Substituting new holiday for existing personal day can be done but there's a risk of breaching a contract
Question: My company, located in Ontario, currently provides two floating days off, in addition to the statutory holidays. With the addition of the February statutory holiday, we are considering dropping one of the floaters. Do you see any issues with that?
Answer: Any time there is a legislative change such as the creation of a new statutory holiday, it is important that employers consider the new legislation and whether it impacts upon their rights and obligations as an employer. The question raised is an important one to consider in light of the addition of the new holiday.
If an employer is unionized, the specific wording of the collective bargaining agreement might determine whether or not the employer has the right to unilaterally drop one of the floating holidays without negotiating with the union. If the collective agreement stipulates the two floating days off are in addition to statutory holidays, the employer may not have the unilateral right to drop one of them.
Alternatively, if the collective agreement simply outlines the total number of holidays, the employer may have the right to replace one of the floating holidays with the new one. The specific language in the agreement should be reviewed to assess whether the employer has the right to make the change. If there is some ambiguity, it may be necessary to look outside of the collective agreement to the negotiating history of the provision and any past practice.
In Ontario, as elsewhere in the country, it is not open to an employer to contract to provide less than the minimum standards set out in the applicable employment standards legislation. Conversely, under the Employment Standards Act, 2000, where an employment contract, including a collective bargaining agreement, provides for greater benefits with respect to “the same subject matter,” the terms of the contract supersede the minimum requirements of the employment standards legislation. In the situation outlined above, it is unlikely the employer would be in contravention of the legislation. It would appear from the question the employer is already providing more holidays than the minimum list in the act.
If it is a non-union setting, it is still important to consider the wording of any written employment contracts with employees. If there are written employment contracts, the interpretative exercise will be largely similar to the approach described for a collective bargaining agreement above. The employer needs to determine based on the specific contractual language if you have the right to drop one of the floating holidays and to replace it with the February statutory holiday. If the proposed change, however, represents an alteration of the existing terms of any written employment contract, the change could be seen as constituting constructive dismissal.
As a general rule, the employer does not have the unilateral right to simply remove a holiday from an employment contract unless there is reasonable notice or the employee agrees to the change. The outcome may be less clear if there is no specific written employment contract in place. If the contracts are largely verbal, there may be some difficulty determining the precise entitlement when it comes to annual holidays. In the absence of a written provision describing an employee’s entitlement to statutory and floating holidays, the verbal communications between the employer and employees as well as past practice can be used to determine what the contractual entitlement might be. If the change represents a variation in existing contractual rights, it will require the consent of the employees affected and prior sufficient working notice.
In addition to these observations, it is important that readers recognize different considerations may apply depending on the wording of the applicable employment standards legislation in each jurisdiction. For example, an employment standards statute may say it operates in addition to any benefits set out by contract, and may not permit an employer to contract out of the terms of statutory holiday provisions by providing greater global holiday benefits. In such a case, the employer will be required to provide a new statutory holiday in addition to its existing floating holidays even where the collective bargaining agreement or other contract does not specifically entitle employees to the new holiday. This was the outcome in the case of Stelco Inc. Edmonton Steel Works and U.S.W.A. Local 5220.
It is important to have regard to the specific employment standards legislation in each individual jurisdiction and to examine the explicit wording, if such exists, of the collective bargaining agreement or employment contract that governs the rights and obligations of employer and employee.
For more information see:
• Stelco Inc. Edmonton Steel Works and U.S.W.A., Local 5220, (1992), 24 L.A.C. (4th) 289 (Alta. Arb. Bd.).
Brian Kenny is a partner with MacPherson Leslie and Tyerman LLP in Regina. He can be reached at (306) 347-8421 or [email protected].
Answer: Any time there is a legislative change such as the creation of a new statutory holiday, it is important that employers consider the new legislation and whether it impacts upon their rights and obligations as an employer. The question raised is an important one to consider in light of the addition of the new holiday.
If an employer is unionized, the specific wording of the collective bargaining agreement might determine whether or not the employer has the right to unilaterally drop one of the floating holidays without negotiating with the union. If the collective agreement stipulates the two floating days off are in addition to statutory holidays, the employer may not have the unilateral right to drop one of them.
Alternatively, if the collective agreement simply outlines the total number of holidays, the employer may have the right to replace one of the floating holidays with the new one. The specific language in the agreement should be reviewed to assess whether the employer has the right to make the change. If there is some ambiguity, it may be necessary to look outside of the collective agreement to the negotiating history of the provision and any past practice.
In Ontario, as elsewhere in the country, it is not open to an employer to contract to provide less than the minimum standards set out in the applicable employment standards legislation. Conversely, under the Employment Standards Act, 2000, where an employment contract, including a collective bargaining agreement, provides for greater benefits with respect to “the same subject matter,” the terms of the contract supersede the minimum requirements of the employment standards legislation. In the situation outlined above, it is unlikely the employer would be in contravention of the legislation. It would appear from the question the employer is already providing more holidays than the minimum list in the act.
If it is a non-union setting, it is still important to consider the wording of any written employment contracts with employees. If there are written employment contracts, the interpretative exercise will be largely similar to the approach described for a collective bargaining agreement above. The employer needs to determine based on the specific contractual language if you have the right to drop one of the floating holidays and to replace it with the February statutory holiday. If the proposed change, however, represents an alteration of the existing terms of any written employment contract, the change could be seen as constituting constructive dismissal.
As a general rule, the employer does not have the unilateral right to simply remove a holiday from an employment contract unless there is reasonable notice or the employee agrees to the change. The outcome may be less clear if there is no specific written employment contract in place. If the contracts are largely verbal, there may be some difficulty determining the precise entitlement when it comes to annual holidays. In the absence of a written provision describing an employee’s entitlement to statutory and floating holidays, the verbal communications between the employer and employees as well as past practice can be used to determine what the contractual entitlement might be. If the change represents a variation in existing contractual rights, it will require the consent of the employees affected and prior sufficient working notice.
In addition to these observations, it is important that readers recognize different considerations may apply depending on the wording of the applicable employment standards legislation in each jurisdiction. For example, an employment standards statute may say it operates in addition to any benefits set out by contract, and may not permit an employer to contract out of the terms of statutory holiday provisions by providing greater global holiday benefits. In such a case, the employer will be required to provide a new statutory holiday in addition to its existing floating holidays even where the collective bargaining agreement or other contract does not specifically entitle employees to the new holiday. This was the outcome in the case of Stelco Inc. Edmonton Steel Works and U.S.W.A. Local 5220.
It is important to have regard to the specific employment standards legislation in each individual jurisdiction and to examine the explicit wording, if such exists, of the collective bargaining agreement or employment contract that governs the rights and obligations of employer and employee.
For more information see:
• Stelco Inc. Edmonton Steel Works and U.S.W.A., Local 5220, (1992), 24 L.A.C. (4th) 289 (Alta. Arb. Bd.).
Brian Kenny is a partner with MacPherson Leslie and Tyerman LLP in Regina. He can be reached at (306) 347-8421 or [email protected].
