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HomeMy WebLinkAboutUnion/Renaud 16-02-23IN THE MATTER OF AN ARBITRATION Pursuant to the Ontario Labour Relations Act Between: BROCKVILLE MENTAL HEALTH CENTRE (MEMBER of the ROYAL OTTAWA HEALTH CARE GROUP) (the Employer/Hospital) - and - ONTARIO PUBLIC SERVICE EMPLOYEES UNION on behalf of its LOCAL 439 (the Union) Re: OPSEU Grievance # 2014-0439-76; Union Grievance OPSEU Grievance # 2014-0439-79; Maurice Renaud AWARD Paula Knopf — Arbitrator APPEARANCES FOR THE EMPLOYER: George Rontiris, Counsel Emma McEachran FOR THE UNION: Tim Hannigan, Counsel Kevin Hudson Cindy Ladouceur Maurice Renaud The hearing of this matter was held in Brockville on February 4, 2016. This Award deals with the Union's claim that the Collective Agreement obligates this Employer to maintain certain benefits for bargaining unit members who are 65 and over and remain actively employed. This Award deals with both a personal grievance and a Union policy grievance. There is no allegation of discrimination. The issue is whether the parties' Collective Agreement provides the benefits being claimed for active employees who continue to work beyond their 65th birthday. The facts are not in dispute. The Employer/Hospital is one of Canada's foremost mental health care and academic health science centres. The Hospital combines the delivery of specialized mental health care, advocacy, research and education to transform the lives of people with complex and treatment resistant mental illness. The Hospital consists of: • The Royal Ottawa Mental Health Centre — 190 bed state-of-the-art mental health facility and one 96 bed facility (32 recovery beds and 64 long term care beds) located in Ottawa; and • The Brockville Mental Health Centre — a specialized 161 bed mental health facility located in Brockville with 183 beds in the community (Homes for Special Care). The Grievor was an electrician, hired at the Brockville facility in 1998. As he was approaching his 65th birthday he received the Employer's standard form letter advising him that "in accordance with the Manulife Financial group benefits contract" he would not be eligible to maintain the following benefits after he was 65: • Accidental Death and Dismemberment; • Optional Life Insurance; and • Long Term Disability. In addition, the Grievor was told that his entitlement to Group Life Insurance would be reduced to a maximum of $300 per year of service to a maximum of 15 years of service. The Grievor was also provided with the option to convert the Group Life Insurance and Optional Life to an individual policy. The Grievor and the Union filed grievances on December 1, 2014 seeking the reinstatement of the Grievor's full benefits and a reversal of the Employer's actions. The Employer's response was to say: ".... the practice of ceasing coverage for employees for LTD, Life Insurance and AD&D at age 65 is an industry standard practice." The Grievor remained in active employment until his retirement in September 2015. Happily, he did not have the need to access any of the benefits that are being sought in this grievance. Therefore, there is no monetary relief being sought on his behalf. However, his situation was the catalyst for this hearing and the parties have chosen to process these grievances to obtain direction on their respective rights. The relevant provisions of the Collective Agreement provide as follows: Article 21 - Short-term Sick Leave, Long-term Disability 21.02 - The Hospital will maintain the current long-term disability plan although the Hospital reserves the right to change insurers provided the coverage available to employees is in the aggregate no less favorable. 21.03 - Sick Leave The short-term disability plan period will continue for a seventeen (17) week period which includes the twenty-eight days of sick leave, provided the disability continues. Refer to "Schedule B" and "Schedule C" for Health & Welfare Benefits Summary. Article 30 - Health and Welfare Benefits 30.02 Employees hired prior to October 16, 2000, shall be entitled to Health and Welfare Benefits in accordance with Schedule "C"'. [See attached Appendix A to this Award] ' The parties understand that there is a "typo" respecting the reference to their Schedules in the Collective Agreement. The reference to Schedule C in this award is reproduced for purposes of accuracy in terms of the quotation. However, the appropriate Schedule ("B") applying to the Grievor and this case is what has been attached as Appendix A to this Award. 3 The relevant excerpts from the Employee Benefits Booklet and Benefits Plan Contract are as follows: LIFE INSURANCE You are eligible for Group Benefits if you:... . • are a full-time employee and work at least the required number of hours, • are younger than the Termination Age" The Termination Age .... may vary from benefit to benefit TERMINATION OF INSURANCE Your Group Insurance will terminate on the earliest of: ... • the date you reach the Termination Age GROUP BENEFITS EMPLOYEE LIFE .... For non -retired employees age 65 and over and retired employees On the premium due date coincident with or immediately following the date you reach age 65 or retire, whichever is earlier, your Life amount will reduce to $4,500 if you have 15 years of service or more.... Termination Age - none ACCIDENTAL DEATH & DISMEMBERMENT Benefit amount - same as Life Termination Age - the last day of the month immediately following the date you attain age 65 or retire, whichever is earlier LONG TERM DISABILITY Benefit Amount - 70% of your monthly earnings as of the date your disability commenced, up to a maximum of $9,000 per month Maximum Benefit Period - to age 65 Termination Age - age 65 less the Qualifying period, or retirement, whichever is earlier. The relevant excerpts from the Group Benefits Policy for Life Insurance and Accidental Death and Dismemberment are as follows: LIFE Non -retired employees age 65 and over and retired employees: M On the premium due date coincident with or immediately following the date the employee reaches age 65 or retires, whichever is earlier, the employee's LIFE amount will reduce to $4,500 for employees with 15 years of service or more. For employees with less than 15 years of service, coverage will reduce to $300 per year of service. BASIC ACCIDENTAL DEATH & DISMEMBERMENT and DEPENDENT LIFE ELIGIBILITY Employee Coverage A non -retired employee will be eligible for the coverage specified in the BENEFIT PLAN SUMMARY provided the employee meets the following requirements: (A) Is actively employed.... (C) Is under the age of 65 for ..... BASIC ACCIDENTAL DEATH & DISMEMBERMENT and DEPENDENT LIFE benefits. (N) — "For BASIC ACCIDENTAL DEATH & DISMEMBERMENT, coverage will cease on the last day of the month immediately following the date of retirement or the date the employee attains age 65, whichever is earliest .... BASIC ACCIDENTAL DEATH AND DISMENBERMENT: Amount — same as LIFE benefit amount WEEKLY INDEMNITY Amount - [a percentage of weekly earnings based on length of service] HOSPITAL .... MAJOR MEDICAL .... LONG TERM DISABILITY ELIGIBILITY An employee will be eligible for the coverage specified in the BENEFIT PLAN SUMMARY provided the employee meets the following requirements: (A) Is actively employed.... (C) Is under .... age 65 less the qualifying period 5 The Submissions of the Parties The Submissions of the Union The Union asserts that all active employees should have access to the same benefits unless there are clear words in the Collective Agreement that distinguish entitlement to benefits on the basis of age. It was submitted that this makes "labour relations sense" because all employees who provide the same work should be entitled to the same level of compensation. Therefore, it was argued that there should be "an assumption of equity as opposed to an assumption of legal differentiation." The Union made it clear that this is not a claim of discrimination on the basis of the Human Rights Code, acknowledging that Ontario Regulation 286/01 under the Employment Standards Act allows differentiation in pension and benefit plans based on age 65. Accordingly, the Union argued that even though benefit plans may "legally discriminate" on the basis of age, parties to a collective agreement must use "clear and unambiguous" language to treat employees over 65 differently in terms of compensation. The Union stressed that the language of Article 30 creates a mandatory entitlement to all benefits set out in the Benefits Schedule, without exempting active employees who are 65 or over. Further, the Union pointed out that where the parties wanted to distinguish between employees over the age of 65, they did so in Schedule C for Life and said the "same" for Accidental Death and Dismemberment benefits, whereas there is no such distinction for the other benefits. Therefore, the Union argued that the Benefit Booklet and the Employer's insurance contracts with Manulife are "irrelevant" and cannot be applied to reduce or eliminate the benefits set out in the Collective Agreement. In support of this position, the Union relied upon Strathroy-Caradoc (Municipality) Police Services Board and Strathroy-Caradoc Police Association (2012) 216 L.A.C. (4th) 199, 2012 CarswellOnt 7635, 111 C.L.A.S. 12 (M.E. Cummings); London (City) and London Civic Employees' Local R 107 [2010] CarswellOnt 6719, [2010] O.L.A.A. No. 347,109 C.L.A.S. 219 (Etherington). The Submissions of the Employer The Employer began by suggesting that the Union's argument is simply one of "fairness", but it was emphasized that it is not a violation of the Human Rights Code to deny benefits to employees who continue to work beyond their 65th birthday as recognized by Arbitrator Goodfellow in his award in Scarborough Hospital and COPE, Local 1487 (Employee Health and Welfare Benefits), 2014 CarswellOnt 15712, at para. 1. Reference was also made to the Ontario Human Rights Code, s. 25(2.1); Employment Standards Act, s. 44(1); the Employment Standards Act, Regulation 286/1; O.N.A. v. Chatham -Kent (Municipality), 2010 CarswellOnt 8919 (ON LA) (Etherington), at paras 82-87; London Civic Employees, Local 107 v. London (City), 2010 CarswellOnt 6719 (ON LA) (Etherington). Turning to this issue of this Collective Agreement, the Employer stressed that the fundamental rule of contractual interpretation is that words used must be given their "plain and ordinary meaning" unless it is clear from their context that another meaning is intended, or the plain and ordinary meaning would lead to an unlawful or absurd result. It was also emphasized that all the words of the contract should be given meaning, that different words are presumed to have different meanings, and that specific provisions should prevail over general provisions. In support of this, reliance was placed on Canroof Corp. and TC, Local 230 (Group Grievance), Re, 2013 CarswellOnt 7300 (ON CA) (Surdykowski), at para. 4. The Employer argued that while employees are entitled to the Health and Welfare Benefits set out in the Schedules to their Collective Agreement, those Schedules were said to be simply a "summary" of the benefits under the insurance policies that are then incorporated by reference into the Collective rA Agreement. It was said that it is impossible to apply or interpret the contractual benefit provisions in the Schedule without the terms of the insurance policies referenced, including their eligibility criteria. Examples were given, such as how one would define eligibility, disability, determine benefit coverage for various injuries or know when disability benefits ceased without incorporating the terms of the policies into the Collective Agreement. Therefore, it was said that the Collective Agreement is "ambiguous", requiring that the parties and this Arbitrator look to the insurance Booklet and policies to determine eligibility, coverage and all the other details pertaining to a claim or entitlement. Further, the Employer relied upon Article 21.02 where it makes specific reference to a long-term disability plan and gives the Employer the right to change insurers. This was said to be a specific incorporation by reference into the Collective Agreement of the existing LTD plan, including its eligibility requirements. The Employer argued that it has fulfilled its promise to provide insurance benefits to the bargaining unit and that any eligibility issues are left to the sole determination of the insurers, as was endorsed in Ontario Nurses' Association v. Sault Area Hospital, 2012 CarswellOnt 5841 (Steinberg), at paras 22, 36 and 37. It was stressed that all the insurance policies relevant to this Award provide that employees' eligibility for benefits change at age 65. The Employer suggested there must be clear and unambiguous language to counter that result. Further, since all the employees have been provided with ample information about the details of the policies and been given copies of the insurance Booklets outlining eligibility and benefits, the Employer argued that the details of the plans were well known to the Union and so it should be concluded that the parties intended to differentiate the provision of benefits on the basis of age. However, it was made clear that estoppel is not being asserted. The Union's Reply Submissions The Union argued that if the insurance policies or Booklets can be used to dictate the impact of age on the bargaining unit's benefit entitlements, there would have been no need for the parties to have entered into the Schedules of Benefits appended to their Collective Agreement. Therefore, it was submitted that an active employee's age is only relevant where there is clear language to that effect in the Collective Agreement. Further, although there is a reference to the LTD plan in Article 21.02, the Union argued that the plan, with its eligibility criteria, has not been incorporated into the Collective Agreement because the plan itself can be changed by the Employer. The Decision This is not a case where there is a claim of discrimination under the Human Rights Code. This is a pure contract interpretation case. It is also important to set out what is not in issue. The Union does not dispute that the Schedule to the Collective Agreement allows for the reduction of Life Insurance coverage for active employees at age 65. That is clear from the Schedule, where the parties have negotiated that the benefit will be reduced for active employees who are 65 or over or who have retired. This case is similar, but not identical, to the situation before Arbitrator M.E. Cummings in the case of Strathroy-Caradoc (Municipality) Police Services Board and Strathroy-Caradoc Police Association, supra. In that case the union was also claiming benefits for an employee who worked past his/her 65th birthday on the basis of the collective agreement. Arbitrator Cummings also relied on the City of London case, supra, and wrote as follows: 16. 1 adopt the analysis of Arbitrator Etherington set out in the City of London case, (above). The amendments to the Human Rights Code ended the requirement that employees retire at age 65. The amendments permitted employers to maintain benefit plans that provided Q different (or no) benefits to employees who continued to work past 65 years old. In the collective bargaining context, arbitrators have to figure out whether the union and the employer have negotiated a benefit plan that differentiates between employees who are older than 65 years. 17. The significant principle that I adopt from the City of London award is that I should not readily find an intention to discriminate on the basis of age. I should look for "clear and unambiguous language" to find an intention to provide lesser benefits to employees who work after age 65. The reasons behind that principle are obvious. Employees who work after age 65 provide the same labour as they did when they were 64 years of age and should be compensated in the same way. A pay and benefit differential that is only explained by the age of the employee is prima facie age discrimination. 18. However, the Human Rights Code does permit employers to maintain benefit plans that are discriminatory. As the Association noted, the Legislature recognized that many employers had negotiated plans whose coverage terminated at age 65. Moreover, some benefits might become more expensive to provide if the employee group included an older work force that was actuarially proven to be more costly to cover. Whatever, the reason, the Human Rights Code has removed the barrier to employees wanting to work past the age of 65 years, while permitting the denial of employee benefits to those who work past age 65. 19. 1 am left with the interpretive exercise. Have the parties to the collective agreement before me negotiated a legally permitted discriminatory benefit plan? As set out above, I adopt the view of Arbitrator Etherington that only clear and unambiguous language should lead me to conclude that differential benefits have been negotiated. 21. ..... I note that the employer has retained the right to change insurance carriers "...as the municipality determines and such change will not reduce a member's benefit or rights to a benefit." Such clauses are not unusual but undermine the employer's argument that the collective agreement, with its reference to the particular insurance policy, demonstrates that the terms of the policy itself are part of the parties' bargain. If one party can unilaterally change the insurance policy, it is less compelling to see the policy as part of the bargain. I conclude that the insurance policy is not part of the parties' bargain. [emphasis added] This case makes it clear that it takes clear and unambiguous language to uphold differential treatment of active employees, even with regard to benefit plans. 10 On the other hand, the case law also deals with the question of eligibility and the details of insurance that are not found within the body of a collective agreement. This was the situation in the case of Sault Area Hospital, supra, where Arbitrator Steinberg concluded: [36] An examination of the language of the collective agreement does not indicate that the parties, except at a very basic level, turned their minds to the question of eligibility for benefits. Article 17 simply states that full time nurses (which is a defined term in the collective agreement) who are participating eligible nurses (not defined in the collective agreement) and in the active employ of the Employer (not defined in the collective agreement) are entitled to the benefits under the insurance plans "subject to their respective terms and conditions including any enrolment requirements". [37] The only defined term in the agreement that is relevant to decisions of eligibility is that of a full time nurse. That is not particularly surprising. Insurance is a complicated matter and it would be impossible for the parties to spell out in a labour relations document, such as a collective agreement, all of the rules that govern eligibility for and entitlement to insured benefits. These parties have decided that the provision of benefits pursuant to the insurance policies is "subject to their respective terms and conditions including any enrolment requirements". 1 cannot imagine a more definitive statement of the parties' intent that the large reservoir of eligibility rules to be found in the policies would be determinative and would, of necessity, be determined by the insurer. [emphasis added] The language in the Sault Area Hospital case is different from the language in the case at hand in that there is no similar reference to the benefits being "subject to" the terms of the insurance policies' provisions. That is a significant difference. However, the other principle from that case that is relevant here is that one does not expect "all the rules that govern eligibility for and entitlements to insurance benefits" to be contained in the body of a collective agreement. Therefore, the question in this case remains: What does this Collective Agreement provide in terms of benefits for active employees who are 65 or older? The answers are found in the language of the Collective Agreement itself. 11 Beginning with Long Term Disability Insurance, Article 21.01 provides that the Employer will maintain "the current long-term disability plan", although it also provides that the insurer can be changed provided the aggregate coverage is not diminished. This provision makes specific reference to a LTD plan and by doing so signals an acceptance of that plan by the Union. By accepting that plan, whether it has been incorporated by reference into the Collective Agreement or not, the parties have accepted its eligibility requirements, its coverage and its details. The Employer can change the carrier, but it cannot reduce the aggregate coverage. Nothing in the Collective Agreement suggests that there is anything about that plan that does not apply to the bargaining unit or that the members have any right to benefits beyond what the plan offers. For a claim to succeed for a monetary benefit, there must be a foundation to be found in the words of the Collective Agreement. No such basis for an entitlement can be found in this contract where the "current long-term disability plan" is specifically referenced in the Collective Agreement and nothing in the Schedule of benefits suggests any benefits or entitlements beyond what the plan itself provides. It is also clear from the terms of the plan and the Benefits summary that active employees who achieve the age of 65 or over are not eligible for LTD coverage. Accordingly, this aspect of the grievance must fail. The next benefit that must be addressed is Accidental Death and Dismemberment (AD&D). Article 30.02 does promise, "Employees hired prior to October 16, 2000, shall be entitled to Health and Welfare Benefits in accordance with Schedule C". Reference to the Schedule shows that where the parties clearly intended to differentiate benefit entitlement on the basis of age, they did so for Life Insurance, providing a reduced death benefit for active employees and retirees who are 65 and over. The Schedule then indicates that the AD&D benefit is to be "the same as life insurance". These words must be given effect. The only way to interpret this that makes any sense of all the words is to accept that the AD&D benefit is also available in the same way as Life Insurance, allowing for a 12 benefit for all active employees, but a reduced death benefit payable for those 65 or over or retired. Any other interpretation would read out the words "same as life insurance" from the Schedule. Therefore, the AD&D benefit must remain available to active employees who are 65 and over. Optional Life must now be addressed. Unlike the LTD policy, there is no specific reference to the Optional Life Policy in the Collective Agreement. Nor is there any indication of a differential treatment for active employees on the basis of age in the Schedule. Therefore, the Employer's obligations to provide coverage cannot be limited or dictated by the terms of the insurers. As quoted above, it takes "clear and unambiguous language" to find an intention to provide lesser benefits to employees who work at the age of 65 or over. Since nothing in the parties' Collective Agreement or the Schedule of Benefits creates a differential based on age for the Optional Life, that benefit is available for all active employees. CONCLUSION As pointed out in Sault Area Hospital, supra, insurance is a "complicated matter". Employers and unions do not, and need not, set out all of the rules that govern insured benefits in their collective agreements. However, their choice of language must be respected and enforced to determine who is entitled to what benefits. Therefore, one does not expect to see all the elements of insurance coverage in collective agreements. However, where a general provision such as Article 30.02 promises that employees are entitled to the benefits set out in their schedule, that schedule will dictate the essential details of those entitlements, unless there is something else in the Collective Agreement that specifically signals a different result. In the case at hand, the existing LTD policy has been referenced in the Collective Agreement, resulting in the inclusion of its provision limiting coverage to active employees under the age of 65. That limitation disentitles active employees who are 65 and over to LTD coverage. On the other 13 hand, the Life, AD&D and Optional Life plans have not been referred to in the Collective Agreement. The bargaining unit's basic entitlement to those benefits is set out in the Schedule, reducing Life benefits at age 65. AD&D is treated the same way and therefore remains available for active employees who are 65 and over. There is no age distinction set out for Optional Life coverage. Therefore, that benefit remains available for active employees, regardless of their age. As a result, the grievances succeed, in part. The Employer is obligated to provide the benefits that are consistent with the terms of this Award. 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