In United Steelworkers Local 14193 v. Cameco Fuel Manufacturing Inc., 2023 CanLII 115899 (ON LA), an arbitrator dismissed a union’s policy grievance on the grounds that, contrary to the union’s assertion, the employer could count approved sick days paid at 100% of weekly earnings under its short-term disability benefits plan (STD Plan) as paid medical leave days under the Canada Labour Code (CLC).

CLC Paid Medical Days

On June 23, 2022, federal Bill C-19, Budget Implementation Act, 2022, No. 1, received Royal Assent. Among other legislative changes, Bill C-19 made amendments to the paid medical leave of absence provisions in s. 239 of the CLC, that were included in Bill C-3, An Act to amend the Criminal Code and the Canada Labour Code (Bill C-3). The provisions relating to medical leave of absence came into force on December 1, 2022.

Pursuant to Bill C-19’s amendments, under ss. 239(1.2) to (1.4) of the CLC, an employee who completes 30 days of continuous service is entitled to earn three paid medical leave days (CLC Paid Medical Leave Days) and accrue one additional such day per month, up to a maximum of 10 CLC Paid Medical Leave Days in a calendar year. We wrote about this here.

Before the amendments to s. 239 of the CLC became effective, the CLC provided up to three paid personal days which could, among other purposes, be used for illness or injury, under s. 206.6 of the CLC.

Facts

In early 2023, after Bill C-19 had come into effect, the employer began to count approved sick days paid at 100% of weekly earnings under its STD Plan as CLC Paid Medical Leave Days. The union, United Steelworkers Local 14193 (USW), objected and filed a policy grievance, claiming the STD Plan and CLC Paid Medical Leave Days are separate entitlements and that the employer’s deduction deprived employees of their statutory rights. In response, the employer argued that, by integrating the two schemes, it was providing a benefit superior to that set out in the CLC.

The USW’s Argument

The USW argued, among other things, that because the CLC Paid Medical Leave Days serve a different purpose than the STD Plan, the employer could not offset CLC Paid Medical Leave Days with days that are indemnified under the STD Plan; under s. 168 of the CLC, a comparison of CLC benefits and collective agreement benefits “must compare apples to apples.” The USW argued in the alternative that if CLC Paid Medical Leave Days and the STD Plan serve the same purpose, the CLC Paid Medical Leave Days “are a more favourable benefit and so the employees receive the benefit of both.”

Section 168(1) of the CLC

Section 168(1) of the CLC provides:

Saving more favourable benefits

168 (1) This Part 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.

Arbitrator’s Decision

Arbitrator Jesse Nyman noted that the parties agreed on the applicable principles and analytical approach to statutory interpretation: The words of a statute must be “read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”; and it is appropriate to rely on the following summary of the approach to be taken to the interpretation of s. 168 of the CLC, set out in Ontario Inc. v. Arsenault, [2009] C.L.A.D. No. 394 (Kelly):

First, when comparing the statutory benefit to the allegedly more favourable benefit, one must consider the purpose of the statutory benefit. Second, a determination must be made whether the allegedly more favourable benefit serves the same purpose as the statutory provision. If it does, and it is found indeed to be more favourable than the statutory benefit, then it prevails vis-à-vis the statutory counterpart. Otherwise, the employee is entitled to claim the minimum standard under the Code.

Arbitrator Nyman determined that the appropriate approach in this case could be determined from the language in s. 168(1) of the CLC, which “protects the rights of employees to receive any rights or benefits arising under ‘any law, custom, contract or arrangement that are more favourable.’” He noted that the foregoing language “is wider than protecting any rights that arise solely under a collective agreement or employment contract” and that “the totality of any benefit” to which an employee is entitled must be considered.

Arbitrator Nyman asked whether the statutory entitlement to CLC Paid Medical Leave Days and the contractual right to benefits under the STD Plan have the same purpose. He found that, “…the STD Plan benefits have a substantially similar purpose to the purpose of the [CLC Paid Medical Leave Days] …Both benefits are forms of wage indemnification to address personal illness and injury.”

Having thus found it appropriate to compare the CLC Paid Medical Leave Days to The employer’s STD Plan benefits offering, Arbitrator Nyman went on to find that:

Ultimately, when considered as a whole, [the employer’s] practice of allowing employees to utilize [CLC Paid Medical Leave Days] for which they otherwise qualify and have available along with the STD Plan provides a more favourable benefit than [CLC Paid Medical Leave Days] alone, even though [the employer] deducts an entitlement to a [CLC Paid Medical Leave Day] for each day an employee receives 100% wage indemnity under the STD Plan.

Having arrived at this conclusion, Arbitrator Nyman proceeded to dismiss the grievance.

Bottom Line for Employers

Arbitrator Nyman’s Award will be of interest to federal employers as they consider the interaction between CLC Paid Medical Leave Days and other benefits to which their employees may be entitled, whether they be under a collective agreement, a benefits plan or otherwise. His Award confirms that it may indeed be possible for employers to simultaneously count existing paid leave days under a collective agreement as CLC Paid Medical Leave Days. As Arbitrator Nyman’s Award makes clear, whether that is the case, however, will depend on the totality of the benefits provided.