Along with the media attention and labour uproar that heralded the Sept. 4 effective date of Ontario’s new Employment Standards Act, a series of new regulations were also issued, which came into effect on the same day.
While labour issues, such as provisions that allow for 60-hour work weeks when employees voluntary agree, make news, HR professionals should note less publicized changes, such as those to the Benefit Plans Regulation. The changes mean that both short- and long-term disability benefits (STD and LTD) must be extended to Ontario employees on maternity leave during the health-related portion of their absence. Furthermore, if STD and LTD coverage is provided for other leaves of absence, then employees who are on the voluntary portion of a maternity or parental leave will be entitled to the same protection.
Since the Supreme Court of Canada decision in Brooks v. Canada Safeway, a number of other Canadian jurisdictions have passed legislation stipulating that all benefits be continued during maternity and parental leaves.
The federal government, British Columbia and Manitoba provide that all benefits must be continued during maternity and parental leave. For benefits to continue in Saskatchewan, employees must pay for employee contributions. Nova Scotia employees must pay for both employer and employee contributions. While Quebec only prescribes that benefits must be continued during maternity leave, this has been interpreted as extending to parental leave.
In Ontario, language in the old Employment Standards Act (the ESA) and the Benefit Plan Regulation created the following anomaly:
•A general section of the legislation stated that “except as prescribed” employers must provide benefit plans including disability insurance plans that do not discriminate based on age, sex or marital status.
•The section that enumerates the specific benefits coverage that must be extended during maternity or parental leave does not include STD or LTD.
•Section 8 (c) of the Benefit Regulation specifically allowed employers to exclude a female employee during maternity or parental leave from STD and LTD benefits.
There has been an informal consensus among lawyers and other professionals familiar with section 8 (c) of the Benefits Regulations that a challenge under the Canadian Charter of Rights and Freedoms would likely succeed.
Unfortunately, a number of court cases attacking the discriminatory nature of section 8 (c) were based on narrow fact situations, and the resulting decisions did not provide clear guidance for employers.
While the new Benefit Plan Regulation repealed section 8 (c), no new provision was added that explicitly requires employers to extend disability benefits to employees on maternity leave or parental leave.
The Employment Standards Branch is taking the position that based on common law created by the decision in Brooks v. Canada Safeway, employers must extend STD and LTD coverage to women on maternity leave for only the health-related portion of the absence (the industry standard is six weeks in normal circumstances).
Disability benefit coverage for the balance of the maternity leave, parental leave (taken by either parent) or the new family emergency leave is only mandated under section 10 of the Benefit Plan Regulation if such coverage is available to employees taking other leaves of absence.
Many employers also grant employees a few paid personal or bereavement days a year with continuation of benefits, but it is not clear if these would be considered as “other leaves of absence” under the regulation.
Where longer leaves of absence or sabbaticals are available, disability coverage is generally suspended, because the employees are “not actively at work” during the period.
Therefore, subject to clarification of the precise meaning of the term “leave of absence,” many employers in Ontario will be in compliance with the new Benefit Plan Regulation even if they only extend disability benefits for the health-related part of maternity leaves. However, it is important to recognize that this restricted approach may not make good business sense for a number of reasons:
•Employers with a workforce in multiple jurisdictions including those governed by the Canada Labour Code, B.C., Manitoba, Quebec and Nova Scotia may wish to treat all of their employees consistently.
•On the date a disabled employee is due to return to work after a maternity or parental leave, he or she may be eligible to receive STD or LTD benefits. If coverage was cancelled during the leave, the employer could be responsible for paying an expensive uninsured claim.
Ontario employers should consider current benefits programs and practices to determine if changes are required in order to satisfy either business objectives or the new rules.
Sheryl Smolkin is a lawyer and director of Watson Wyatt Worldwide’s Canadian Research & Information Centre in Toronto. She can be reached at [email protected].
While labour issues, such as provisions that allow for 60-hour work weeks when employees voluntary agree, make news, HR professionals should note less publicized changes, such as those to the Benefit Plans Regulation. The changes mean that both short- and long-term disability benefits (STD and LTD) must be extended to Ontario employees on maternity leave during the health-related portion of their absence. Furthermore, if STD and LTD coverage is provided for other leaves of absence, then employees who are on the voluntary portion of a maternity or parental leave will be entitled to the same protection.
Since the Supreme Court of Canada decision in Brooks v. Canada Safeway, a number of other Canadian jurisdictions have passed legislation stipulating that all benefits be continued during maternity and parental leaves.
The federal government, British Columbia and Manitoba provide that all benefits must be continued during maternity and parental leave. For benefits to continue in Saskatchewan, employees must pay for employee contributions. Nova Scotia employees must pay for both employer and employee contributions. While Quebec only prescribes that benefits must be continued during maternity leave, this has been interpreted as extending to parental leave.
In Ontario, language in the old Employment Standards Act (the ESA) and the Benefit Plan Regulation created the following anomaly:
•A general section of the legislation stated that “except as prescribed” employers must provide benefit plans including disability insurance plans that do not discriminate based on age, sex or marital status.
•The section that enumerates the specific benefits coverage that must be extended during maternity or parental leave does not include STD or LTD.
•Section 8 (c) of the Benefit Regulation specifically allowed employers to exclude a female employee during maternity or parental leave from STD and LTD benefits.
There has been an informal consensus among lawyers and other professionals familiar with section 8 (c) of the Benefits Regulations that a challenge under the Canadian Charter of Rights and Freedoms would likely succeed.
Unfortunately, a number of court cases attacking the discriminatory nature of section 8 (c) were based on narrow fact situations, and the resulting decisions did not provide clear guidance for employers.
While the new Benefit Plan Regulation repealed section 8 (c), no new provision was added that explicitly requires employers to extend disability benefits to employees on maternity leave or parental leave.
The Employment Standards Branch is taking the position that based on common law created by the decision in Brooks v. Canada Safeway, employers must extend STD and LTD coverage to women on maternity leave for only the health-related portion of the absence (the industry standard is six weeks in normal circumstances).
Disability benefit coverage for the balance of the maternity leave, parental leave (taken by either parent) or the new family emergency leave is only mandated under section 10 of the Benefit Plan Regulation if such coverage is available to employees taking other leaves of absence.
Many employers also grant employees a few paid personal or bereavement days a year with continuation of benefits, but it is not clear if these would be considered as “other leaves of absence” under the regulation.
Where longer leaves of absence or sabbaticals are available, disability coverage is generally suspended, because the employees are “not actively at work” during the period.
Therefore, subject to clarification of the precise meaning of the term “leave of absence,” many employers in Ontario will be in compliance with the new Benefit Plan Regulation even if they only extend disability benefits for the health-related part of maternity leaves. However, it is important to recognize that this restricted approach may not make good business sense for a number of reasons:
•Employers with a workforce in multiple jurisdictions including those governed by the Canada Labour Code, B.C., Manitoba, Quebec and Nova Scotia may wish to treat all of their employees consistently.
•On the date a disabled employee is due to return to work after a maternity or parental leave, he or she may be eligible to receive STD or LTD benefits. If coverage was cancelled during the leave, the employer could be responsible for paying an expensive uninsured claim.
Ontario employers should consider current benefits programs and practices to determine if changes are required in order to satisfy either business objectives or the new rules.
Sheryl Smolkin is a lawyer and director of Watson Wyatt Worldwide’s Canadian Research & Information Centre in Toronto. She can be reached at [email protected].
