A recent Quebec arbitration decision provides important guidance on an issue that occasionally arises in the workplace: when an employer discovers that an employee received a benefit to which they were not entitled, is the employer barred from taking action by the six-month prescription period set out in the Quebec Labour Code? The answer is not always what one might expect.
The Facts in Brief
The underlying case arose from an employer’s synchronization problem between internal systems that prevented certain employee absences from being deducted from vacation and sick leave banks. As a result, leave balances were artificially inflated for several years. Once the issue was discovered in 2024, the employer adjusted the affected leave banks.
According to the arbitrator, where an employer is merely correcting a leave bank so that it reflects the employee’s actual entitlements under the collective agreement, the employer is not necessarily exercising a remedy that is subject to the six-month prescription period under section 71 of the Quebec Labour Code.1 Rather, it is simply restoring the leave banks to their proper state.
Leave Banks: Limits on an Employer’s Right to Correct Errors
The decision is not only about an employer’s right to correct an administrative error, but also about the way that correction may be carried out. Although an employer may adjust a leave bank so that it accurately reflects the rights conferred by the collective agreement, any correction must remain...
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