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Exclusive Arbitral Jurisdiction Over LTD: Court of Appeal Confirms No Ability To Sue For Disability Where A Collective Agreement Governs Benefits

In workplaces governed by a Collective Agreement, the Agreement reigns supreme.  Any and all terms and conditions of employment are either directly spelled out in the Agreement or arise from the interpretation of that agreement.  Key among these is the grievance dispute mechanism.

Although every collective agreement I have ever seen contains its own article or section regarding how the grievance procedure will work as between the parties, even if it didn’t the Labour Relations Act, 1995 specifically states that dispute resolution through a grievance process that culminates in the right to have a dispute resolved at arbitration is an implied term of every collective agreement.  This is one of the most basic rights of the parties in the unionized workplace and, importantly, ousts the jurisdiction of the courts for any dispute arising “from the interpretation, application, administration or violation of the collective agreement”.  It is long-settled law that any such dispute is within the sole jurisdiction of an arbitrator.

That said, disputes can arise where a party argues that a particular element of the employment relationship is somehow outside or beyond the jurisdiction of the collective agreement and therefore “inarbitrable”.  This is precisely what the employee argued in a case recently heard at the Ontario Court of Appeal.

In Hutton v. Manulife, the plaintiff (a Laboratory Technician and member of the OPSEU bargaining unit at her employer’s workplace) was off work and originally entitled to LTD benefits for being unable to perform the essential duties of her “own occupation”.  However, the terms of the coverage dictated that a review happen after some time to then determine whether she was unable to perform the essential duties of “any occupation” (for which she was qualified/trained or could be in 2 years).  When Manulife determined she was no longer eligible for benefits the plaintiff filed a grievance against her employer, Quinte Healthcare Corporation (“QHC”) which eventually settled.  Prior to settlement of the grievance, though, the plaintiff also initiated a civil claim against Manulife.  Manulife responded by bringing a motion to dismiss the action due to the fact that the claim arose out of and was governed by the collective agreement between QHC and OPSEU.

Manulife took the position that the plaintiff had no right to access the court since the QHC collective agreement clearly set out a dispute resolution process (first through the insurer’s appeal process and then through grievance and arbitration); in fact, this was the process that he plaintiff had followed.

In dismissing the plaintiff’s action, the motion judge relied on the language of the collective agreement stating that the employer was responsible for LTD benefits and that those benefits must be the HOODIP (a centralized program/plan for all member hospitals) or equivalent.  In upholding the motions judge’s decision to dismiss, the Court of Appeal agreed that even if the Manulife plan was not directly referenced in the collective agreement, the fact that there was both an entitlement to LTD benefits and a mechanism for dispute resolution with respect to the benefits plan was enough to put it squarely in the jurisdiction of collective agreement arbitration:

[43]      Similarly, here, the language of the dispute resolution clause in the collective agreement puts the question beyond dispute. Article 15.04(a) expressly provides that any dispute “concerning an employee’s entitlement to short-term or long-term benefits under HOODIP may be subject to grievance and arbitration under the provisions of this Agreement.”

[44]      I would not accept the appellant’s submission that, because her dispute arises under Manulife’s policy and not under HOODIP, Article 15.04(a) is inapplicable. In my view, the words “or equivalent” in Article 15.02 must be read into Article 15.04(a) to make all claims for LTD benefits arbitrable. QHC is contractually obliged to provide those benefits and must therefore be a party to any dispute concerning an employee’s entitlement.

While all collective agreements are different and specific analysis when disputes such as this arise, it is important for unionized employers to recognize that the jurisdiction of the collective agreement is virtually all-encompassing, and that case law continues to uphold this principle.  This helps limit “forum-shopping” and employers who take the right steps to address these disputes can be saved from having to incur the cost of defending multiple actions across different adjudicative platforms.  If you are faced with such a dispute, ask the team at CCPartners what your next move should be.

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