Insights Header image
Insights Header image
Insights Header image

Employer Benefits Obligations: Read Documents Carefully

March 2017 Employment and Labour Relations Bulletin 2 minute read

A recent Ontario labour arbitration decision confirms the importance of having employment and benefits documents drafted with care.

In Ontario Nurses’ Association v Victorian Order of Nurses for Canada – Ontario Branch, 2017 CanLII 5514 (ON LA), the arbitrator found that a claim against the employer for denial of long-term disability (LTD) benefits was inarbitrable.

Background

Deborah Hatt was engaged by the VON to perform home care at patients’ homes. Unfortunately, she has a serious medical condition which resulted in her being unable to work.

The obligations of the employer relating to LTD benefits as they relate to Hatt are set out in a collective agreement negotiated with the ONA. The key provision in the collective agreement provides as follows:

The Employer shall contribute towards the premium coverage of participating eligible nurses in the active employ of the Employer under the insurance plans set out below, subject to their respective terms and conditions, including any enrolment requirements.

When Hatt was denied LTD benefits, she filed a grievance pursuant to the collective agreement.

Positions of the Parties

The VON’s position before the labour arbitrator was its obligations were limited to obtaining an LTD plan and remitting premiums on behalf of employees. In other words, the collective agreement and employer obligations were “premiums only”, with no commitment that specific benefits would be provided. Simply put, the VON emphasized that terms and conditions of coverage were a matter between the insurance carrier and the employees.

The union’s position was that the language incorporated the insurance benefits, including LTD coverage, into the collective agreement. In particular, there was reference to a plan being established, which arguably created an employer obligation.

Outcome

The arbitrator accepted the employer’s argument based on the specific wording of the collective agreement. The collective agreement was drafted such that any and all responsibility for payment of benefits was with the insurance carrier. As a result, there was no jurisdiction in this particular case for a labour arbitrator to hear a case about the denial of LTD benefits.

Takeaways for Employers

This decision highlights the importance of careful review and drafting. While the ruling comes from a labour arbitrator, these principles are also applicable to non-union employees who may have similar wording in their offer letters and employment contracts. In all cases, explicit limits to employer obligations can save costs and needless disputes.

by George Waggott

A Cautionary Note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2017

Insights (5 Posts)View More

Featured Insight

Do You See What I See? Fake AI Cases Can Result in Real Contempt

Reliance on an AI hallucinated case in submissions to the court can constitute a breach of professional obligations and may amount to contempt.

Read More
May 11, 2025
Featured Insight

Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act: Where to next for companies?

Join subject matter experts from McMillan and Pillar Two for a webinar to support companies in addressing their forced labour, child labour and other modern slavery risks, and to support their reporting obligations under the Canadian Fighting Against Forced Labour and Child Labour in Supply Chains Act.

Details
Tuesday, May 20, 2025
Featured Insight

Why Extended Producer Responsibility and the Circular Economy Demand Boardroom Action

Discussion of global amendments to Extended Producer Responsibility (EPR) and right to repair laws, impacting product lifecycle management and regulatory compliance for businesses.

Read More
May 6, 2025
Featured Insight

Québec’s Bill 96: Where we are now after four years and the road ahead

Join Enda Wong, Business Law, Shari Munk-Manel, Employment & Labour Relations, and Émile Catimel-Marchand, Financial Services and Regulatory as they discuss Bill 96, its impacts on the day-to-day operations of companies doing business in Québec, including in the areas of employment, contracting, product design, labelling and advertising.

May 5, 2025
Featured Insight

Put Your Best Foot Forward: New Evidence Requirements for Trademark Appeals

Discussion of amendments to Canada's Trademarks Act impacting timing of delivery of evidence to the Trademark Opposition Board or later to the Federal Courts.

Read More
Apr 30, 2025