Last year, the Ontario Divisional Court reaffirmed that employers may reduce benefit entitlements of an employee who works reduced hours due to a disability, without violating the Ontario Human Rights Code.
In City of Toronto v. Canadian Union of Public Employees, Local 79, the employer discontinued its practice of permitting employees working part-time hours to remain in the full-time bargaining unit, meaning that an employee who worked part-time hours as an accommodation for a disability suffered a reduction in their benefit entitlements. In its judicial review of an arbitration award made as a result, the court held that the reduction to the employee’s benefit entitlements was not discriminatory under the Code.
The employee started working for the City of Toronto in 1991 in a full-time position, as a Caseworker in the Toronto Employment and Social Services Division. A member of the full-time bargaining unit represented by the Canadian Union of Public Employees, Local 79, the employee received greater benefit entitlements than employees in part-time bargaining units.
In 1999, the City accommodated the employee, who was living with disability, by allowing him to work a four-day week. Despite being on a part-time schedule, the employee remained in the full-time bargaining unit and continued to enjoy the privileges of that status, including the benefits provided to full-time employees.
At the employer’s request, the employee provided medical documentation which indicated that his need for accommodation was permanent.
When the City’s collective agreement with the union expired in 2016, seventeen years after the employee’s accommodation was first put in place, the employer notified the union that it was discontinuing its practice of allowing employees who had no reasonable expectation of returning to full-time hours to remain in the full-time bargaining unit. Following a two-year transition period, the employer moved the employee into the part-time bargaining unit and his benefits were pro-rated.
The union grieved the transfer, arguing that it violated the collective agreement and constituted discrimination against the grievor.
The arbitrator upheld the grievance. While she found that the transfer was within the scope of the employer’s management rights under the collective agreement, she held that the change to the grievor’s existing accommodation amounted to a violation of the Code. The arbitrator ordered the employer to return the grievor to his status in the full-time unit with full compensation.
The City sought judicial review of that decision.
Divisional Court Decision on Benefit Entitlements
The Divisional Court granted the application for judicial review and went on to quash the arbitrator’s decision, finding that the employer’s conduct was not discriminatory under the Code.
The court held that the arbitrator’s decision departed from longstanding case law, notably the Ontario Court of Appeal’s 1999 decision in Ontario Nurses’ Association v. Orillia Soldiers Memorial Hospital. In that case, the Court of Appeal considered whether an employer must continue to contribute to benefit programs for an employee who is off work due to a disability, since contributions to benefit programs are a form of compensation. The court held that requiring work in exchange for compensation is a reasonable and bona fide requirement.
The Divisional Court found that, in accordance with Orillia Soldiers, the City’s failure to provide the grievor with the same benefits as those received by full-time employees was not discriminatory. An employer is not required to compensate an employer for time not worked.
The Divisional Court further held that in providing the employee with access to full-time benefits while he was only able to work part-time hours, the employer had provided a gratuitous benefit that “went beyond its legal duty to accommodate the grievor for a long time.” In the Divisional Court’s view, these benefit entitlements were not integral to the grievor’s accommodation, and could therefore be taken away at the employer’s discretion without contravening its duty to accommodate.
The court quashed the arbitrator’s decision without remitting the matter back to arbitration, effectively dismissing the grievance in its entirety.
The Takeaway on Benefit Entitlements
Although this case occurred in the context of a unionized workplace, the decision is equally relevant to employers whose employees are not unionized.
This case affirms the relationship between work and compensation: requiring work in exchange for compensation is a bona fide occupational requirement and entirely reasonable. Accordingly, compensating full-time employees with greater benefit entitlements than part-time employees based on their working hours is not discrimination under the Code.
However, we caution employers who choose to continue to provide full-time benefits to an employee working reduced hours as an accommodation to clearly specify how long the gratuitous supplement of benefits will continue. For example, an employer may wish to extend the arrangement only to the point where medical documentation indicates that the employee’s need for reduced hours is permanent, or that there is no reasonable expectation of a return to full-time hours.
Minken Employment Lawyers is your source for expert advice and advocacy on today’s employment law issues. If you have any questions on benefit entitlements, or accommodation and compensation during this time, please contact us or call us at 905-477-7011. Sign up for our newsletter to receive up-to-date Employment Law information, including new legislation and Court decisions impacting your workplace.
Please note that this article is for informational purposes only and does not constitute legal advice.
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