Employee Accommodated as Part-Time Worker Could be Removed from Full-Time Bargaining Unit: Ont. Div. Ct.

A recent decision of the Divisional Court confirms that where an employee is permanently restricted from working full-time hours by disability, the employer does not have an obligation to maintain them under the terms of a full-time collective agreement (with more generous benefits contributions) indefinitely.

In City of Toronto v. Canadian Union of Public Employees, Local 79, an employee grieved when the employer moved him from the full-time to a part-time bargaining unit, claiming that the move was discriminatory. The employee, who was hired in a full-time Caseworker position in 1991, became disabled to the point that he could only work four (4) days a week starting in 1999. Much of his absenteeism was made up with paid sick time or through a new Illness or Injury Plan that the City instituted in 2009. In February 2020, the grievor provided medical documentation requiring that his schedule be reduced to 3 days per week. The City accommodated, and through these two reductions in hours it still maintained the grievor in the full-time bargaining unit, where employee benefits were fully paid by the employer. However, in 2013, the City requested a medical opinion on whether the grievor's restrictions were permanent, and his doctor agreed that they were. When that collective agreement ended in 2016, the City put the union on notice that it would no longer permit employees working part-time hours to continue receiving the benefits of the full-time collective agreement. Employees were given a 2-year grace period, but if they were still unable to work full-time at the end of the 2 years, they would be moved to a part-time bargaining unit (where they would only receive contribution towards benefits coverage on a pro-rata basis). The grievor was moved to a part-time bargaining unit in 2018, and grieved the transfer out of the full-time bargaining unit.

At arbitration, the arbitrator had agreed with the City that it was within its rights to transfer an employee to the part-time bargaining unit based on his hours of work, and that it had made all reasonable efforts to accommodate the grievor to the point of undue hardship. In fact, the arbitrator observed that the City had gone above and beyond. However, the arbitrator found that the employer had discriminated against the employee by transferring him out of the full-time bargaining unit because there had not been any change in circumstances, nor was there any proof of undue hardship that would explain why the change had to occur. The City applied for judicial review of the arbitration decision.

In overturning the arbitrator's decision, the Divisional Court observed that the principles applicable to the case were not contentious, at least since the Court of Appeal's decision in Ontario Nurses’ Association v. Orillia Soldiers Memorial Hospital, in which the Court found that denying compensation (including payment of benefit premiums) to an employee who was unable to work due to disability was not discriminatory since compensation was part of the exchange for an employee's services. If an employee could not work, they had no right to be paid, whether in the form of wages or benefits coverage. In her reasons, the arbitrator had expressed a preference for a line of arbitral reasoning that ran contrary to the law as applied by the Court of Appeal in Orillia Soldiers Memorial Hospital. However, the arbitrator had accepted that the employer had met its duty to accommodate, and even gone beyond that. This prompted the Divisional Court to find that the arbitrator's decision was unreasonable, with the Court observing at para. 23:

At this point of her reasons, one would have thought that the logical conclusion would be that the grievance must fail. Employees in the full-time unit receive greater benefits than those working part-time hours. For example, the City pays 100% of the cost of benefits for full-time employees in the full-time unit, while the City pays a pro-rated percentage for those in the parttime unit. As well, some of the benefits are different in terms of payment for shifts missed because of sickness and injury. In accordance with Orillia Hospital, the employer does not discriminate by failing to provide the added benefits to which a full-time employee is entitled to a person working part-time hours, even if the person is working part-time because of disability. The difference in treatment with respect to compensation and benefits is because of the number of hours worked, not because of disability, and the employer is not required to compensate the disabled employee for time not worked.

Rather than concluding that the employer had discharged its duty to accommodate, and need not maintain the grievor in the full-time bargaining unit (when he clearly could not provide full-time services), the arbitrator went on to formulate a "new test" for whether an employer was meeting its duty to accommodate where it sought to change an existing accommodation:

i) Has there been a change in the employee’s condition?

ii) Has there been a relevant change in the nature of the work or in the employer’s circumstances that affects the reasonableness of the accommodation?

iii) Would continuation of the accommodation create a situation of undue hardship for the employer?

Neither party had argued for such a test, nor was any authority advanced that would support creating a new test for this situation. The Divisional Court wholly rejected this approach, finding that there was no precedent supporting the test, which was inconsistent with Orillia Soldiers Memorial Hospital and the arbitral case law that had followed that decision. Moreover, the test applied by the arbitrator ignored the principles applicable to accommodation to the point of undue hardship. As the Supreme Court of Canada had stated in Hydro-Québec v. SCFP-FTQ (at para. 15 of the SCC decision):

However, the purpose of the duty to accommodate is not to completely alter the essence of the contract of employment, that is, the employee’s duty to perform work in exchange for remuneration. 

Where an employee cannot perform full-time work, they are not entitled to the compensation package applicable to full-time employees.

In the result, the Divisional Court quashed the arbitration award, and determined at para. 34:

... There is no need to refer this matter back to arbitration, as the arbitrator found that the collective agreement allowed the City to transfer the grievor to the part-time unit. Doing so was not discriminatory, given the holding in Orillia Hospital. The arbitrator did not make a finding of estoppel against the employer based on past practice. Therefore, the grievance should be dismissed. 

The message for employers is clear: where an employee has no prospect of returning to his or her former position, and is being accommodated in some other capacity (in another role or on a permanent part-time basis), the employee is only entitled to the compensation and benefits applicable to the accommodated role - not their former role. Of course, an employer has a duty to find out whether there is any reasonable prospect of the employee returning to their original position, but where all indications are that the restrictions are permanent, the accommodated role becomes the home position, complete with all of its terms and conditions. Even if the employer provides some additional benefit (such as treating the employee like a full-time worker), this does not prevent the employer from rectifying the situation at some point in the future (barring considerations of estoppel).

Need guidance on a challenging accommodation issue? Looking for advice on dealing with a human rights grievance? Contact [email protected] for expert assistance.

* * *

Operating as Ceaser Work Counsel since early 2014, Lance Ceaser is a 16+ year management-side labour and employment lawyer operating from London, Ontario, where he resides with his lovely spouse, a dog and 2 cats. Lance has provided timely, cost-effective advice to organizations of all sizes in virtually every sector of industry and the public sector throughout his career.