Unvaccinated employees placed on unpaid leave – who pays the price?

Julie Morris

COVID-19 has caused many employers to be “caught between a rock and a hard place” – particularly when it comes to managing employee vaccination and attendance at work.

Arbitrator Augustus Richardson used this expression in United Steel, Paper and Forestry, Rubber, Manufacturing, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, Local 5319 v Securitas Transport Aviation Security Ltd (“United Steel”)¹, a recent arbitration decision from Nova Scotia. In United Steel the union grieved a mandatory vaccine policy imposed by the federal government and enforced by the employer.

This article focuses on unionized employees who have been placed on unpaid leave for refusing to get vaccinated against COVID-19. While arbitral decisions do not generally provide binding precedent, arbitrators’ views are nonetheless valuable – especially when navigating an ongoing pandemic.

A closer look at United Steel

In United Steel the employer operated an airport security business (“Employer”) and was contracted by Canadian Air Transport Security Authority (“CATSA”) – a federal body created by the Canadian Air Transport Security Act² – to provide security screening services. On October 29, 2021, the federal government enacted an interim order³ that required all airport screening authorities to be fully vaccinated (“Interim Order 43”). Interim Order 43 had been repealed by the time of the hearing, and has now been superseded by Interim Order 59⁴. Interim Order 59 still requires screening authorities, and their employees, to be fully vaccinated to enter restricted areas of airports⁵, so Arbitrator Richardson’s decision remains relevant.

Several of the security screening employees in United Steel (“Employees”) were unvaccinated and refused to comply with Interim Order 43. The Employer subsequently placed the Employees on unpaid administrative leave. The union grieved the Employer’s decision, arguing that it contravened the Collective Agreement. The Collective Agreement guaranteed Employees 40 hours of work per week, and it did not provide for any situations or exceptions that permitted the Employer to avoid this obligation.

The union further argued that management rights, as defined in the Collective Agreement, did not include the Employer’s ability to place the Employees on unpaid administrative leave. The Employer did not have its own vaccination policy even though federal law required them to have one that was the same, or better than, the government’s. The union said it was unreasonable that the Employer did not ask the government if it could implement a frequent testing regime as an alternative to mandatory vaccination. As a result, the union sought an order requiring the Employer to compensate the Employees by providing them with back pay to the day they were placed on leave.

The Employer’s argument was simple: it had no choice but to comply with the legal obligation imposed by the federal order, so the grievance had to be dismissed. The Employer said the arbitrator was required to interpret and apply both the provisions of Interim Order 43 and the terms of the Collective Agreement.

The arbitrator agreed with the union that there was nothing in the Collective Agreement that authorized the Employer to place the Employees on unpaid administrative leave for failure to vaccinate. He also accepted that, in some circumstances, frequent testing could be a reasonable alternative to a mandatory vaccination policy. However, the arbitrator found three problems with the union’s grievance in this matter:

1. The mandatory vaccination policy was not the Employer’s policy. Regulations with the force of law required vaccination, and failure to comply meant the Employer itself could not conduct business in any airports. It was also the Government of Canada (and not the Employer) who was refusing to implement frequent testing as an alternative to vaccination;
2. Under the Collective Agreement the Employer is not required to pay employees who do not show up for work. The Employees had no sufficient reason under the Collective Agreement to not show up for work and therefore were not entitled to be paid; and
3. The arbitrator agreed that he was bound to consider both the Collective Agreement and any employment-related statutes or regulations in making his decision. He found that both the Employer and the Employees had to comply with the government’s mandatory vaccination order.

As a result, the arbitrator dismissed the grievance. He made a point to clarify that none of the Employees were terminated from their employment – the sole issue he was considering was whether they should remain unpaid. The takeaway from United Steel is this: at the end of the (work) day, employers may not have to compensate unvaccinated employees – for lost wages or benefits – who were placed on unpaid leave for failure to comply with federal law requiring vaccination.

This client update is provided for general information only and does not constitute legal advice. If you have any questions about the above, please contact a member of our Labour and Employment group.

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¹ United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, Local 5319, 2022 CanLII 17888 (NS LA).
² Canadian Air Transport Security Authority Act, S.C. 2002, c. 9, s.2.
³ Interim Order Respecting Certain Requirements for Civil Aviation Due to Covid-19, No. 43
⁴ Interim Order Respecting Certain Requirements for Civil Aviation Due to Covid-19, No. 59
⁵ Ibid at 17.31.