No need to recognize new federal holiday thanks to collective agreement

'You shouldn't interpret it in a way that creates a disadvantage for the employer'

No need to recognize new federal holiday thanks to collective agreement

An Alberta employer is not required to add the National Day for Truth and Reconciliation to a list of holidays in its collective agreement because the day isn’t a legal holiday in the province, an arbitrator has ruled.

Key to the employer’s successful argument was language in the holiday provision that limited a broad interpretation, says Nathanael Bowles, an employment lawyer at McLennan Ross in Calgary.

“[The agreement’s] language can be interpreted to understand that the [new] holiday actually has to be specifically added provincially in order to be added [to the agreement], even if it's introduced by the federal government,” says Bowles.

“You don't want to interpret a collective agreement in a broad, expansive way that creates a benefit for one party and a disadvantage for the other.”

New federal holiday

MTE Logistix is a warehousing and distribution logistics company based in Edmonton. The collective agreement had a provision listing 11 specific days that would be treated as statutory holidays. The provision also stated that the list of holidays would be expanded “should the federal and/or provincial government add any additional statutory holidays.”

In June 2021, the federal government passed legislation creating the National Day for Truth and Reconciliation (NDTR), a holiday to be observed by federally regulated employers on Sept. 30 of each year starting in 2021. The Alberta provincial government did not make the day a holiday.

Since MTE was provincially regulated, it wasn’t legally required to make the day a holiday for employees. However, it allowed employees who wished to personally observe the day to take time off without pay. Employees had to sign up on sheets to take the day off, which many did. Such sign-up sheets were often used to manage work volumes in relation to factors outside of the company’s control.

MTE treated Sept. 30 as a regular operational day, as did many of its clients.

Read more: Ottawa has left it up to the provinces to determine if the new federal statutory holiday will be recognized in their jurisdictions.

The union filed two grievances – one over the sign-up sheet trying to get employees to take a statutory holiday off without pay and one over the fact that employees who took the day off weren’t paid while employees who worked that day were paid regular wages – arguing that MTE violated the collective agreement by not adding the NDTR to the list of holidays.

It said that the federal government added the holiday and therefore the day should be added in accordance with the holiday clause’s language.

MTE argued that the intention of the clause was to automatically add holidays that were binding in Alberta, which could be enacted either provincially or federally. In this case, the NTDR was not established as a statutory holiday in Alberta, the company said.

Competitive disadvantage

MTE also pointed out that its provincially regulated competitors and clients didn’t observe the NDTR, so there would be a competitive disadvantage if it shut down on the day – contrary to one of the objects of the collective agreement, which was to enhance competitiveness and productivity.

The arbitrator noted that MTE was a provincially regulated employer, so its holidays reflected what the Alberta legislature had enacted. In this case, the federal government added the NDTR to the Canada Labour Code – which applied only to federally regulated employers – but not the federal Holidays Act, which applied across Canada.

The arbitrator also noted that the use of “and/or” meant that either the provincial or federal government could adopt a new holiday, but the arbitrator also found that the intention was limited to provincial statutory holidays that applied to MTE’s operations.

The list of holidays in the collective agreement matched the statutory holidays enacted by the Alberta government with one exception – Boxing Day, which wasn’t a statutory holiday but had been added to the collective agreement. The fact that this day was included while Easter Monday – another federal holiday under the Canada Labour Code – suggested that the parties intended to include “only legal holidays and specifically negotiated days” as statutory holidays, said the arbitrator.

Read more: Open-ended language in its collective agreement forced a B.C. employer to add the National Day for Truth and Reconciliation to its list of holidays.

The arbitrator also found that MTE’s point on the collective agreement’s stated objective on enhancing competitiveness and productivity supported the company’s argument that only holidays in effect in Alberta were intended to be holidays in the agreement.

It was an interesting argument and a good point for the company to make, says Bowles.

“They said that, basically, that would create a competitive disadvantage if they were required to observe the [NDTR],” he says. “So it was saying that if there's a provision that could be interpreted a little bit ambiguously, you shouldn't interpret it in a way that creates a disadvantage for the employer without a good reason.”

Fair interpretation

Bowles adds that the general principles of interpretation mean that any collective agreement language that have some ambiguity shouldn’t be interpreted in a way that could be harmful to one of the parties.

“Remember the policy reasons for interpretation, which is that you don't want to interpret something that's somewhat ambiguous to disadvantage an employer,” he says. “Especially in a situation like this, where the collective agreement specifically states that the company and the union are going to co-operate fully to create greater productivity and competitiveness.”

The arbitrator determined that, when the collective agreement was read as a whole, there was no indication that MTE and the union intended to include federal holidays that didn’t legally apply to MTE’s operations. The parties could negotiate to add the NDTR to the holidays provision, but the day shouldn’t be automatically added, said the arbitrator in dismissing the grievances.

A good way to avoid an interpretation that is too broad – particularly when it comes to holidays – is to use language that specifically outlines the employer’s legal obligations, says Bowles.

“The clearest provisions of all are the ones that are very specific to a legal obligation – always include a list of currently existing statutory holidays,” he says. “You can even go stricter and say that any holiday that creates a legal obligation for the employer would be added – some sort of language that emphasizes that the employer actually has to be legally obligated.”

See TC, Local 362 and MTE Logistix Edmonton Inc., Re, 2022 CarswellAlta 1452.

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