What’s in a name? Hospital, nurses at odds over definitions in contract
History did not repeat itself at a hospital in Guelph, Ont., where a group of nurses were denied a benefits improvement package based on a ruling from the early 1980s.
Represented by the Ontario Nurses’ Association (ONA), staff at the Guelph General Hospital alleged they were not provided with improvements to their benefits program they felt they were entitled to.
When an employer maintains a wage loss replacement plan for short-term disability, the employer’s employment insurance (EI) premiums are also reduced. According to the Canada Revenue Agency, any premium reduction must be divided between both parties.
The major point of contention during the hearing was whether the employer had the right to do what it pleased with the rebate. While the union said the money should have gone towards improving benefits packages, the hospital argued benefits can be widely interpreted and those costs can be allocated to improving the overall working lives of its employees.
According to the latest collective agreement, the employment insurance rebate provision would be retained by the hospital.
"The nurses’ share of the employer’s employment insurance premium reduction will be retained by the hospital towards offsetting the cost of the benefit improvements contained in this agreement," the contract stated. "The hospital shall indicate, annually, to the local union how it has allocated the rebate."
As the hospital argued, the term "benefit improvements" did not mean benefits in the literal sense — that is, vision care or hearing aids — but rather offsetting the costs of those programs.
But this was not the first time the question of benefit improvements was raised at the Guelph hospital. Back in 1981, the union petitioned the interest arbitration board to have the EI reduction be provided to employees as an annual cash rebate. That request was denied. Instead, the collective agreement following that decision outlined how the rebate would be used, which morphed into the current collective agreement’s language, saying the hospital would retain the funds to be put towards offsetting the costs of benefit improvements.
As the hospital saw it, it did not receive a separate refund from the federal government as a result of having a short-term disability plan, but rather the employer’s premiums are reduced if the employer provides a wage loss replacement plan for short-term disability. That reduction is split between the employer and employee.
"If a specific benefit is to be provided, specific contractual language is required," the hospital said, adding that the word "benefit" itself leaves room for interpretation.
"The permitted hospital retention of the nurses’ share of the EI premium reduction was not intended to provide a windfall for the employer to do what it wished with the money — for example, to pave the parking lot," the hospital noted. "Rather, the reduction resides in the envelope of the collective agreement as an ongoing offsetting contribution to the cost of benefit improvements. ‘Benefits’ should be seen as the whole panoply of benefits."
However, the nurses’ association disagreed. The provision in the collective agreement originally instated in the 1980 decision still has relevance today, according to the ONA.
The provision "requires allocation of the hospital’s retained premium reduction toward improvements to benefits as are listed in (the collective agreement), for example, to improve vision or hearing aid benefits," the ONA said, pointing specifically to the word "improvement."
"The phrase ‘benefit improvement’ requires an attribution of purpose in favour of nurses that is not satisfied by a ‘cost improvement’ delivered to the employer. (The provision) creates an ongoing employer obligation that is supported and made transparent by the requirement of an annual report to the local union," the nurses’ association continued.
Arbitrator James Hayes dismissed the grievance, and determined the provision to have a universal meaning.
"The phrase ‘benefit improvements contained in this agreement,’ without a more restrictive definition could only have meant to refer to all of the awarded benefits, seen collectively," Hayes explained. "As I understand the principal argument, the union submits that the parties are required to engage in an annual benefit improvement exercise outside of the normal collective bargaining process. Such an exercise, presumably, would be a one-way street upward based upon a fluctuating premium reduction calculation. What benefits might be involved is unstated. Indeed, apart from receiving information, it is not clear the union would have any role to play at all."
Essentially, Hayes said if the intention for the rebate was to be specifically allocated for health benefits, it would have plainly stated as such. It did not.
Therefore, the grievance was dismissed.
Reference: Guelph General Hospital and the Ontario Nurses’ Association. James Hayes – arbitrator. Rob Dobrucki for the union, Glenn Christie and Kathryn Meehan for the employer. Dec. 23, 2013.
