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Pregnancy and STD Benefits

November 24, 2004
by Israel Foulon LLP

Question: We provide short-term disability benefits to our employees, which are self-insured. Our existing short-disability plan does not cover pregnant women who are medically unable to attend work for a period of time due to the pregnancy. Is this contrary to human rights legislation?

Answer: The treatment of the medical component of pregnancy leave under benefit plans has been legally controversial for almost two decades. Employers and disability insurers in Canada have been reluctant to cover the normal medical consequences of giving birth under income continuation plans.

The justification for excluding pregnancy from disability leave policies has been that these types of policies were intended to cover unintended illnesses and accidents, while pregnancy and giving birth was typically a deliberate and voluntary decision of the mother.

In 1989 the Supreme Court of Canada firmly rejected these arguments and ruled that excluding pregnant women from disability coverage was a form of sex discrimination.

Following this decision there were repeated human rights challenges in the 1990s to collective bargaining agreements that distinguished between health-related absences and the medical aspects of absence due to pregnancy.

Subsequently the Ontario Divisional Court and the Ontario Court of Appeal repeatedly ruled that, in principal, pregnant women should not be afforded less generous sick-leave benefits than other employees on a medical leave of absence.

But, while the courts had clearly ruled short-term disability plans which did not cover the medical component of pregnancy leave constituted discrimination under human rights, there were still many regulations or statutory provisions which expressly permitted the exclusion of pregnancy from certain employment benefit plans.

For example, the now-repealed Ontario Employment Standards Act, R.S.O. 1990, c. E.14 prohibited most forms of discrimination in matters of disability, sickness or accident benefits. However, s. 8(c) of Regulation 321 under this act expressly stated that this general prohibition against discrimination did not prohibit an employer from excluding pregnant women from benefits under a short- or long-term disability insurance plan.

These types of legislation and regulations were constitutionally suspect given the Supreme Court of Canada ruling which held that the exclusion of benefits during pregnancy constituted both sex and pregnancy discrimination, and all of the provincial and federal human rights legislation prohibit sex discrimination.

This issue was clearly resolved in Ontario when the Employment Standards Act, 2000, came into effect and Regulation 286 replaced the old Regulation 321. The new regulation removed the pre-existing exemption which allowed employers to exclude pregnant women from benefits under a short- or long-term disability plan.

This regulatory change caused the insurance industry to revisit the treatment of pregnancy leave under short-term disability policies.

Several leading insurance carriers have issued guidelines which suggest that a two to four week post-delivery absence should be recognized as qualifying for sick leave. The same guidelines suggest a complicated delivery or caesarean section may warrant a medical absence of six to eight weeks.

These guidelines may be modified, depending on the physical demands of the job and the individual mother’s personal health circumstances. In short, the insurance industry has signalled it will now recognize the medical component of pregnancy leave as qualifying as a health-related absence under short-term disability policies.

As an employer who provides short-term disability leave by way of self-insurance, it would be advisable to follow a similar course of action. In other words, you should ensure the medical component of maternity leave qualifies for short-term disability benefits.

A woman who gives birth or suffers a miscarriage must be afforded the same sick leave or short-term disability leave given to any other employee who is absent due to medical reasons. However, you should be aware the coverage can be afforded through a combination of federally-funded employment insurance benefits supplemented by either insurance or employer top up.

In other words, while a pregnant employee is entitled to the same income continuation as other employees on a medical leave of absence the source of monies does not have to be identical.

While you are not legally required to provide paid sick leave or short-term disability coverage to employees, if you do so you must ensure any such benefit plans do not treat the medical component of a pregnancy-related absence differently than any other medical absence.

Peter Israel is the senior partner in the Toronto law firm of Israel Foulon LLP – Employment and Labour Lawyers. He can be reached at 416-640-1550 or pi@qtw38575.mywhc.ca. A version of this article originally appeared in the Carswell publication, Canadian Employment Law Today


Legal Disclaimer

This article is for informational purposes only and is not intended to provide legal advice, which in all circumstances must be tailored to the specific facts of any problem. You should obtain a proper legal consultation in order to determine how this article applies to your specific situation. Please feel free to contact Israel Foulon LLP to learn more at 416-640-1550.