Ont. arbitration decision raises concern language in union contracts could put employers on hook for payments
Employers in Ontario do not have to pay the new health premium for workers — unless, of course, they do.
Three recent arbitration decisions have muddied the waters about who is responsible for the Ontario Health Premium introduced earlier this year: workers or employers.
In two decisions, arbitrators said it was up to the employees to pay. In the other, the arbitrator said it was up to employers, raising concerns the premium could morph into a new payroll “tax” for employers.
Several unions claim because the levy is a premium, and not a tax, the collective agreement makes it the employer’s responsibility. Employers maintain the premium is actually a tax and therefore workers must pay it.
In each case, the rulings turned upon interpretations of old language in collective agreements, written to address premiums eliminated in 1990, and whether the health premium is a tax or a true premium.
Premier Dalton McGuinty said that while the Ontario Health Premium is a premium, employees have to pay for it, not employers. Critics pointed out the premium is imposed by the Income Tax Act, is collected as a tax and is referred to in the legislation as “a tax, called the Ontario Health Premium.”
Law firm Fasken Martineau said that while the issue is particularly important for employers with language referring to the old premiums, if some employers are forced to pay the premium, others will feel pressure to follow.
Already, Mississauga-based courier firm Canpar Transport LP worked out a new collective agreement with the United Steelworkers in June in which the company agreed to pick up the cost of the new premium.
The decision that has employers most unnerved involves a nursing home in Guelph. In Lapointe Fisher Nursing Home and U.F.C.W. Local 175/633, arbitrator Anne Barrett concluded that because the government said the money collected from the premium would go toward health care, it truly is a premium, not a tax. Based on language addressing the old premiums, the employer must pay the new premium, she ruled.
Conversely, in Jazz Air Inc. and Air Line Pilots Association, International, arbitrator Martin Teplitsky ruled employees should pay the premium, in part, because when the collective agreement was bargained, neither party could have foreseen a premium tax that did not exist. Benefits are specifically bargained and identified, and the premium was not, he said.
In College Compensation and Appointments Council and O.P.S.E.U., arbitrator Owen Shime said Ontario’s colleges do not have to pay the premium. The union argued language in the collective agreement said the employer would pay any premium if the government “reverts” back to the old premium for the health insurance system. Shime said the government had not “reverted” back to the old system, but introduced a new tax and therefore the employees must pay for it on their own.
Shime noted the union could have ensured the employer would have to pay the premium if it included clearer forward looking language, like: “If the government imposes any new or different charges or requires any new or different payments, those amounts will be paid for by the colleges.”
The union feels that in effect that is what the language did, but Shime’s decision was that they didn’t do it clearly enough, said OPSEU’s lawyer Don Eady.
This issue likely won’t be settled any time soon, since it’ll likely end up in the courts, said Eady. At press time, several other arbitrations over the premium were pending and the Lapointe Fisher Nursing Home stated it intends to apply for judicial review.
The key difference in the union victory in the nursing home decision was that “reverting” was not in the language in the collective agreement, said UFCW lawyer John Stout. “I think this is an issue that really is going to cause a lot of confusion,” he said. Arbitrators may say clear language can solve the problem, but every time language is changed to clarify one matter, a new problem usually pops up, he said.
Three recent arbitration decisions have muddied the waters about who is responsible for the Ontario Health Premium introduced earlier this year: workers or employers.
In two decisions, arbitrators said it was up to the employees to pay. In the other, the arbitrator said it was up to employers, raising concerns the premium could morph into a new payroll “tax” for employers.
Several unions claim because the levy is a premium, and not a tax, the collective agreement makes it the employer’s responsibility. Employers maintain the premium is actually a tax and therefore workers must pay it.
In each case, the rulings turned upon interpretations of old language in collective agreements, written to address premiums eliminated in 1990, and whether the health premium is a tax or a true premium.
Premier Dalton McGuinty said that while the Ontario Health Premium is a premium, employees have to pay for it, not employers. Critics pointed out the premium is imposed by the Income Tax Act, is collected as a tax and is referred to in the legislation as “a tax, called the Ontario Health Premium.”
Law firm Fasken Martineau said that while the issue is particularly important for employers with language referring to the old premiums, if some employers are forced to pay the premium, others will feel pressure to follow.
Already, Mississauga-based courier firm Canpar Transport LP worked out a new collective agreement with the United Steelworkers in June in which the company agreed to pick up the cost of the new premium.
The decision that has employers most unnerved involves a nursing home in Guelph. In Lapointe Fisher Nursing Home and U.F.C.W. Local 175/633, arbitrator Anne Barrett concluded that because the government said the money collected from the premium would go toward health care, it truly is a premium, not a tax. Based on language addressing the old premiums, the employer must pay the new premium, she ruled.
Conversely, in Jazz Air Inc. and Air Line Pilots Association, International, arbitrator Martin Teplitsky ruled employees should pay the premium, in part, because when the collective agreement was bargained, neither party could have foreseen a premium tax that did not exist. Benefits are specifically bargained and identified, and the premium was not, he said.
In College Compensation and Appointments Council and O.P.S.E.U., arbitrator Owen Shime said Ontario’s colleges do not have to pay the premium. The union argued language in the collective agreement said the employer would pay any premium if the government “reverts” back to the old premium for the health insurance system. Shime said the government had not “reverted” back to the old system, but introduced a new tax and therefore the employees must pay for it on their own.
Shime noted the union could have ensured the employer would have to pay the premium if it included clearer forward looking language, like: “If the government imposes any new or different charges or requires any new or different payments, those amounts will be paid for by the colleges.”
The union feels that in effect that is what the language did, but Shime’s decision was that they didn’t do it clearly enough, said OPSEU’s lawyer Don Eady.
This issue likely won’t be settled any time soon, since it’ll likely end up in the courts, said Eady. At press time, several other arbitrations over the premium were pending and the Lapointe Fisher Nursing Home stated it intends to apply for judicial review.
The key difference in the union victory in the nursing home decision was that “reverting” was not in the language in the collective agreement, said UFCW lawyer John Stout. “I think this is an issue that really is going to cause a lot of confusion,” he said. Arbitrators may say clear language can solve the problem, but every time language is changed to clarify one matter, a new problem usually pops up, he said.
