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Don’t Let The Law Catch You Unaware: The ESA And Leaves Of Absence

By March 14, 2023April 29th, 2024Employment Law

Although leaves of absence are not uncommon among dental practices, many dentists may be unaware of the common legal traps employers could fall into when it comes to this area of employment law. In this ongoing series, we’ll look at some of the most common “leave” situations and how dentists can avoid running into problems.

In this post, we will review the protections for certain leaves of absence in the Employment Standards Act, 2000 (the ESA). Failing to consider or correctly follow the ESA rules for someone away on leave could land dentists in hot water.

Job-Protected Leaves of Absence: A Recap

Before diving into scenarios, we should clarify what we mean when discussing ‘leaves’. A leave of absence is a temporary pause of work initiated by an employee. There are paid and unpaid leaves and leaves that protect an employee’s job and those that do not. We will be focusing on job-protected leaves, as those are the ones that are governed under the ESA. Job protection means that the employee on leave is entitled to return to their job and cannot be punished or dismissed for taking or planning to take one of these leaves of absence. The most known leave provided by the ESA is likely the parental leave allowed after the birth or adoption of a child. However, the ESA also provides eligible employees with unpaid, job-protected leave for situations such as:

Part XIV of the ESA lists the complete set of various job-protected leaves, and you can catch up on the changes COVID-19 brought in our previous post here. Each leave has different criteria regarding who qualifies, how much notice is required before the leave, the lengths allowable, and the documentation required. So, you should assess each situation as its own. However, there are some commonalities that dentist employers should know, which we will explore now.

Reinstatement Rule

When it comes to ESA’s rules relating to leaves of absence, dentists should be aware of the overarching reinstatement rule. The reinstatement rule basically says that

when someone on leave comes back to work, employers shall restore them to their original position as they left it, or, if the position is no longer available, they must be placed in a comparable position.

The takeaway is that, in the vast majority of cases, things must be ‘business as usual’ for the employee once they return.

To illustrate where the reinstatement rule might come into play, let’s look at a case involving the office manager of a dental practice. In Partridge v Botony Dental Corporation (Partridge), a dental office manager, who was about to return from maternity leave, was told that her hours were being reduced and that she’d be switched back to a former hygiene role. After some back and forth in which she resisted and asked for different hours to facilitate her child’s care, she was let go. Noting that the owner dentist admitted that the managerial role was still available, the Court in Partridge said that the ESA mandated that the plaintiff was to have returned to the managerial position. And while there were other factors that the employer in Partridge unsuccessfully tried to argue, this case illustrates the wrong way to handle reintegrating a returning employee.

You may be thinking, ‘that’s fine, but do I have to go out of my way to reinstate in ALL cases? What if I find someone better?…What if the working relationship wasn’t working out, and I was going to end it anyways?’ On the one hand, there is Ontario case law which gives employers some leeway in making good-faith business decisions that might end up impacting employees on leave:

However, other cases have said that employers cannot simply use leaves of absence as excuses to fire people they no longer want to work with. In particular, tribunals in Ontario have held that the leave of absence provisions in the ESA are to be given a “large and liberal” interpretation in favour of employees, as employees are the ones meant to be protected by the remedial statute. Even in a case where an employer was in a challenging financial situation, the Ontario Labour Relations Board found that firing an employee during their leave was a clear breach of the ESA.

Continuous Employment

Aside from the reinstatement rule, there are other statutory protections that benefit employees on leave that may catch unwary dentists by surprise. For example, one area that is often misunderstood is that leaves of absence are treated as “active employment” for the purposes of calculating the length of employment, vacation and benefit entitlements and termination notice. Let’s look at a few examples.

Continuation Of Benefits

If a team member is enrolled in a benefits plan (such as pension plans, life insurance, dental, extended health, accidental death, etc.), they would be entitled to continue participating in that plan during their leave. This means that, as the employer, you must maintain the same level of contributions to benefits plans that you made before the start of the employee’s leave to keep coverage in place for them while they are away. So, for example, if you have been making contributions of 6% per year into your employees’ benefits plan, you would need to continue doing so during parental leave or else risk them losing coverage under that plan altogether.

In some cases, an employee may need to take a break from their benefits coverage for medical reasons (for example, if they are on intermittent leaves or changes in their health status). In these situations, you should ensure that your team member has access to all necessary information about maintaining their benefits coverage while on leave and how to resume coverage when they return. Additionally, be sure to check with your insurer(s) or plan administrator(s) before making any changes to employee benefits during the leave period so that all your requirements are met.

Deferring Vacation

Moreover, suppose a team member had accrued unused vacation days before their leave which would otherwise conflict or overlap with their leave. In that case, they may (depending on whether there is a written contract) defer those vacation days until the leave expires. For instance, if your hygienist’s vacation time and sick days run concurrently, they can use their sick day(s) during the first few days of their absence and then defer their remaining vacation time until after they return.

This is known as “accrued vacation deferrals,” and employees can choose to do this in increments or all at once. The objective is to ensure that an employee does not have to choose between losing some or all of their vacation days or vacation pay and taking less than their full leave entitlement. This option is possible even if the employee’s contract maintains that the employee is not allowed to defer taking vacation time or restricts their ability to do so.

Additionally, an employer cannot require a team member to use up all their accrued vacation time before going on a leave, but they can ask them to use it by the end of the year. Again, you should communicate this clearly to employees so that there is no misunderstanding about what is expected from them, preferably in your employment contracts.

Length of Employment Calculation

As an employer, you should also be aware that you need to factor leaves of absence need into the calculation of an employee’s length of service, which adds to their seniority and may enhance their entitlement on termination to notice or pay in lieu of noticedepending on whether they’re on a legally enforceable, written contract. This calculation comes into play significantly when considering terminating someone. The length of employment calculation is used to determine the notice, or pay in lieu of notice, that you are required to provide.

Each of these situations affects the amount owed to your employee, thus affecting your overall annual expenses. That is why you must keep track of all employees’ absences – even short ones. Whether it’s failing to properly account for someone’s accrued vacation time or neglecting the continuation of benefits and seniority during someone’s leave, Ontario employers have numerous potential traps to keep track of. If you’re not careful, leaves of absence can morph from business inconveniences into costly legal problems.

Bottom Line

Always remember, Ontario’s statutory provisions are remedial in nature and skew heavily in favour of employees, making dealing with job-protected leaves tricky. When dentists fail to consider their obligations under the ESA, they could open themselves up to an employee’s claim of wrongful dismissal and monetary penalties. And, as we will see in our next installment of this series, this risk is compounded where employment standards legislation intersects with human rights laws.

If you are unsure of your rights/responsibilities as an employer, please get in touch with us first. We are happy to help and offer more information on these and any other employment issues. DMC is dedicated to helping dentists understand and minimize the risks associated with being an employer. Send us an email or give us a call at 416-443-9280 extension 205.

The Content of this post is provided for informational purposes only. It is not intended to be legal, financial, tax, or other professional advice of any kind. You are advised to contact DMC (or other counsel) to seek specific legal advice concerning your individual situation.