Employment standards, 'pooled' days can complicate the issue for employers
By Stuart Rudner
There is widespread confusion regarding the entitlement to paid days off in circumstances where, for example, an employee is sick or has lost a loved one. There seems to be a common view employees are entitled to a minimum number of sick days, bereavement days or other days, which is not necessarily true.
Confusing the issue even further is many employers have attempted to simplify their policies and procedures by grouping the paid days they choose to offer together (often referring to them as “paid time off”), which can result in a breach of employment standards legislation and expose the employer to unintended liability when it was, in many cases, attempting to offer a benefit to employees that they do not have to.
Employment standards legislation in each jurisdiction sets out the minimum rights employees are entitled to. With respect to days off, every jurisdiction establishes a minimum amount of vacation time employees must be given.
However, contrary to popular belief, most employment standards legislation does not provide that every employee is entitled to sick days or bereavement leave. While those benefits may be offered pursuant to a collective agreement, an individual contract of employment or a workplace policy, they do not have to be (with some exceptions, as discussed below).
By default, an employee who is unable to work due to sickness would not be paid for the days she misses. And while a smart employer will not dismiss an individual for taking time off when she is sick or in a period of bereavement, excessive absenteeism can result in dismissal.
One relatively recent exception to the comments above is the amendment to Ontario's Employment Standards Act, 2000, which now provides for emergency leave. This leave allows for up to 10 days off each year in circumstances including illness of the employee or a family member, death of a family member or other “emergencies.”
Historically, particularly in light of the fact many employees were not entitled to paid sick days or bereavement leave, practices developed whereby employees would use their vacation time in order to avoid interruptions in pay.
At the same time, many organizations in the United States, where the laws are different, have adopted paid time off policies whereby employees are entitled to a certain number of paid days off each year which can be used for vacation, sick days, bereavement leave or other personal matters. No attempt is made to delineate how many of each type of day off an employee can have; they simply have a “pool" of days off that they can use.
My firm works with many U.S.-based organizations and when we review their policies, we are often asked whether they can use a similar approach in Canada. Typically, I advise against it as it has the potential to result in a finding that the employer has breached its employment standards obligations.
As readers will know, employers cannot offer less than the benefits required by employment standards legislation. Because paid time off policies do not establish a minimum number of days for certain types of time off, there is a risk they will fall below those thresholds.
For example, an employer that provides 20 days (four weeks) of paid time off each year might have an employee who becomes seriously ill and uses three of those weeks as sick days. As a result, he will only be taking one week of vacation, which is less than the minimum required by statute.
Similarly, if an organization has more than 50 employees, and must provide emergency leave but does not delineate between emergency leave and vacation, it is possible an employee will use most or all of the paid time off for vacation, and then require emergency leave at the end of the year — when no days are left.
Of course, it is open to employers to take the position that by providing paid time off, they are offering an equal or greater benefit than that required by statute. If the ministry accepts this position, then there would be no breach of the legislation. However, it is possible this position would not be accepted.
While it would be impossible to review every potential scenario in this article, the key takeaway for both employees and employers is they must be sure they understand their rights and obligations when it comes to time off. Employees should not assume they have entitlements without confirming this, and employers should ensure they do not inadvertently breach their legal obligations and expose themselves to liability.