ONSC 5373
DIVISIONAL COURT FILE NO.: 758/18
DATE: 20191017
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Swinton, Backhouse, Favreau JJ.
BETWEEN:
Markham Stouffville Hospital (Uxbridge Site)
Applicant
– and –
Canadian Union of Public Employees, Local 1999
Respondent
Frank Cesario and Amanda Cohen for the Applicant
Mark Wright and Ella Bedard for the Respondent
HEARD at Toronto: September 16, 2019
Backhouse, J.
[1] Markham Stouffville Hospital (Uxbridge Site) (the Hospital) seeks to quash the Arbitration Board’s majority award dated November 19, 2018, which held that the collective agreement required the Hospital to provide long term disability (LTD) benefit coverage to employees who work past age 65.
[2] The Hospital argues that the award is unreasonable because it interpreted the LTD provision in the collective agreement without reference to the text of the LTD plan which provided for coverage to end at age 65. It submits that the Board unreasonably concluded that the parties’ intention was to extend LTD coverage past age 65 because the LTD provision refers to the 1992 booklet which summarizes the plan without reference to the coverage ending at age 65. It submits that this conclusion does not make sense of the language used in either the collective agreement or in the booklet which refers back to the plan.
[3] Canadian Union of Public Employees, Local 1999 (CUPE) argues that the parties are sophisticated and must be presumed to have meant what they said, and had they intended to incorporate the plan rather than the booklet into the collective agreement, they would have said so.
[4] For the following reasons, I find the Board’s decision was reasonable and took into account the language of the collective agreement and the circumstances of this case. I conclude that the Board’s decision fits within a range of possible, acceptable outcomes which are defensible in respect of the facts and the law and that their reasons for reaching that decision are intelligible, transparent, and justifiable. Therefore, I would dismiss the application.
The Collective Agreement
[5] Article 13.01(a) of the collective agreement provides:
(a) “The Hospital will pay 75% of the billed premium towards coverage for eligible employees under the long-term disability portion of the Plan (HOODIP or an equivalent plan as described in the August, 1992 booklet (Part B))”.
The HOODIP Plan Text
[6] HOODIP (Hospitals of Ontario Disability Income Program) was established by the Ontario Hospital Association to provide uniform disability benefits to employees of participating employers. Its LTD coverage has been provided through either group insurance policies or self-insured plans (the plan) but always with an eligibility cut off at age 65.
[7] A new HOODIP plan came into effect in 1992. The plan provided that: “A person under the age of 65 is eligible to be a Member if she meets all of the following conditions”. This age 65 eligibility trigger was also reinforced in other portions of the text, which provided: “the insurance of a Member terminates on the date that she no longer meets all of the conditions for Eligibility to be a Member”, and “termination of Long Term Disability Insurance: 65th birthday or retirement if earlier”.
[8] The group insurance policy in place at the Hospital at the time this grievance was brought was introduced in 2014 and was provided through Desjardins. Similar to the plans going back to at least 1980, this plan specified that LTD benefits terminate at “Age 65 of the Member or retirement, whichever occurs first.”
1992 Booklet
[9] Going back to at least 1980, there has been both a substantive plan and a brief brochure or booklet that describes the plan. The HOODIP 1980 booklet provided that benefits were payable until the member’s 65th birthday. The HOODIP 1984 booklet provided that LTD coverage terminated at age 65 but that benefits would continue past age 65 in certain circumstances reduced by pension and other benefits. (Employees on LTD benefits are no longer required to take their pensions, Canada Pension Plan or Employment Insurance benefits at age 65.)
[10] The August, 1992 booklet (the booklet) is a pamphlet that summarizes the more detailed LTD benefits provided in the plan. On its cover it states: “The statements contained in this booklet are only a summary of some of the provisions of the master policy. If you need further details of the provisions which apply to your group benefits you must refer to the master policy.” The cover of the booklet also incudes that it is “Information for Full-Time Employees Group Policy No. 2100.” It replaced the HOODIP 1984 booklet.
[11] In August, 1992, mandatory retirement occurred at age 65 which was not then a breach of the Ontario Human Rights Code, R.S.O. 1990, c. H.19 (the Code). In its “Introduction” section, the booklet states that: “this pamphlet describes the Long Term Disability (LTD) benefit.” The booklet goes on to outline the “Plan Highlights” which include that: “Long Term Disability benefits of up to 75% of earnings are provided by the Plan until the employee reaches age 65, or for life in some cases.” The booklet includes a section entitled “When Benefits Stop”. This deals with the provision of benefits for individuals already in receipt of LTD and no longer working for the Hospital. It outlines a number of triggering conditions that will stop LTD benefits, including: “your 65th birthday, if you become disabled before age 64 and you have completed fewer than 10 years of Continuous Service, when you become disabled”, and “the day 12 months after the Date of Disability, if you become disabled after the age 64 but before age 65 (Minus the qualifying period) and you have completed fewer than 10 years of Continuous Service when you become disabled.”
[12] In 2005, the Code was amended to no longer include an exception for mandatory retirement. The amendment became effective on December 12, 2006. The parties negotiated several successive collective agreements thereafter. In each round of bargaining, the reference to the 1992 booklet was preserved in Article 13.01.
The Award
[13] The majority of the Board concluded that by not providing LTD coverage after the age of 65, the Hospital breached the LTD provision in the collective agreement. It concluded that the specific reference to the August, 1992 booklet in Article 13.01(a) evidenced an intention to limit LTD eligibility only to the extent that such eligibility was described in the August, 1992 booklet, not the plan. It found, and it is not disputed, that the 1992 booklet does not provide for the termination of LTD coverage at age 65. It further noted that the two previous HOODIP booklets, from 1980-1984 and 1984-1992, had expressly included an age 65 limit. While noting that the parties probably expected in 1992 that LTD coverage would end at age 65 because that was when people retired, it reasoned that the removal of the reference to coverage terminating at age 65 in the booklet suggested that the parties intended that retirement, not age 65, would be the triggering event for the termination of LTD coverage.
[14] The Board found that if the parties had intended that eligibility was to be determined by the terms of the plan text, they would simply have left out reference to the booklet or eliminated the bracketed portion of Article 13.01(a) altogether.
[15] The Board noted that in Article 18.01, which provides for various health benefits, the parties refer to certain plans (which did not include the HOODIP plan), not booklets and that those plans had therefore been used to determine eligibility. Article 13.01 is phrased differently and the Board stated that “it must be presumed that [the parties] said something different in Article 13.01(a) because they meant something different.” It concluded that in Article 13.01, the parties “incorporated the plan only to the extent that it was described in the booklet.”
[16] The Board rejected the Hospital’s position that the plan was incorporated through the collective agreement or the booklet and that its reading was necessary to interpret the extent of the Hospital’s LTD obligations.
[17] The Board held that:
“There is nothing in the collective agreement or the booklet that provides that coverage ends at age 65 if an employee keeps working. Clear and unambiguous language would be needed for such a limitation even if it is permitted under the Code and the Employment Standards Act. We find, therefore, that LTD coverage continues for employees who work beyond the age of 65.”
[18] The Dissent rejected the majority’s decision as “erroneous and patently unreasonable”, concluding that on a plain reading of Article 13.01(a), both the August 1992 booklet and the plan were incorporated into the collective agreement. It focused on the language of Article 13.01(a), the issue of “eligibility” and “the myriad of continuing eligibility matters covered by the plan document”, the language of the booklet and the fact that the collective agreement required CUPE to be provided with a copy of the insurance plan-which would be unnecessary if the entire extent of coverage was contained within the brochure. The Dissent also noted that the Board’s interpretation would render meaningless the provisions in the booklet under “When Benefits Stop”.
Standard of Review
[19] The parties agree that the standard of review of the arbitrator’s award is reasonableness. The “reasonableness” standard was authoritatively explained in Dunsmuir:
“A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible acceptable outcomes which are defensible in respect of the facts and the law.”[^1]
[20] In Dunsmuir the Supreme Court of Canada affirmed the importance of deference in the context of collective agreement interpretation, stating that “this Court has often recognized the relative expertise of labour arbitrators in the interpretation of collective agreement, and counselled that the review of their decisions should be approached with deference…”[^2]
Issues
[21] The Hospital argues that the Board’s finding that the collective agreement only incorporated the booklet and not the plan was unreasonable for the following reasons:
(a)The plan is specifically referenced in the collective agreement (as distinct from the description of that plan in the booklet).
(b)The plan is incorporated into the booklet (and thereby the collective agreement) because there is a reference to it on the first page and elsewhere.
(c)Article 13.01(a) sets out that LTD coverage under the plan only extends to “eligible” employees. The only place in which “eligibility” is defined is in the plan.
(d)Articles 13.01(f) and (g) refer to HOODIP, not the booklet.
(e)The Board’s application of the presumption against differential benefits was unreasonable and relied upon cases which were based upon an entirely false premise.
(f)CUPE is seeking a new benefit and clear and unambiguous language is required where mandatory retirement was in place when the collective agreement obligations were negotiated.
(g)As held in the Dissent, the Board’s decision leads to absurd results, contrary to fundamental principles of contractual interpretation, specifically the provision in the booklet “When Benefits Stop”.
Analysis
[22] The Hospital’s arguments may be distilled into 3 main issues which I address below:
The Board’s award is unreasonable and gave the collective agreement an unreasonable interpretation.
The Board unreasonably relied upon and applied arbitral decisions relating to human rights principles.
The Board’s decision leads to absurd results.
The Board’s award is reasonable and gave the collective agreement a reasonable interpretation
[23] The Board found that Article 13.01(a) defines HOODIP as the 1992 booklet for the purposes of the LTD provision. It contrasted the wording in Article 13.01(a) to that in Article 18 where the parties refer to certain health and welfare plans, not booklets and those plans have been incorporated into the collective agreement and, therefore, been used to determine eligibility. The Board found that it must be presumed they said something different in Article 13.01(a) because they meant something different. It reasoned that the fact that the plan is mentioned in some places in the booklet and not others only demonstrates that it may be relevant to understanding those sections but does not mean that the whole booklet is to be read in the context of the plan. It held that the plan is not incorporated into the collective agreement through the booklet and cannot be relied upon to reduce the benefit provided in the collective agreement.
[24] The Board rejected the Hospital’s argument that the plan must be incorporated by necessity into the collective agreement because nowhere in the booklet or collective agreement does it define what an eligible employee is in Article 13.01. The Board noted that the booklet refers to eligibility, specifically in its provisions respecting the qualifying period, detailing what happens when an employee is not actively at work on what would otherwise be their effective date of coverage and defining eligibility in the context of portability of coverage, i.e. where an employee goes to work for another HOODIP employer. The Board found that the collective agreement itself provides that Article 13.01 only applies to full-time employees so full-time employment is another requirement of eligibility.
[25] While the Hospital argues that eligibility in all of those contexts addresses entrance into the plan and says nothing about exit from the plan or termination of membership, the Board found to the contrary: that eligibility could be lost under either the collective agreement or the 1992 booklet. Specifically, eligibility would be lost under the collective agreement if an employee changed from full-time to part-time. Eligibility could also be lost under the 1992 booklet if an employee transferred employers and did not inform the new employer within one month of the first day of employment, or if someone had a hiatus of more than six months between participating employers. Thus, it was not necessary to consider the plan to give meaning to the phrase “you are not eligible” in the 1992 booklet. The Board reasoned: “it does not make sense that the parties would include the words ‘you are not eligible’ in the booklet to direct the readers to the plan to learn that their coverage ends at age 65 when they could just have included that limitation in the booklet under ’When Your Coverage Terminates’ if that had been their intention. They had done that in the 1984 to 1991 booklet.”
[26] The Board also rejected the Hospital’s argument that subclauses 13.01(f) and (g) which refer to HOODIP (not the booklet), imply that the plan text is incorporated into the collective agreement. Article 13.01(f) makes “any dispute that may arise concerning an employee’s entitlement to any benefits referred to in Article 13.01, including HOODIP and equivalents” subject to the grievance and arbitration process under the collective agreement. Article 13.01(g) requires the Hospital to provide to CUPE “[a] copy of the current HOODIP plan text or, where applicable, the master policy of the current HOODIP equivalent.” The Board noted that Article 13.01(f) refers back to Article 13.01(a) which defines HOODIP as the 1992 booklet for the purposes of the LTD provisions. As to Article 13.01(g), the Board relied on earlier awards where arbitrators have found that the fact that the agreement says that a copy of the plan must be provided to the union does not mean that it is incorporated into the collective agreement or that the union is presumed to have agreed to the terms of the plan or even that the collective agreement will be interpreted in accordance with the plan. The Board found that the purpose of Article 13.01(g) is so that CUPE can monitor the coverage for which the Hospital has contracted.
[27] The Board considered and rejected the Hospital’s arguments raised as grounds of review that the collective agreement incorporated the LTD plan. There is nothing in the Board’s conclusions with respect to the interpretation of the collective agreement that is unreasonable or falls outside a range of possible acceptable outcomes which are defensible in respect of the language of the collective agreement. I would not give effect to the Hospital’s grounds of review that the Board’s award is unreasonable and gave the collective agreement an unreasonable interpretation.
The Board reasonably relied upon and applied arbitral decisions relating to human rights principles
[28] The Board then goes on to consider what it describes as the Hospital’s primary argument which is that CUPE is seeking a new benefit and that clear and unambiguous language is required for such an interpretation. The Hospital proffers no jurisprudence in support of this assertion. The Board relied on a number of prior awards where arbitrators have found that even though the parties did not change the language of their collective agreements after the change to the legislation with respect to mandatory retirement, the parties must be presumed not to have intended discriminatory provisions even if they were legal. This line of arbitral awards stands for the proposition that clear and unambiguous language is required to provide lesser benefits to employees who work after age 65. In the absence of such clear and unambiguous language, an intention to differentiate on the basis of age should not be imputed.
[29] The Hospital argued in its factum that Re Strathroy-Caradoc Police Association and the Municipality of Strathroy-Caradoc Police Services Board[^3] and Scarborough Hospital v. Canadian Union of Public Employees, Local 1487[^4], relied upon by the Board are decided on a fundamental misunderstanding of the law, namely that “the Code makes differentiating in the provision of benefits for individuals over 65 a form of ‘legally possible discrimination’”, rather than not being discrimination at all. However, before this Court, the Hospital submitted that this was an argument for another day and the language in the collective agreement which limits LTD coverage to age 65 contained in the plan could not be more clear or unambiguous.
[30] The Hospital attempts to distinguish Scarborough Hospital and Strathroy on the basis of “different facts”, but does not explain how these different facts render the presumption against differential benefits inapplicable. I agree with CUPE’s submission that it cannot be unreasonable for the Board to apply an unchallenged line of arbitral awards.
[31] In this regard, the Board held:
“The parties could have agreed to include the age 65 limit for LTD coverage in the collective agreement anytime since 1992 if that was their intention. Many collective agreements do include such a limit. The parties have had the opportunity during every negotiation since 2006 to ensure that the language in the collective agreement reflected their bargain in light of changes to the Code. They continued to include Article 13.01(a) without adding that the Employer’s obligation to pay LTD premiums ends at age 65. Furthermore, the parties must be presumed to have known the jurisprudence related to benefit continuation after age 65 when they negotiated the collective agreement under which this grievance was filed but they did not specify that LTD coverage would end at that age. Coverage will, therefore, continue until such time as they agree to such a change.”
[32] I do not agree with the Hospital’s submission that the collective agreement clearly and unambiguously provides that the Hospital’s obligation to pay LTD premiums ends at age 65. I find nothing unreasonable in the Board’s rejection of the Hospital’s argument that because mandatory retirement was still in place when the wording in Article 13.01(a) was negotiated, it cannot have been the parties’ intention in the collective agreement at issue that persons working after the age of 65 were entitled to LTD coverage. The plain and ordinary meaning of the language used in Article 13.01 supports the Board’s interpretation. I would not give effect to the Hospital’s ground of review that the Board unreasonably relied upon and misapplied arbitral decisions relating to human rights principles.
The Board’s decision does not lead to absurd results
[33] In support of its argument that the Board’s decision leads to absurd results, contrary to fundamental principles of contractual interpretation, the Hospital submits that under the Board’s interpretation of the “When Benefits Stop” provision in the 1992 booklet, an employee at age 65 with less than 10 years of service would have LTD coverage but (under the express terms of the booklet) no benefit entitlement. It submits that the Board failed to make sense of what the collective agreement says and that the only way for this provision to make sense is to conclude that the parties intended to incorporate the plan (and therefore the provision terminating LTD coverage at age 65) into the collective agreement.
[34] CUPE submits that this is not an “absurd” result but rather what the parties have bargained for. It submits that it would be more unfair if an employee with 30 years of service was entitled to benefits but disentitled from LTD coverage simply because they had turned 65.
[35] I agree with the Hospital that the “When Benefits Stop” provision in the 1992 booklet does not make much sense if LTD coverage continues for employees who work beyond the age of 65. It is somewhat artificial to talk of what the parties intended in regard to a provision which was adopted at a time when mandatory retirement was in effect. This is similar to the situation in Strathroy-Caradoc Police Assn. quoted by the Board where the arbitrator noted that the parties took no active steps to change their bargain after the Code was amended which left her “interpreting the parties’ unchanged agreement against the altered legislative landscape.”[^5] The Board notes that the parties were clear throughout the arbitration that the issue before them was whether LTD coverage ends at age 65 and they were not dealing with entitlement to benefits. In my view, the Board reasonably concluded that the “When Benefits Stop” provision did not contain the requisite clear and unambiguous language that would lead to a conclusion that lesser benefits should be provided to employees who work after age 65.
[36] I would not give effect to the Hospital’s ground of review that the Board’s decision leads to absurd results.
Conclusion
[37] In conclusion, I am unable to agree with the Hospital’s submissions that the Board’s decision is unreasonable. The Board’s conclusions as set out above were reasonable and consistent with the language of the collective agreement, arbitral jurisprudence and the circumstances of this case. I conclude that the Board’s decision fits within a range of possible, acceptable outcomes which are defensible in respect of the language of the collective agreement and that its reasons for reaching that decision are intelligible, transparent, and justifiable. Therefore, I would dismiss the application.
[38] Costs are payable to CUPE in the amount of $7,500.00, an amount agreed upon by the parties.
Backhouse J.
I agree _______________________________
Swinton J.
I agree _______________________________
Favreau J.
Released: October 17, 2019
CITATION: Markham Stouffville Hospital (Uxbridge Site) v. CUPE, Local 1999, 2019 ONSC 5373
DIVISIONAL COURT FILE NO.: 758/18
DATE: 20191017
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Swinton, Backhouse, Favreau JJ.
BETWEEN:
Markham Stouffville Hospital (Uxbridge Site)
Applicant
– and –
Canadian Union of Public Employees, Local. 1999
Respondent
REASONS FOR JUDGMENT
Backhouse, J.
Released: October 17, 2019
[^1]: Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190 at para.47 [^2]: Dunsmuir, para. 68. [^3]: 2012 51946 (Cummings) [^4]: 2014 CanII 66059 (ON LA) (Goodfellow) [^5]: Strathroy-Caradoc Police Assn. paragraph 18