Two weeks ago, our Firm wrote about Ontario’s new COVID-19 paid leave program, introduced into the Employment Standards Act, 2000 (the ESA) (“Paid IDEL“).
There remains limited practical information online about how the Province plans to interpret the new law. However, the Ministry of Labour has now set up a dedicated hotline that employers and employees can use to gain additional information.
After multiple discussions with hotline staff, we have learned that the Ministry of Labour is clarifying when an employer can deduct their pre-existing paid leave benefits (like contractual paid sick days) from the three days of paid COVID-19 sick leave entitlement in the ESA.
Deductions from Paid IDEL Based on the ESA
As we wrote previously, the new law states that an employer can use their current paid leave benefits to offset their paid COVID-19 leave so long as:
- The pre-existing leave entitlements apply to any of the same situations where paid COVID-19 leave would be available;
- The employee had the pre-existing paid leave days available for use (i.e., had not exhausted them) on April 19, 2021; and
- The employee would receive at least as much pay under the pre-existing paid leave as they would be entitled to receive under the new paid COVID-19 leave.
New Ministry of Labour Guidance on Deductions
The Ministry of Labour representatives have now informed us of the Ministry of Labour’s clarification of the above requirements that are soon to be released in a Frequently Asked Questions document. According to the Ministry of Labour, an employer can deduct their pre-existing paid leave benefits form the days of paid COVID-19 leave if all of the following criteria are met:
- The pre-existing leave can be used for one or more of the reasons that an employee can use the paid COVID-19 leave (but it does not have to be available for all of the same reasons);
- The employee did not already used up those pre-existing leave days before April 19, 2021.
- The pre-existing leave provides at least as much pay as the employee would be entitled to receive for the paid COVID-19 leave; and
- The pre-existing leave does not contain conditions that are more restrictive than those under the new paid COVID-19 leave.
Implications for Employees with Existing Contractual Sick Entitlements
First, this clarifies that the pre-existing leave just has to apply to one of the circumstances where the new leave applies. It does not have to cover all of the same scenarios.
Second, and more importantly, this guidance expands what the plain language of the ESA provides by saying that the pre-existing benefit cannot impose restrictions that are more restrictive than the new paid COVID-19 leave. If the Ministry of Labour is correct about this, this could mean many employees with generous sick leave entitlements under employment contracts and collective agreements will be entitled to paid COVID-19 leave on top of their existing entitlements. One of the rules for the new paid COVID-19 program is that an employer cannot require an employee to provide a medical note to prove their eligibility. However, many currently existing sick leave plans require this in one way or another. This could be a higher restriction than the benefit allows
This leads to a number of questions (note, all of these scenarios would also need to meet all of the other requirements for discounting pre-existing paid leave programs):
- What if an employer’s sick leave program “requires” a doctors note for sick leave?
- What if the requirement applies only after a certain number of days of consecutive absence?
- If a sick note is required after 3 days, but not after 2 days, does that mean the entitlement to paid COVID-19 leave is reduced by 2 days?
- What if the employer “may” require a doctor’s note, but doesn’t mandate it?
- What if the doctor’s note isn’t tied to granting paid sick leave, but rather being a requirement of return to work at the end of the leave?
The Ministry of Labour’s interpretation of the law leads to further uncertainty for employers and it may well be that their interpretation is incorrect. It’s not unheard of for a court or tribunal to disagree with the Ministry when the language of the legislation doesn’t support their position. After all, the new requirement is not in the explicit text of the new ESA provisions about the new paid COVID-19 leave.
However, in the absence of any case law yet, the Ministry of Labour’s interpretation is currently the only official interpretation of the legislation that we have. While that guidance helps us to answer some questions, it raises new questions as well.
Ultimately, employer’s need clear and definitive answers from the WSIB in conjunction with the Ministry of Labour before they undertake paying out paid COVID-19 leave to employees who have existing contractual entitlements. If the WSIB (that is charged with administering the leave) ultimately refuses to reimburse an employer because the employee in question had an existing contractual entitlement, the employer could be left holding the bag for the additional paid time off with limited options for recovery in the absence of an agreement on deductions from future wages.
PooranLaw will continue to monitor legal developments related to COVID-19 paid leave. In the meantime, if you require legal assistance in determining how these new rules apply to you or your organization, we encourage you to reach out to your regular PooranLaw lawyer, or any member of our team.
Note: This article provides general information only and does not constitute, and should not be relied upon as, legal advice or opinion. PooranLaw Professional Corporation holds the copyright to this article and the article and its contents may not be copied or reproduced in any form, in whole or in part, without the express permission of PooranLaw Professional Corporation.