Income protection plan puts issue outside arbitrator's jurisdiction
Before a unionized employee can take action against his employer, he must make sure he has the legal grounds to do so.
In this case, Kenny Whyte, a craft and services worker at Bell Canada, filed a grievance after he alleged his employer refused to pay short-term disability benefits without just cause. Further, Whyte’s union, Unifor, argued that any such denial of disability benefits was arbitrary, discriminatory and in bad faith.
On the other hand, Bell brought a preliminary motion to have the grievance dismissed on the basis that its Income Protection Plan (under which Whyte claimed the benefits) was not incorporated under the collective agreement, and that in fact the case should be thrown out by the arbitrator, Diane Gee.
To an extent, the company was right, Gee said.
"I do not have jurisdiction to hear the grievance in so far as it relates to the grievor’s individual benefit entitlement, but I do have jurisdiction to hear the grievance in so far as it alleges that Bell’s administration of the Income Protection Plan in connection with the grievor’s benefit claim was arbitrary, discriminatory or in bad faith," she explained.
Bell provides short-term disability (STD) benefits to all of its employees, whether they be unionized or not. The collective agreement stated the company would maintain the program of benefits provided under a list of plans, including income protection.
But because the Income Protection Plan is filed separately from the collective agreement, Gee said she was not at liberty to make a ruling.
Bell self-insures benefits provided under the Income Protection Program and employs Manulife as an agent to make its decisions as an agent of the company.
The union’s argument was, as Bell saw it, a "late re-characterization" of the first issue as opposed to seeking to expand the scope of the grievance.
However, there are collective agreement terms that exist by way of implication. That is, where the terms of an agreement are bestowed upon the discretion of one of the parties, it is implied that they will not be carried out in a way that could be considered in bad faith — during negotiations, neither a union or company would have argued otherwise.
Bell entered into the collective agreement and under it is required to provide short-term disability benefits to bargaining unit employees. The terms of the Income Protection Plan were not incorporated into the agreement and the union, as a result, cannot grieve individual benefit entitlement issues.
Thus, Bell retains the responsibility for administering the plan and determines — as an exercise of its management rights — the conditions of eligibility.
"It is simply not possible that, had the parties turned their minds to the question at the time of their negotiations, they would have agreed Bell could administer the Income Protection Plan in a manner that was arbitrary, discriminatory or in bad faith," Gee said in her decision.
Gee ruled that the collective agreement implied Bell will not exercise its management rights when administering the Income Protection Plan in an arbitrary, discriminatory or bad faith manner.
However, Gee went on to say she would have the jurisdiction to hear the grievance to the limited extent that it alleges the grievor’s denial of benefits was the result of Bell having done so in an arbitrary or discriminatory manner.
As such, she advised Unifor that the ball was in their court and the union can schedule further dates in connection with the matter if it so chooses.
Reference: Bell Canada and Unifor. Diane L. Gee — arbitrator. Evan VanDyk for the employer, Micheil Russell for the union. Oct. 29, 2014.
