cameco Fuel Manufacturing Inc., 2023 CanLII 115899 (CA LA) decision (“Cameco Fuel Manufacturing”), the arbitrator allowed a federal employer to deduct an entitlement to Canada Labour Code paid medical leave days for each day an employee received a 100% wage indemnity under the employer’s short-term disability benefits plan.

Background - Paid Medical Leave

The Canada Labour Code (the “CLC”) was amended on December 1, 2022, by Bill C-3, An Act to amend the Criminal Code and the Canada Labour Code. Section 239(1.21) of the CLC now provides a maximum entitlement of ten (10) days of medical leave absence with pay (“CLC Sick Days”) for all federally regulated employees. Prior to such amendments, the CLC permitted up to three (3) paid personal days which could be used for illness or injury, among other reasons. We have previously written in detail about these legislative changes to the CLC.

Facts

The United Steelworkers Local 14193 (the “Union”), filed a policy grievance on behalf of the employees of Cameco Fuel Manufacturing Inc. (“Cameco”) regarding Cameco’s practice of crediting short-term disability leave days as CLC Sick Days. Cameco’s practice was to count approved leave days that were paid at 100% of weekly earnings under its short-term disability benefits plan (“STD Leave Days”, and such plan, the “STD Plan”) as CLC Sick Days. The STD Plan was set out in the collective agreement between the Union and Cameco.

The Union claimed that by deducting STD Leave Days from an employee’s CLC Sick Day entitlements, Cameco would deprive employees of their statutory rights, as the CLC Sick Days and the STD Plan served separate purposes. More specifically, the Union argued that the CLC Sick Days were intended to indemnify employees for short absences for various health-related reasons, while the STD Plan was intended to provide financial support for more serious personal illnesses or injuries of longer duration. Cameco argued that it provided a superior benefit than what is outlined in the CLC, given the breadth and depth of the STD Plan, such that it was consistent with the intention of the legislation to credit STD Leave Days toward CLC Sick Day entitlements.

Decision

Arbitrator Nyman dismissed the Union’s grievance and allowed Cameco’s practice of offsetting banked CLC Sick Days against STD Leave Days, on the basis that this provided a more favourable benefit to Cameco’s employees as compared to the entitlement to CLC Sick Days, on its own. In order to determine which benefit was more favorable, Arbitrator Nyman looked to section 168(1) of the CLC which protects employee rights or benefits that are more favourable to an employee than those rights and benefits provided under Part III of the CLC:

Saving more favourable benefits

168 (1) This Part [(Standard Hours, Wages, Vacations and Holidays)] and all regulations made under this Part apply notwithstanding any other law or any custom, contract or arrangement, but nothing in this Part shall be construed as affecting any rights or benefits of an employee under any law, custom, contract or arrangement that are more favourable to the employee than his rights or benefits under this Part. (Emphasis added)

In interpreting section 168(1) of the CLC and its application to Cameco’s practices, Arbitrator Nyman referred to the legal test set out in 1643749 Ontario Inc. v. Arsenault, [2009] CLAD No 394, which requires the following analysis be undertaken when comparing statutory and other rights or benefits:

• First, when comparing the statutory benefit to the allegedly more favourable benefit, the purpose of the statutory benefit must be considered.
• Second, a determination must be made whether the allegedly more favourable benefit serves the same purpose as the statutory provision. If the benefit is found to be more favourable than the statutory benefit, then it prevails vis-à-vis the statutory counterpart. If the benefit is not more favourable than the statutory benefit, then the employee is entitled to claim the minimum standard under the [CLC].

In applying the above test, Arbitrator Nyman found the following with respect to Cameco’s practices:

• First, the CLC Sick Days and the STD Plan had a substantially similar purpose—both benefits were “forms of wage indemnification to address personal illness and injury”.
• Second, Cameco’s practice of permitting employees to use their statutory CLC Sick Day entitlements along with their STD Leave Days provided a more favourable benefit than using the CLC Sick Days on their own. This favourable benefit existed even with Cameco deducting one (1) CLC Sick Day for each day an employee used an STD Leave Day.

In light of the above, Cameco’s practice of crediting STD Leave Days toward their employees’ CLC Sick Day entitlement was found to comply with the CLC and the Union’s grievance was dismissed.

Key Takeaways for Employers

The Cameco Steel Manufacturing decision is helpful as it confirms that federal employers may be able to count paid leave days under an employer-provided benefit plan as CLC Sick Days, where the time off entitlements serve the same purpose. It is important to highlight that the above decision was based on the specific facts of Cameco’s practice, which allowed CLC Sick Days to be taken (in accordance with eligibility criteria under the CLC). As Arbitrator Nyman clarified, if Cameco’s practice were to change, the impact of the change would have to be analyzed.

The author would like to acknowledge the support and assistance of Lucia Chiara Limanni, articling student at law.

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