The Labour Board issued an order determining that the Employer had committed an unfair labour practice and ordered the Employer to pay a lump-sum amount (“Order Amount”) to each full-time employee in the bargaining unit when the unfair labour practice was committed (“Employee”) pursuant to a provision of the applicable Labour Relations Act (LRA). Before concluding that
the Order Amount was likely provided to compensate each Employee for interference with his or her rights under the LRA, and would constitute non-taxable damages that are excluded from income
CRA stated:
Notwithstanding that a payment made pursuant to XXXXXXXXXX of the LRA is provided in the context of employment, such payments are limited to situations where an employee has not otherwise suffered a loss of income, benefits, etc. as a result of the unfair labour practice. By contrast, payments made pursuant to XXXXXXXXXX of the LRA are specifically intended to compensate for financial losses (i.e., income, benefits, etc.) that arise as a result of an unfair labour practice.