Ask the Expert: Do Employees Accrue Vacation Benefits when They’re on Maternity/Parental Leave

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QUESTION

Do we have to count the time employees spend on unpaid maternity and parental leave as service for purposes of accruing vacation and other benefits based on the length of their employment?

–Name withheld

ANSWER

Calculation of maternity and parental leave time depends on 3 things:

  1. What Your Province’s Employment Standards Laws Require

All jurisdictions require employers to reinstate returning employees to their former or a comparable position with no loss of wages or benefits. But rules differ on whether time spent on maternity and parental leave counts toward accruing wages, benefits and/or seniority. The basic question: Do employees get the benefits they received before going on leave or the increases they would have earned had they not gone on leave to begin with?

  • In Alberta, New Brunswick, Newfoundland and Nova Scotia, returning employees are entitled only to their pre-leave wages and benefits;
  • In Manitoba, Saskatchewan, the territories and under federal law, employees get the wages and benefit increases they’d have received if they hadn’t gone on leave; and
  • In BC, Ontario and Québec, returning employees get wage increases but not other employment standards benefits they might have accrued if they hadn’t taken leave.

(See “Know The Laws Of Your Province” for a complete rundown of each jurisdiction’s accrual rules.)

  1. What the Employment Contract Says 

Remember that employment standards are minimum requirements and that employers may provide for more generous benefits.  So you need to check the maternity and parental leave provisions in the employee’s employment contract or collective agreement (as well as the plan documents of any benefit plans in which the employee participates).

  1. The Discrimination Risk Factors

Just because you’re not obligated under employment standards laws or contracts to count leave toward benefits accrual doesn’t mean you shouldn’t do so. Keep in mind that by excluding maternity and/or parental leave from service time you run the risk of being sued for gender and family status discrimination.

Excluding Parental Leave Is Family Discrimination

A BC employer learned this lesson the hard way. The trouble began when an employee took parental leave and the employer didn’t count the time as hours of service. As a result, the employee didn’t have the 1,000 hours required for 4weeks’ paid vacation. The employee claimed family status discrimination and the BC Human Rights Tribunal agreed.

Explanation:  Not counting parental leave toward vacation service wasn’t the problem; the reason the policy was discriminatory is that the policy was inconsistent with the company’s policies for other leaves. Thus, counting time for sick, bereavement and jury duty but not for parental leave was evidence of family status discrimination, according to the Tribunal.

Beaton v. Tolko Industries

Excluding Maternity Leave Is Not Gender Discrimination

Of course, the discrimination argument doesn’t always work. Consider the case of Public Service of Canada’s basing vacation and other benefits accrual on paid time. Since maternity leave time was unpaid, it didn’t count.  Female employees claimed gender discrimination but the federal court said no dice.

Explanation: As in Beaton, consistency was the key to the case. But unlike in Beaton, the policy of excluding leave time applied to all forms of unpaid leave, including military service and personal needs or education leave. The other consistency among the policies is that they all did count leave time toward job security and salary increases. So the court found the policy fair and dismissed the employee’s sex discrimination complaint.

Canada (Human Rights Commission) v. Canada (Human Rights Tribunal)