Union and employer had different interpretations of new clause on holiday pay for part-timers
On July 19, 2001, the Canadian Union of Public Employees signed a memorandum of agreement (MOA) with Marianhill, a long-term and chronic care facility in Pembroke, Ont. The MOA stated it would include the terms of the previous collective agreement, which was set to expire, with an amendment to the guaranteed hours section.
The amendment included renewal of a provision outlining guaranteed hours and new language for one outlining pay on a statutory holiday in order to meet new employment standards legislation, which would cost three per cent of the payroll. The holiday pay provision stipulated part-time employees received 1.5 times their regular pay if they were scheduled to work on a statutory holiday but were not entitled to holiday pay if they weren’t scheduled to work.
The union argued the amendment allowed part-time employees to be paid for statutory holidays, since it indicated a change to the existing provision which prohibited it. The union also said the inclusion of the estimated three per cent cost indicated the intention of providing holiday pay.
An arbitrator ruled the amendment in the MOA was ambiguous and concluded the intent was to change the existing provision and provide part-time employees with holiday pay. Marianhill appealed the decision, arguing the MOA continued the terms of the previous agreement except where the parties specifically agreed to amend it and the new language did not clearly change the holiday pay provision. It said the three per cent was part of the guaranteed hours renewal, not holiday pay.
The Ontario Divisional Court upheld the appeal, finding the MOA clearly stated it was continuing all the terms of the previous collective agreement and the amendment in questions was not ambiguous. The court interpreted the provision as meaning part-time employees received guaranteed hours in exchange for forfeiting holiday pay for holidays they didn’t work.
The Ontario Court of Appeal disagreed and found the original arbitrator’s decision was correct. It found the amendment in the MOA could be interpreted two different ways: One foregoing statutory holiday pay for part-timers and one allowing it.
The Court of Appeal found the ambiguity stemmed from the reference to past prohibitions on holiday pay and the attempt to meet employment standards legislation, which entitled employees to it. The reference to a three per cent payroll cost further complicated matters, the court said, as this seems to refer to an amount vacation pay might cost.
It also found Marianhill had issued a book on collective agreement terms to employees that included an entitlement to holiday pay regardless of whether an employee worked on the holiday. After it did this, the company began paying part-time employees for holidays they didn’t work. This supported the union’s interpretation, the court said.
“The arbitrator had regard to both the provisions in the book and the employer’s practice of paying holiday pay for statutory holidays,” the Court of Appeal said. “Taken as a whole, these facts strongly suggest the employer understood that the MOA constituted an entitlement to holiday pay for statutory holidays.”
See Marianhill Inc. v. C.U.P.E., Local 2764, 2009 CarswellOnt 3700 (Ont. C.A.).
