Arbitrator grapples with question of whether or not employers can force workers on disability to use vacation time
Can an employee be required to take his unused vacation while still on a short-term disability (STD) claim?
That was the question Shiraz Asser asked in December 2004 after his employer, Old Dutch Foods in Alberta, put him on vacation from Dec. 20 to Dec. 24 while he was still on disability. At the end of his vacation, Asser’s short-term disability continued where it had left off. In other words, his vacation did not count as part of the 26 weeks of STD for which he was eligible. Nevertheless, he felt shortchanged.
His union agreed and launched a grievance that went to arbitration before a three-person arbitration board. The union presented several arguments upholding Asser’s point of view.
The union’s view
The first was “the fundamental reason for absence” principle under which an employer cannot take an employee who is absent for one reason (illness) and designate him as absent for another (vacation). Second, the union saw the move as an unreasonable exercise of management rights. Third, it was discriminatory in that by forcing employees to use vacation to cover sick leave, the company was denying employees a benefit they would have been entitled to had they not been ill. After all, if the company could allow employees who became ill while on vacation to reschedule their vacation, why could they not do the same for those already ill, the union said.
In addition, the specific language in article 7.3 of the collective agreement, which said “earned vacation shall be scheduled,” lent itself to a more liberal interpretation than what the company used. The phrase “shall be scheduled” did not mean the vacation was required, especially if the more stringent interpretation ran afoul of human rights law. And finally, if all else failed, the union fell back on the rather fragile argument that if employees had to use up their vacation, then they should receive their vacation payout as well as STD benefits –– no pyramiding was involved, according to the union, as they were distinct, not overlapping, benefits.
The company’s view
The company opened its dictionary to point out that the use of the verb “shall” was not only formal but also determinative. It said what it meant and meant what it said. If it hadn’t intended a requirement for taking vacation, it wouldn’t have phrased it so. There was no discrimination: it did not matter why employees had not used their vacation time. If they had not used it by the end of the year, they were placed on vacation.
It was the same for Asser. He did not lose any benefit time so there was no discrimination against him. He, like everyone else in the same situation, simply found himself taking vacation at a time not of his own choosing. And as far as receiving pay for both absences, that was out of the question, the company said. Finally, there was a precedent in several other employees who had been on STD claims and whose claims had been temporarily suspended while they were given their vacation.
The arbitrator’s decision
The arbitrator agreed with the company. Citing Canadian Labour Arbitration, a text written by Donald Brown and David Beatty and published by Canada Law Book, he noted arbitrators have traditionally allowed employers considerable leeway in the scheduling of vacations. He reaffirmed that arbitrators should not interfere with management’s decision to schedule vacation time “even though it may impact adversely on…the employee.”
The arbitrator admitted this particular situation involving the interplay between vacations and sick leave seemed unique –– at least it did not appear in this precise form in any of the cases cited by either the union or Old Dutch Foods. As a result, the arbitrator depended –– as often happens –– on the “particular contract language and the factual elements of the case.”
He found the language of article 7.3 was not permissive. “The wording clearly indicates that vacations must be used…by year end,” he said.
The only time vacation time might be deferred was when the employee became sick while on vacation. The arbitrator reasoned that since the parties had put their minds to this facet of the interplay between vacation and illness, they could have negotiated a different set of circumstances for governing unused vacation at year’s end if they had wanted to. They did not and it was well within management’s rights to act on the existing wording.
The arbitrator also found this particular set of circumstances and contract language did not lend itself to the union’s argument based on the “fundamental reason for absence” principle. He drew attention to many cases in which arbitrators allowed employers to place employees on vacation despite the fact they were receiving sick leave benefits. Most of these vacation times occurred because of an annual shutdown of the entire plant. The arbitrator drew an analogy between a scheduled vacation, such as a plant shutdown, and the requirement to use up vacation before the end of the year.
“Here the calendar is dictating the scheduling of the vacation in the same way that a plant shutdown dictated vacation time in other cases,” he said.
Not only that, but in this particular situation, the company had a history of ordering just such vacation times for employees in similar circumstances. So the decision in this case had the weight of precedents behind it, even if an argument could have been made for the thinness of the analogy.
Nor was the employer deliberately manipulating the schedule to deprive the worker of a benefit. It had acted “reasonably, fairly, and in good faith” in exercising its rights as management. In fact, the vacation pay was higher than the amount Asser was receiving from his STD.
Because Asser did not lose vacation time, his STD entitlement or his financial compensation, the charge that Old Dutch Foods discriminated against him on the basis of being disabled did not hold water.
Last, and probably least, there was no hope Asser could collect from both sources. Since he was already on a paid vacation, there was no loss of income to insure against.
As a result, Old Dutch Foods did not violate the collective agreement when it required Asser to go on vacation. The union nominee dissented but to no avail, as the arbitrator, along with the employer nominee to the Board, denied the grievance.
For more information see:
Old Dutch Foods Limited and UFCW, Local 373A, an Alberta Arbitration Board decision; Allen Ponak — Arbitrator; Martial Boulet and Tom Hesse –– Nominees. Dated April 1, 2006.
Lorna Harris is the assistant editor of Canadian HR Reporter’s sister publication CLV Reports, newsletters that report on collective bargaining and other issues in labour relations. She can be reached at (416) 298-5141 ext. 2617 or [email protected].
That was the question Shiraz Asser asked in December 2004 after his employer, Old Dutch Foods in Alberta, put him on vacation from Dec. 20 to Dec. 24 while he was still on disability. At the end of his vacation, Asser’s short-term disability continued where it had left off. In other words, his vacation did not count as part of the 26 weeks of STD for which he was eligible. Nevertheless, he felt shortchanged.
His union agreed and launched a grievance that went to arbitration before a three-person arbitration board. The union presented several arguments upholding Asser’s point of view.
The union’s view
The first was “the fundamental reason for absence” principle under which an employer cannot take an employee who is absent for one reason (illness) and designate him as absent for another (vacation). Second, the union saw the move as an unreasonable exercise of management rights. Third, it was discriminatory in that by forcing employees to use vacation to cover sick leave, the company was denying employees a benefit they would have been entitled to had they not been ill. After all, if the company could allow employees who became ill while on vacation to reschedule their vacation, why could they not do the same for those already ill, the union said.
In addition, the specific language in article 7.3 of the collective agreement, which said “earned vacation shall be scheduled,” lent itself to a more liberal interpretation than what the company used. The phrase “shall be scheduled” did not mean the vacation was required, especially if the more stringent interpretation ran afoul of human rights law. And finally, if all else failed, the union fell back on the rather fragile argument that if employees had to use up their vacation, then they should receive their vacation payout as well as STD benefits –– no pyramiding was involved, according to the union, as they were distinct, not overlapping, benefits.
The company’s view
The company opened its dictionary to point out that the use of the verb “shall” was not only formal but also determinative. It said what it meant and meant what it said. If it hadn’t intended a requirement for taking vacation, it wouldn’t have phrased it so. There was no discrimination: it did not matter why employees had not used their vacation time. If they had not used it by the end of the year, they were placed on vacation.
It was the same for Asser. He did not lose any benefit time so there was no discrimination against him. He, like everyone else in the same situation, simply found himself taking vacation at a time not of his own choosing. And as far as receiving pay for both absences, that was out of the question, the company said. Finally, there was a precedent in several other employees who had been on STD claims and whose claims had been temporarily suspended while they were given their vacation.
The arbitrator’s decision
The arbitrator agreed with the company. Citing Canadian Labour Arbitration, a text written by Donald Brown and David Beatty and published by Canada Law Book, he noted arbitrators have traditionally allowed employers considerable leeway in the scheduling of vacations. He reaffirmed that arbitrators should not interfere with management’s decision to schedule vacation time “even though it may impact adversely on…the employee.”
The arbitrator admitted this particular situation involving the interplay between vacations and sick leave seemed unique –– at least it did not appear in this precise form in any of the cases cited by either the union or Old Dutch Foods. As a result, the arbitrator depended –– as often happens –– on the “particular contract language and the factual elements of the case.”
He found the language of article 7.3 was not permissive. “The wording clearly indicates that vacations must be used…by year end,” he said.
The only time vacation time might be deferred was when the employee became sick while on vacation. The arbitrator reasoned that since the parties had put their minds to this facet of the interplay between vacation and illness, they could have negotiated a different set of circumstances for governing unused vacation at year’s end if they had wanted to. They did not and it was well within management’s rights to act on the existing wording.
The arbitrator also found this particular set of circumstances and contract language did not lend itself to the union’s argument based on the “fundamental reason for absence” principle. He drew attention to many cases in which arbitrators allowed employers to place employees on vacation despite the fact they were receiving sick leave benefits. Most of these vacation times occurred because of an annual shutdown of the entire plant. The arbitrator drew an analogy between a scheduled vacation, such as a plant shutdown, and the requirement to use up vacation before the end of the year.
“Here the calendar is dictating the scheduling of the vacation in the same way that a plant shutdown dictated vacation time in other cases,” he said.
Not only that, but in this particular situation, the company had a history of ordering just such vacation times for employees in similar circumstances. So the decision in this case had the weight of precedents behind it, even if an argument could have been made for the thinness of the analogy.
Nor was the employer deliberately manipulating the schedule to deprive the worker of a benefit. It had acted “reasonably, fairly, and in good faith” in exercising its rights as management. In fact, the vacation pay was higher than the amount Asser was receiving from his STD.
Because Asser did not lose vacation time, his STD entitlement or his financial compensation, the charge that Old Dutch Foods discriminated against him on the basis of being disabled did not hold water.
Last, and probably least, there was no hope Asser could collect from both sources. Since he was already on a paid vacation, there was no loss of income to insure against.
As a result, Old Dutch Foods did not violate the collective agreement when it required Asser to go on vacation. The union nominee dissented but to no avail, as the arbitrator, along with the employer nominee to the Board, denied the grievance.
For more information see:
Old Dutch Foods Limited and UFCW, Local 373A, an Alberta Arbitration Board decision; Allen Ponak — Arbitrator; Martial Boulet and Tom Hesse –– Nominees. Dated April 1, 2006.
Lorna Harris is the assistant editor of Canadian HR Reporter’s sister publication CLV Reports, newsletters that report on collective bargaining and other issues in labour relations. She can be reached at (416) 298-5141 ext. 2617 or [email protected].
