Employers deserve comp for reservists: Study

Job protection legislation a 'hardship' for employers

Firms that employ reservists should be compensated — with 40 to 80 per cent of a reservist’s salary — for the hardships involved when reservists are deployed, according to a report from the C.D. Howe Institute.

The use of reservists promotes the peace, security and prosperity of all Canadians and yet employers of reservists tend to bear the costs of employees deployed overseas, owing to federal and provincial job protection legislation, according to Supporting Employees Who Deploy: The Case for Financial Assistance to Employers of Military Reservists.

“You get this situation where services to society are being rendered at the expense of a few,” said Colin Busby, a policy analyst at C.D. Howe and author of the backgrounder.

Having pools of potential soldiers in peacetime — who account for one-fifth or 26,000 of Canada’s armed forces — allows military planners to save on institutional and overhead costs. And with increasing operational demands in regions such as Afghanistan, there has been “unprecedented use” of the reserves, said the study.

But the disruption to an employer can be considerable. Pre-deployment training, an operational tour and post-tour leave can add up to 14 to 21 months for international deployments. Upon returning to work, reservists have the right to be reinstated to the position they left or a comparable position and some employers may attempt to avoid this whole issue by not hiring reservists or providing lower wages, said the report.

There’s a relationship between the military, reservists and employers of reservists that is not easy but is necessary and important, said Busby.

“There’s sort of three-way interests that need to be balanced,” he said.

Many reservists end up having to quit their jobs to serve, which is “appalling,” said Bob Bergen, an adjunct assistant professor at the University of Calgary’s Centre for Military and Strategic Studies.

“It’s very difficult for employers to deal with a soldier who goes away. They have to go through the process of hiring somebody, training them up, having them for a year-and-a-half and then, when the soldier comes back, get rid of them. Everybody loses.”

Some of the larger organizations, such as police forces, can be generous with reservist leaves, said Bergen.

“If you’re a small woodworking company, with a dozen employees and you lose one of your guys and he’s probably a leader because of the skills he’s got in the Canadian forces, if they lose him, it’s tough.”

Countries such as Australia and the United Kingdom offer employment compensation in addition to job protection, said Busby. Australia provides weekly compensation to employers while the U.K. compensates separately for hiring, overtime and retraining costs.

Canada would benefit from a hybrid of these, said Busby, by having a program that is easily administered and limits costs. Benefit levels would be based on compensation levels obtained from employer payroll data.

“An employee’s wage and salary is going to give you a reasonably good idea as to how much that employee is worth to that organization,” said Busby.

And greater benefits would be extended to smaller firms that “really feel the pinch for losing an employee temporarily,” he said.

Compensation would start at 40 per cent of a reservist’s annual salary for employers with 100 or more workers, 50 per cent for those with 20 to 99 workers, 60 per cent for those with 10 to 19 workers, 70 per cent for those with five to nine workers and be capped at 80 per cent for employers with one to five workers.

The overall cost of the program would be about $19 million in 2009 and $26 million in 2010 though, based on future deployment levels, annual costs could fall to $8 million in 2011, said Busby.

But to make it fair for the reservists and the companies that hire them, particularly small firms, they should be compensated 100 per cent, said Bergen.

“(This compensation scheme is a) kind of a typically Canadian, half-baked approach,” he said, citing Canada’s “hodge podge” of job protection for reservists. “Perhaps this sliding formula might make it more palatable for an employer but it doesn’t go far enough.”

Some might also argue there are parallels with other mandated workplace requirements where the costs of social obligations are transferred onto employers, such as maternity leave or jury duty, acknowledged the report.

But there’s a big difference in the way these policies are followed through on, said Busby.

“In the maternity leave example, it’s very difficult — I would say impossible — to hire a woman not of fertile age or at least consider them in their job pool. You will see employers across the country hiring women of fertile age, taking on those risks that they’re going to leave the job for a year and maybe not come back.”

So the costs of the obligation to society are spread out whereas, with reservists, it’s a “very targeted” displacement of the costs, said Busby.

But any group that enjoys a protected statutory leave could argue the employer is experiencing a hardship, said Robert Smithson, an employment and labour lawyer at Pushor Mitchell in Kelowna, B.C.

“This might be opening a big can of worms by which employers would be asking, ‘Why aren’t we being compensated in all these other instances?’” he said. “I honestly don’t know whether, from either an employer’s perspective or employee’s perspective, there’s any rampant need for either greater protections of the employees or compensation for the employers.”

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