GSB# 1724/00

UNION# 01A329, 01A330, 01A331

IN THE MATTER OF AN ARBITRATION

Under

THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT

Before

THE GRIEVANCE SETTLEMENT BOARD

BETWEEN

Ontario Public Service Employees Union (Culen)

Grievor

• and -

The Crown in Right of Ontario (Ministry of Correctional Services)

Employer

BEFORE

Marilyn A. Nairn

Vice-Chair

FOR THE UNION

Eric O'Brien Grievance Officer Ontario Public Service Employees Union

FOR THE EMPLOYER

Andrea Kuprejanov Staff Relations Officer Ministry of Public Safety and Security

HEARING

November 29, 2002.

DECISION

The parties agreed to deal with this grievance through an expedited med/arb process. Consequently, after informal discussions with the parties, I received and reviewed the bulk of the relevant documentary material prior to the matter convening. That material included an outline of the relevant chronology of events leading up to the grievance, correspondence and documents relating to the grievor’s long-term income protection (“LTIP”) claim, and a will-say statement from the grievor’s legal counsel in the civil action referred to later. I received certain further documents at the outset of the hearing to complete the record. The parties were agreed that I hear submissions on the preliminary objection brought by the employer on the basis of the material before me.

The parties are agreed that this decision is without prejudice to their respective positions in any other case, that is, the decision will not constitute a precedent in respect of any other proceeding. The parties are further agreed that this decision may provide abbreviated reasons. The parties have reserved their rights regarding process in the event that this matter continues.

This grievance alleges that the employer has been making improper deductions from the grievor’s pay. As clarified at the outset the issue is not one of deductions but an allegation that the employer has failed in its obligation under Article 42.3 of the collective agreement to pay pension contributions on behalf of the grievor. The relevant portion of Article 42.3 provides:

The Employer will continue to make pension contributions and premium payments….on behalf of the employee….while the employee receives or is qualified to receive L.T.I.P. benefits under the plan, unless the employee is supplementing a Workplace Safety and Insurance award.

The background facts can be set out briefly. The grievor was in receipt of LTIP benefits from January 1992 until June 1994. At that time further benefits were denied on the basis that the grievor was not totally disabled from any occupation. The grievor filed a grievance seeking the reinstatement of his LTIP benefits. Subsequently a civil action was brought by the grievor against the insurance company also seeking reinstatement of his LTIP benefits. On July 10, 1997 the grievance was referred to arbitration. On September 15, 1997 the grievor, with legal counsel, settled the civil action in consideration of the amount of $150,000.00 and signed a release. On September 26, 1997 the grievor confirmed to the employer that he had withdrawn his grievance. The union did not assert that the withdrawal was ineffective absent its express consent.

The employer argues that the grievor cannot assert any rights under Article 42.3 of the collective agreement in light of the terms of the release he signed. The union argues that the terms of the release cannot be so broadly construed. The relevant portions of the release provide:

IN CONSIDERATION OF the payment by Confederation Life of the sum of One Hundred Fifty Thousand Dollars ($150,000.00), all inclusive, to the Undersigned [the grievor], the Undersigned in every capacity and on behalf of the heirs, executors, administrators, successors, and assigns of the Undersigned hereby releases and forever discharges Confederation Life Insurance Company – in Liquidation, its successors, assigns, representatives, directors, officers, employees, lawyers and agents, KPMG Inc. (formerly Peat Marwick Thomas Inc.), its successors, assigns, representatives, directors, officers, employees, lawyers and agents, the Office of the Superintendent of Financial Institutions, its successors, assigns, representatives, directors, officers, employees, lawyers and agents, The Canadian Life and Health Insurance Compensation Corporation (CompCorp), its successors, assigns, representatives, directors, officers, employees, lawyers and agents, The Manufacturers Life Insurance Company, its successors, assigns, representatives, directors, officers, employees, lawyers and agents, and her Majesty the Queen in Right of Ontario, Represented by the Minister of Government Services, its successors, assigns, representatives, directors, officers, employees, lawyers and agents (collectively referred to as “Releasees”) and the property of the Releasees from any and all claims, demands, sums of money, debts, covenants, bonds, accounts, actions, causes of action, rights, obligations and liabilities of every kind and nature whatsoever which the Undersigned has had or claims to have had or now has or claims to have or may later have or claim to have against the Releasees and the property of the Releasees which arise out of or are in any manner whatsoever, directly or indirectly, connected with or related to any obligations under the said policy.

THE UNDERSIGNED represents, warrants and agrees that, in executing this Full and Final Release Agreement, the Undersigned does so with full knowledge of any and all rights which the Undersigned may have with respect to the Releasees and that the Undersigned has received independent legal counsel from the Undersigned’s lawyer, … with regard to the facts involved in the matter herein and with regard to the Undersigned’s rights and asserted rights arising out of the said facts. The Undersigned further states that the Undersigned does not rely and has not relied on any representations made by the Releasees with regard to the Undersigned’s rights or asserted rights in this connection and the Undersigned hereby assumes the risk of any mistake of fact in connection with the true facts involved in said matter and with regard to any facts which are unknown to the Undersigned relating thereto.

IT IS UNDERSTOOD AND AGREED that the payment of the said sum is not deemed to be an admission of liability on the part of the Releasees. The Releasees further agree to waive any rights in respect of a set-off to the Undersigned’s disability benefits from his entitlement for benefits through the no-fault insurer.

(emphasis added)

There is no dispute that the release includes a release of employer obligation. The issue is the extent of that release. The union argues that the claim at issue in the grievance is not “directly or indirectly, connected with or related to any obligation under the said policy”. Rather, the union argues, the pension contribution is a collective agreement right. The union also argues that the employer is attempting to circumvent the union, as it was not a party to the civil action or the release. The union argues that the employer cannot do indirectly what it could not do directly, that is, negotiate directly with an employee regarding the release of collective agreement rights.

Article 42 of the collective agreement sets out the rights and obligations of employees and the employer in respect of LTIP coverage and claims. Unlike other collective agreements this agreement sets out in some detail the specific requirements of any plan in effect. There is no dispute that any issue of whether one is “totally disabled” within the meaning of that term is determined, at least initially, by the insurance company. There is also no dispute that the insurance company is not the insurer. Rather, the employer bears the risk of paying, not only its portion of the premium cost, but also, ultimately, the cost of the benefits. In this context it is perhaps not surprising that any release obtained by the insurance company includes a release of employer obligation. The insurance company is essentially acting as an agent of the employer.

In these circumstances it is difficult to draw the kind of distinction between the policy and any corresponding collective agreement right asserted by the union. The policy is arguably a creation of the collective agreement. For example, the definition of ‘total disability” is found in Article 42.2.4 of the collective agreement. The policy’s definition must be consistent with that collective agreement requirement.

The union acknowledges that its position on the merits of the grievance would necessarily involve the inquiry of whether (at the relevant time) the grievor is “receiv[ing] or is qualified to receive LTIP benefits” as required by Article 42.3. It further acknowledged that such an inquiry, at least with respect to whether the grievor was qualified to receive benefits, would involve the issue of whether he was totally disabled, that is, a medical inquiry. That is the issue the parties to the civil action chose not to litigate. The workplace parties were precluded from an inquiry into that issue by the withdrawal of the grievance seeking benefits. Moreover, the inquiry into whether the employee was totally disabled would flow from Article 42.2.4 of the collective agreement as reiterated by the terms of the policy, not from Article 42.3.

It makes little sense to conclude that this sub-article in the collective agreement, contained within the broader provisions of Article 42, could found an independent cause of action to determine entitlement to pension contributions. Under this approach, an employee could pursue a grievance seeking LTIP benefits, go through the claims process with the insurance company, appeal any denial, and finally be denied benefits after a full inquiry into the medical considerations. Yet that employee could then, under the union’s argument, pursue an independent claim to pension contributions and require the parties to revisit all of the medical considerations under Article 42.3. It seems highly unlikely that the parties intended such an opportunity or outcome, a conclusion supported by the reference in Article 42.3 to the words “under the plan”. It is in that context that the words of the release need be considered.

The grievor sought to enforce a claim for LTIP in two forums. He ultimately chose to proceed in the civil context. He has, in exchange for a monetary settlement, released any interest in pursuing the necessary factual foundation for a claim under Article 42.3. The monetary settlement he obtained cannot be construed as benefits as the release expressly stipulates that there has been no admission of liability for benefits (see also Re Ottawa-Carlton (Regional Municipality) and C.U.P.E., Loc. 530 (Jacques) (2000) 2000 CanLII 50135 (ON LA), 88 L.A.C. (4th) 7 (Burkett). The grievor has also waived any and all claims arising out of the facts relating to the issue of his entitlement to benefits, and has done so with an acknowledgement of “full knowledge of any and all rights which [he] may have with respect to the [employer]”. Both the grievor and his legal counsel were aware of his concurrent and outstanding grievance seeking reinstatement of LTIP benefits. In light of the terms of the release the grievor must be taken as having knowledge of Article 42.3 of the collective agreement.

To the extent that the union was not a party to the release, there is an issue of the remedial discretion as noted in Re Ottawa-Carlton, supra. Even accepting the union’s interpretation, it would be inappropriate to award an individual remedy in circumstances where the individual has released all obligations giving rise to that remedy. While the union has an interest in advancing arguments as to the proper interpretation of the collective agreement, this is not a policy grievance. It exists primarily to provide a remedy to the grievor.

I find that the claim under Article 42.3 is a claim or cause of action that is indirectly, if not directly, connected with or related to an obligation under the policy. The determination of entitlement to benefits under the definition of total disability lies at the heart of the policy. It also lies at the heart of the applicability of Article 42.3. Consistent with the decision in Re Ottawa-Carlton, supra, I find that given the release executed by the grievor, I would not be prepared to “upset the bargain entered into by the grievor” by engaging a process to consider a remedy that is conditional upon receipt of, or being qualified to receive benefits that the grievor has agreed not to pursue.

Having regard to the above, this grievance is hereby dismissed.

Dated at Toronto this 17th day of December, 2002.