Niagara Region 'offensive, cavalier and irresponsible': Union
After Desjardins Insurance announced a potential 60 per cent increase in long-term disability (LTD) premiums for Niagara Region, Ont., workers in 2015, the union balked.
Months later, the region finalized a deal with another insurance carrier that saw a lower increase to the premiums (which were fully paid by the employees).
But in the interim, the workers had to cover a 40 per cent increase in premiums, although the impact was spread out over a 16-month period.
The 2014-15 collective agreement said the “union will be notified of resultant premium changes from the annual review process and provided an opportunity to bring forth questions and concerns concerning the LTD plan.”
Typically, the employer and Desjardins held annual talks about the plan’s renewal, whose premiums had gone up by a minimum of eight per cent annually to a maximum of 15 per cent in each of the preceding four years before the 2015 talks.
But on March 27, the region was told about the 60 per cent boost — which had to be agreed upon by May 31 — for a July 1 renewal date.
Negotiations commenced (after being hampered by an account executive leaving Desjardins in May) and on June 4, Desjardins promised to bring down the cost increase to 50 per cent, then 40 per cent.
Talks continued, but on June 30, the company announced to Niagara Region a 40 per cent increase was its final offer.
The implementation was moved ahead to Sept. 1, and the region agreed to the increase for July and August, while it continued to look for a new insurance carrier.
On July 6, the region advised the Ontario Nurses’ Association (ONA) about the new deal. Later in the month, on July 31, the region told the union that it would be working on securing a new insurance provider and would meet with the union on Aug. 12, as well as other affected bargaining units from Canadian Union of Public Employees (CUPE), to discuss the new arrangement.
Eventually, the region decided to move its LTD business to Cigna Insurance, but the July and August premiums, with the 40 per cent increase, would have to be paid out to Desjardins.
ONA grieved the process on Sept. 21, arguing Niagara Region breached its fiduciary duty to employees by taking too long to negotiate a new deal.
It wrote Niagara Region “should be held accountable and responsible for any payment due Desjardins” and called its actions “offensive, cavalier and irresponsible.”
ONA said the region should have acted before the May 31 renewal date, but only met with Desjardins on May 21, which was unreasonable.
Arbitrator Lorne Slotnick dismissed the grievance and said the region acted responsibly in the best interest of the workers and did not breach its fiduciary duty.
“The employer did not know until May 20, its first substantial contact with Desjardins, that the insurer appeared to be serious about a very large increase.
"After that meeting, it took only two weeks for the region to ask for a quotation from another carrier, while still negotiating with Desjardins in the hope that Desjardins would revise its position to make it acceptable,” said Slotnick.
The fact that the insurance company switched account executives was regrettable and caused delays that were not the fault of the employer, said Slotnick.
“It is unfortunate that the consequence was that employees paid an extra 40 per cent for two months.
"However, that outcome was not the result of any breach by the employer of the collective agreement or its fiduciary duty. The employer acted reasonably, and in keeping with its duty to employees, " said Slotnick.
Reference: Regional Municipality of Niagara Homes for the Aged and Ontario Nurses’ Association. Lorne Slotnick — arbitrator. Daryn Jeffries for the employer. Rob Dobrucki for the employee. Feb. 15, 2017
