In the decision of WestJet Encore v ALPA, dated March 31, 2025, Arbitrator Kaplan held that a Canada Labour Code (the “Code”) provision which requires that pension (as well as health and disability) benefits continue to be made available during certain prescribed periods of leave do not similarly extend to other types of retirement and savings plans.
Background
WestJet Encore sponsored a voluntary savings program (the “WSP”), comprised of a matching registered retirement savings plan(“RSP”)/tax free savings account arrangement (“TFSA”), and a matching cash savings arrangement. The rules governing the WSP provided that employees could, while away from work on certain approved leaves, continue to contribute to and receive WestJet Encore matching contributions for the first 12 continuous months of any such leave.
Pursuant to the Code, pension, health and disability benefits are to be made available during various protected leaves. For example, section 209.2(1) of the Code (applicable to pregnancy, parental, compassionate care, critical illness leaves and personal leaves) provides that, subject to continued payment of any required employee contributions:
The pension, health and disability benefits and the seniority of any employee who takes or is required to take a leave of absence from employment under this Division shall accumulate during the entire period of the leave.
As pregnancy and parental leaves might continue for up to 78 weeks in duration under the Code, the Air Line Pilots Association (the “ALPA”), on behalf of WestJet Encore pilots, commenced a policy grievance on the basis that the 12-month matching limit under the WSP was in violation of section 209.2(1) of the Code.
Decision
In a brief decision Arbitrator Kaplan dismissed the ALPA’s grievance, suggesting that the ALPA had provided little in the way of supporting evidence. Rather, it seems that the ALPA’s grievance was largely premised on an argument that the Code is remedial legislation and, as section 209.2(1) of the Code references only pensions (not registered pension plans), that this reference should be interpreted broadly to include RSPs, TFSAs and other kinds of retirement and savings arrangements.
Arbitrator Kaplan rejected this argument, reasoning that Parliament could (and would) have used different or additional words if the intent was to extend the application of section 209.2(1) of the Code. The use of the word “pension” was distinguished from language used within parallel provisions of the Ontario Employment Standards Act, 2000, and Regulation 286/01 thereunder, which clearly reference both pensions as well as other types of retirement arrangements. In the case of the Code, Arbitrator Kaplan concluded that the word “pension” should be given its plain and ordinary meaning, and that this does not include an RSP, TFSA or other savings arrangement.
Arbitrator Kaplan also considered but rejected the ALPA’s secondary submission that the WSP’s 12-month limit on matching contributions violated the Canadian Human Rights Act, noting that the ALPA had failed to call any evidence to support such claim.
Takeaway for Employers
Arbitrator Kaplan’s decision raises some questions as to the thoroughness of the submissions made by the ALPA. Nonetheless, the conclusions reached should provide some comfort to federally regulated employers - that the Code’s requirements for pension benefit accumulations to be offered during certain prescribed leaves do not extend more broadly to RSPs, TFSAs and other types of retirement or savings arrangements. In other words, the Code itself does not impair the ability of employers to determine the circumstances under which contributions to such plans are (or are not) continued during periods of leave. This stands in contrast to how retirement arrangements have been dealt with under the applicable employment/labour standards legislation of certain provinces (for example, in Ontario and Saskatchewan); meaning that employers with provincially regulated workforces do not necessarily have the same flexibility to end all contributions under such plans during an employee’s period of protected leave.
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