Following the coming into force of amendments to the provincial Human Rights Code that ended mandatory retirement, five workers over the age of 65 grieved when their employer ceased paying their benefits.
While the union argued that the plain language meaning of contract entitlements to benefits for all permanent, full-time employees also applied to these senior workers, the employer took the position that the standard insurance policy language specifying the termination of benefits at age 65 applied.
Before the Arbitrator, the employer argued that amendments to the law that now permit workers to continue working beyond the age of 65 did not affect the age-based limitations on benefit entitlements as outlined in its insurance policies. The entitlements to benefits written into the collective agreement needed to be viewed through the lens of the limitations specified by the language of the insurance policy, the employer said.
End of mandatory retirement
Moreover, the context surrounding the end of mandatory retirement, the statutory amendments themselves and even the government’s communications materials explaining the policy implications of the changes indicated a clear intent to separate the issues of entitlement to benefits from the end to mandatory retirement, the employer said.
The government explicitly stated that the status quo with respect to benefit entitlements would remain despite amendments to the Human Rights Code, the employer said, citing government materials, which state that “the provision of benefits to workers aged 65 and older will continue to be at the employer’s discretion.”
When negotiating the collective agreement, the parties had clearly contemplated a cessation of benefits at age 65, the employer said and it should not now be on the hook for costly benefits that were never bargained for. The employer argued that the circumstances were analogous to case law rulings that existing contract language that compelled employers to pay employee health insurance premiums could not be extended to make employers also pay for the government’s introduction of a new and similarly named health tax.
The Arbitrator disagreed.
To suggest that it was appropriate to use the language of the insurance policy to interpret the collective agreement “was akin to suggesting the tail can wag the dog,” the Arbitrator said. The Arbitrator cited the ruling of Arbitrator Brandt in London v CUPE, Local 101 to underscore the proposition that while it may be appropriate to reference insurance plans and policies, “they cannot have the effect of ‘trumping’ entitlements which have been bargained by the parties and which form part of the collective agreement.”
Lesser benefits for senior workers
The Arbitrator agreed with the employer’s characterization of the government’s intent to carefully amend the Human Rights Code so as to prohibit discrimination with respect to employment while allowing employers to provide lesser benefits to workers who are 65 or older.
“However, the problem for the employer is that acceptance of that premise cannot change the plain and ordinary meaning of the language used in various parts of [the collective agreement] to expressly indicate those workers who are to be provided with the benefits in question. That language indicates that the benefits are to be provided to all employees or all ‘permanent employees,’ ” the Arbitrator said.
While it was true, the Arbitrator said, that prior to the end of mandatory retirement workers over the age of 65 were not included in that group of permanent employees, it would be inappropriate to now read an implied limitation to benefit entitlements based on statutory amendments introduced to end age-based discrimination.
Age-based discrimination
Even if the language of the statutory amendments appears to contemplate the possibility of benefit plan entitlements that discriminate on the basis of age, clear and unambiguous language would be required to signal that intent, the Arbitrator said.
“In short, the amendments to the Human Rights Code may enable employers and unions to make distinctions that disadvantage senior workers in their entitlement to benefits, but it does not mandate it or require us to read such a limitation into existing general contract language concerning benefits simply on the basis that workers who are 65 or older were not allowed to work past age 64 prior to December 12, 2006.”
The Arbitrator rejected the employer’s argument that the proposed extension of benefit entitlements followed a path that was rejected when rulings established that existing contract language on health insurance premiums could not be extended to cover a new health tax: “[T]hose cases were about the meaning or scope of a particular defined benefit, a promise to pay OHIP or health insurance premiums, and whether the particular wording chosen many years earlier to describe the benefit was broad enough to cover a new form of taxation that was referred to as a ‘premium’ for political reasons. It was not about determining the eligibility or scope of the group of employees covered by the benefit language of the agreement. Those are two very different enquiries.”
The grievance was allowed.
Reference: London Civic Employees,’ Local 107, Canadian Union of Public Employees and Corporation of the City of London. Brian Etherington — Sole Arbitrator. Michael Klug for the Union and Kelly Dawtrey for the Employer. June 20, 2010. 27 pp.
