Maternity and parental leave: Implications for employers

Ten provinces, three territories and a federal government give birth to a jurisdictional patchwork

Many employers have now been through the experience of employees taking and returning from year-long maternity and parental leaves, made possible with changes to federal and provincial employment standards legislation throughout 2001.

This has raised a multitude of questions about how to handle issues arising during the leave and on the employee’s return. Employers want to ensure they comply with the law and treat employees using maternity and parental leave fairly. Set out below are some common scenarios:

Scenario: A company hires someone on contract to cover for an employee who took maternity leave followed by parental leave. The replacement employee has done a better job than the employee on leave ever did, and the company wants the new hire to continue in that role.

How to handle: The legislation in Quebec, Ontario and Nova Scotia states that an employee returning from maternity or parental leave must be reinstated to her former position, if it exists.

A position exists even if someone else is doing the job. It is unavailable if it’s been eliminated, for example, through a legitimate reorganization and for reasons unrelated to the leave. In the event the position occupied by the employee prior to her leave does not exist, employers in Quebec, Ontario and Nova Scotia are required to reinstate the employee to a comparable position.

The other provincial employment standards laws require an employee be reinstated to the position the employee occupied prior to the leave or to a comparable position. In Ontario, Quebec and Nova Scotia, there appears to be a more onerous obligation on employers, as the ability to place an employee in a comparable or alternate position is available only where the pre-leave position no longer exists.

Unfortunately, what constitutes a comparable position is undefined, and may be subject to interpretation. It is clear the employee’s salary and position must be at least equal to what she received prior to the leave.

With regard to other conditions of employment, what an employer sees as comparable may not match the employee’s view. Certainly, if the employee’s new duties and responsibilities, direct supervisor, hours or method of remuneration are radically different from the former position, a court is not likely to interpret the new position as comparable. The Canada Labour Code (which applies to federally regulated employers) specifies that if it’s not possible to reinstate the employee to the former position, the employee is to assume a comparable position with the same wages and benefits and in the same location.

It should be noted that Quebec has adopted something of a hybrid position on reinstatement. Employees returning from maternity leave must get their old jobs back. The same goes for those who return from parental leave after 12 weeks or less. However, if an employee’s parental leave extends past 12 weeks, she may be assigned a comparable position. The Quebec Labour Standards Code also requires that if the position no longer exists, the employee is entitled to all rights and privileges to which she would have been entitled had she continued to work. Although the legislation does not define the rights and privileges at issue, presumably she would be entitled to recall or transfer rights, or any severance package that might apply.

Scenario: Both parents want to take the full period of parental leave.

How to handle: Full parental leave from employment is available to each parent in 10 jurisdictions. However, the Canada Labour Code and the legislation in Alberta, New Brunswick and the Yukon provide that, if both parents want to take parental leave, the leave period must be shared between them. In addition, in the Yukon both parents cannot take parental leave at the same time, except in cases of illness or hardship.

In Alberta, if both parents work for the same employer, the employer does not have to permit the two employees to take leave simultaneously.

One or both parents may apply for the 35 weeks of EI parental benefits. If they both apply, however, they share it. The parents’ combined benefits claim cannot exceed 35 weeks. Only one two-week waiting period before benefits begin needs to be served per birth or adoption.

Scenario: An employee planning on taking leave wants to know what benefits she is entitled to.

How to handle: Employees in several jurisdictions are allowed to maintain certain benefits (such as pension, life insurance, accidental death, medical and dental plans) during their leaves. This is usually dependent on the payment by the employee of her share of the benefits premiums (British Columbia, Manitoba, Ontario, Quebec, Saskatchewan and the federal jurisdiction). In Nova Scotia, an employee may maintain benefit plans provided she pays her own share of the cost and the employer’s share.

Scenario: An employee on maternity or parental leave wants to know if the employer has to continue to provide short- and long-term disability coverage.

How to handle: If any portion of the absence before or after the birth is related to a substantiated medical condition, the employee would be entitled to such short-term disability benefits as are available in the workplace. The courts have held that to deny such benefits solely because the absence arises out of pregnancy or giving birth is discriminatory and a breach of human rights legislation. However, as with all cases of medical absence, an employer has the right to ask for proof of the employee’s illness.

Some court and arbitration decisions have taken the approach that the first six to eight weeks of absence after the birth of the child are medically related.

Therefore, during that period the employee may qualify for such disability coverage as the employer may offer other employees. In response to this line of cases, some employers have established policies where the EI benefits received by the employee are automatically topped up to what that employee would have received from the short-term disability program for the six-to-eight-week period after the birth. The top up can be provided by an insurance policy or be self-funded by the employer.

During the balance of the leave, however, there is no legislated requirement to continue disability coverage.

Scenario: What happens to pensions during the maternity and parental leave?

How to handle: The requirements for pension benefits accrual during a maternity and parental leave differ from province to province. Under the Canada Labour Code, and in British Columbia, Nova Scotia and Ontario, pension benefits continue to accrue during the leave unless the employee suspends her own contributions. In Nova Scotia and Saskatchewan, the pension benefits accrue provided the employee pays the full cost, including the employer’s share of contributions. Quebec’s approach is again a hybrid: benefits will continue to accrue during the maternity leave unless the employee suspends her contributions, but there is no requirement for the employer to continue benefits accrual during parental leave.

To ascertain the level of employer contributions during a leave, where they are based on a percentage of salary, the applicable employment standards branch should be contacted. There may also be applicable practice policies put out by the provincial pension authority. For example, in Ontario, the employer cannot make it a requirement that the employee return after the leave in order to be entitled to employer contributions during the leave. It is prudent to address these issues by way of amendment to the pension plan text.

Adrienne Campbell is a lawyer and legal consultant in Hewitt Associates’ Toronto office and can be contacted at (416) 225-5001 or [email protected] Peigi Ross practises employment and labour lawyer with the Toronto law firm of Hicks Morley and can be contacted at (416) 864-7219 or [email protected]

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