Employer cuts dental benefits to worker on maternity leave

Plan called for employer to contribute amounts to plan based on hours worked

An Ontario company violated employment standards when it stopped paying the premiums for an employee according to a new benefits agreement that came into effect while the employee was on parental leave, the Ontario Arbitration Board has ruled.

Laura Harris was a lab technician for Jungbunzlauer Canada, a manufacturer of biodegradable ingredients for the food, beverage, pharmaceutical and cosmetic industries, in Port Colborne, Ont. Harris was part of an employee dental plan for which Jungbunzlauer paid the premiums.

In September 2007, Harris went on maternity and parental leave, which would keep her off work for one year. Soon after she left, Jungbunzlauer negotiated a new dental benefit. The collective agreement specified that the company would contribute 32 cents per hour worked for each employee to the union’s Trusteed Dental Fund, beginning in January 2008. Harris was not aware of the new agreement.

In February 2008, Harris had a dental appointment and submitted a claim to the company benefits provider. She was denied the benefit and told Jungbunzlauer had not made any premium payments on her behalf in 2008.

The union filed a grievance, accusing Jungbunzlauer of violating the collective agreement and the Ontario Employment Standards Act, 2000 (ESA), by discontinuing payments to the dental fund when she went on leave. The employer argued it met its obligations under both entities, saying it contributed 32 cents per hour for all hours paid to employees as specified under the collective agreement. It said it had no obligation to make any contribution for Harris because she didn’t have any paid hours in 2008. It also argued it didn’t violate the ESA because all employees were eligible to participate in the dental fund.

The board agreed that the terms of the collective agreement didn’t obligate Jungbunzlauer to pay dental premiums for Harris while she was on leave because it was tied to hours worked. However, it found the ESA was intended to “provide statutory protection for continued participation in certain enumerated benefit plans,” including dental plans. When the employer stopped making contributions on Harris’ behalf, it prevented her from continuing to participate in the dental benefit plan, which violated the ESA’s protection for employees on parental leave.

The board also found parties to a collective agreement cannot bargain out of legislated minimum employment standards, so the ESA over-ruled the collective agreement. Therefore, it ruled Jungbunzlauer should have continued the dental benefit premium payments for Harris and remitted the matter for the union and the employer to reach a settlement. See Jungbunzlauer Canada Inc. v. U.F.C.W., Local 175, 2009 CarswellOnt 6195 (Ont. Arb. Bd.).

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