Ottawa (City) v. Amalgamated Transit Union, Local 279, 2007 CanLII 51699 (ON SCDC)

COURT FILE NO.: 07-DV-1285

DATE: November 28, 2007

SUPERIOR COURT OF JUSTICE – ONTARIO (DIVISIONAL COURT)

RE: THE CITY OF OTTAWA and AMALGAMATED TRANSIT UNION, LOCAL 279

BEFORE: Cusinato J., Valin J., and Shaw J.

COUNSEL: Charles V. Hofley and Patricia P. Brethour for the Applicant

David Jewett for the Respondent

E N D O R S E M E N T

1This is an application by the City of Ottawa (the “City”) for judicial review of an arbitration award. The majority of the arbitration board held that the City was obligated to pay the costs associated with the new personal income tax, the Ontario Health Premium (“OHP”), on behalf of those employees resident in Ontario and to make an equivalent payment to those employees resident in Quebec.

2The Applicant seeks an order quashing the arbitration board’s award.

3The provision of transit services in the Ottawa-Hull region is a federal undertaking operated by the City. Employees engaged in this operation, and governed by a collective agreement between the City and Amalgamated Transit Union (the “Union”), are residents of either Ontario or Quebec.

4The arbitration award addressed a policy grievance by the Union that, in accordance with the provisions of the collective agreement, the City was required to reimburse members of the Union for the costs of OHP which came into effect on July 1, 2004.

5Until 1989, the Ontario Health Insurance Act provided that Ontario Health Insurance Plan (“OHIP”) coverage for Ontario residents required direct and fixed rate premiums to be paid by individuals. Continued medical and hospital insurance coverage was dependent upon the payment of those premiums. In unionized workplaces, the parties could bargain for the employer to pay all or part of the fixed rate premium on behalf of employees. In respect of the collective agreement between the City and the Union, the parties negotiated for the employer to pay 60% of the premiums as of 1968 and 100% of the premiums as of 1979. Quebec residents were to receive equivalent payments.

6The Health Insurance Act changed in 1989. The requirement for individuals to pay direct premiums for OHIP coverage was repealed and in its place, the Ontario Employer Health Tax (“EHT”) imposed a payroll tax on employers. Under this legislation, employers were obligated to remit funds to the provincial government based on a percentage of annual payroll and without contribution by employees. Access to medical and hospital insurance coverage was no longer dependent upon the payment of direct premiums by individuals.

7The EHT remains in effect today and employers continue to remit funds to the provincial government based on a percentage of annual payroll and without contribution from employees.

8In 2004, the Ontario Legislature passed the Budget Measures Act, 2004 (No. 2) which amended the Ontario Income Tax act by imposing a tax on all Ontario taxpayers, whether they are employees or not, and based on their income from all sources. This new tax was labeled in the amended Income Tax Act as the Ontario Health Premium (“OHP”).

9The collective agreement between the parties has had a provision dealing with direct OHIP premium payments since the 1968-1969 collective agreement. After the Government of Ontario eliminated OHIP premiums and instituted the EHT in 1990, the parties negotiated changes to the collective agreement language for the 1991-1992 agreement. This language has remained unchanged since that time and it is this language that is the subject of the arbitration giving rise to this judicial review application:

8)3.1 The Supplementary Health Insurance Plan

The Commission shall pay one hundred percent of the supplementary health insurance plan premiums. In the event that the Government of Ontario reintroduces direct individual Medicare premiums similar to OHIP the employer shall pay one hundred percent of the cost of the premium and make equivalent payments to employees residing in Quebec.

10On August 4, 2004, the Union filed a grievance claiming that Article (8) 3.1 of the collective agreement obliged the City to pay the new tax, the OHP, on behalf of employees in the bargaining unit.

11A majority of the arbitration board found the present OHP levy to be sufficiently similar to the OHIP levy so as to trigger the requirement in the collective agreement for employer payment.

12It is clear that the standard of review is patent unreasonableness.

13Applying that standard of review, we are unable to say that the majority of the arbitration board committed a reviewable error in concluding that the City is liable to pay costs associated with OHP on behalf of its transit employees.

14We are bound by the decisions of the Court of Appeal in the Lapointe-Fisher group of cases in determining what the parties intended by the language they used in the collective agreement regarding health care benefits. Even if we were to conclude that the majority’s decision is not correct, it is nevertheless logical and founded in the language of the collective agreement. We cannot say that the conclusion reached by the majority of the board of arbitration was patently unreasonable.

15The application for judicial review is therefore dismissed. In the event counsel are unable to agree on costs, they may make written submissions within 15 days.