Issues over Personal Emergency Leave and Personal Emergency Pay Resolved by Labour Board

July 9, 2018

As many readers are already aware, the new Personal Emergency Leave provisions in s. 50 of the Employment Standards Act, as well as the provisions in the Regulations that provide an exemption to construction employers allowing them to pay .8% of an employee’s hourly rate or wages (“Personal Emergency Pay”) in lieu of providing paid Personal Emergency Leave (O. Reg 285/01, s. 3.0.1), both of which were ushered in through the Fair Workplaces, Better Jobs Act (better known as Bill 148), have been a source of confusion and controversy since they became effective on January 1, 2018.  The source of the confusion with respect to both s. 50 and the regulation has been an ongoing ambiguity over the appropriate baseline to employ in making payments to employees.  Should employees be paid their base rate, their full wage package (including vacation, benefits, etc.), or something in the middle?  Should premium and overtime pay be included?  How much discretion should construction employers have in determining whether to offer paid Personal Emergency Leave or Personal Emergency Pay?  If employers pay their employees .8%, how far back do they have to go?

Koskie Minsky, on behalf of its clients the IBEW Electrical Power Council of Ontario and the Ontario Sheet Metal Workers’ Conference, filed grievances against the Electrical Power Systems Construction Association (EPSCA), and together with EPSCA, put the most pressing questions affecting employers, unions and employees with respect to the operation of Personal Emergency Leave and Personal Emergency Pay before the Labour Relations Board for resolution.  On July 6, 2018, Chair Bernard Fishbein issued a decision, available here, addressing seven questions agreed upon by the parties.  The questions, and the Board’s decision on each, are listed below.

1. Is it an unfair labour practice and/or a breach of the EPSCA Collective Agreement (in which EPSCA recognizes the Union as the exclusive bargaining agency for bargaining unit employees for employers bound to the collective agreement) and/or a breach of the EPSCA Agreement’s Wages and Pay Procedure provisions to unilaterally pay bargaining unit members .8 percent Personal Emergency Pay pursuant to section 3.0.1 of O. Reg. 285/01 without the agreement of the trade union?

The Board held that EPSCA’s employers did not violate the wage provisions or recognition provision of the EPSCA Collective Agreement by unilaterally deciding to pay bargaining unit members .8% Personal Emergency Pay without the agreement of the trade union.  Employers would appear to be free to make this decision without the Union’s input.

2. In order to fall within the exemption described in section 3.0.1 of O. Reg. 285/01, is .8 percent Personal Emergency Pay to be calculated on the base rate or the wage package or something else?

The Board held that .8% Personal Emergency Pay is not to be calculated on the full Wage Package (which would include all benefits) or the Base Rate; it is properly calculated on the Base Rate plus vacation & holiday pay plus any applicable premiums, such as overtime or shift premiums.

3. In order to fall within the exemption described in section 3.0.1 of O. Reg. 285/01, must .8 percent Personal Emergency Pay be paid on “hours worked” or “hours earned”?

In light of the Board’s response to Question #2, employers who opt to pay .8% Personal Emergency Pay must calculate the payment on “hours earned,” not “hours worked”; i.e. they must include vacation and holiday pay plus any applicable premiums, such as overtime or shift premiums.

4. In order to fall within the exemption described in section 3.0.1 of O. Reg. 285/01, must .8 percent Personal Emergency Pay be paid on all hours worked in a week (including overtime hours) or on a maximum of 40 hours per week (that is, the regular hours of work in the collective agreement)?

The Board held that .8% Personal Emergency Pay is paid on all hours worked in a week (including overtime hours) and is not limited to the number of hours in a regular work week.

5. In order to fall within the exemption described in section 3.0.1 of O. Reg. 285/01, must .8 percent Personal Emergency Pay be paid retroactively to January 1, 2018?

The Board held that, indeed, in order to fall within the exemption described in section 3.0.1 of O.Reg. 285/01, employers must pay Personal Emergency Pay for the entire calendar year.  Hence, if employers begin to pay Personal Emergency Pay after January 1, they must pay it retroactively to January 1.

6. Where an employee has already received one paid Personal Emergency Leave day from a Contractor, may the employer decline to pay Personal Emergency Pay to that employee so that the employee would remain entitled to one further paid day of leave under section 50 of the Employment Standards Act prior to January 1, 2019?

The Board held that if an employee has already taken one paid Personal Emergency Leave day before an employer decides to pay.8% of wages to its employees, the employer may decline to pay .8% Personal Emergency Pay to that employee, and the employee is instead entitled to a second day of paid Personal Emergency Leave, which is to include the base rate plus vacation and holiday pay for all hours that the employee would have worked had the employee not taken the day off.

7. Regarding the employer’s pay obligation when an employee takes a paid day of leave under section 50 of the Employment Standards Act, should the Employer be paying and remitting a day’s pay based on the Wage Package or some other amount?

The Board held that employees who take Personal Emergency Leave days should be paid their base rate plus vacation and holiday pay for all hours that the employee would have worked had the employee not taken the day off. (Note that this provision applies to all non-construction employees as well as construction employees who do not receive .8% Personal Emergency Pay).

We feel that the Board’s decision answers most of the outstanding questions that have confronted unions, employees and employers in Ontario regarding the implementation of Personal Emergency Leave pay and Personal Emergency Pay and is likely to be the guiding precedent on this issue moving forward.

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