GSB# 2017-0260

UNION# 2016-0999-0051

IN THE MATTER OF AN ARBITRATION

Under

THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT

Before

THE GRIEVANCE SETTLEMENT BOARD

BETWEEN

Ontario Public Service Employees Union (Union)

Union

• and -

The Crown in Right of Ontario (Ministry of Government & Consumer Services)

Employer

BEFORE

Nimal Dissanayake

Arbitrator

FOR THE UNION

Susan Ursel and Erin Epp Ursel Phillips Fellows Hopkinson LLP Co-Counsel

FOR THE EMPLOYER

Paul Meier and Maria-Kristina Ascenzi Treasury Board Secretariat Legal Services Branch Co-Counsel

HEARING SUBMISSIONS

May 25, 2018; Jan. 22, Feb. 8, 11, 14, July 22, 25, Oct. 01, 02, Nov. 20, 2019; Jan. 20, 2020. Completed December 18, 2020

Decision

1This decision relates to the following policy grievance dated June 9, 2016:

The Union grieves that the employer’s requirement for Members in receipt of, or applying for, Long Term Income Protection to provide the Employer with their earliest eligibility date for an unreduced pension and their amount of credit in the OPSEU pension plan is discriminatory on the basis of disability, in violation of Article 3 of the Collective Agreement, the Ontario Human Rights Code and the Canadian Charter of Rights and Freedoms. The Union further grieves that the Employer’s requirement for Members who are in receipt of, or eligible to receive LTIP, and who have 30 years of credit in the OPSEU Pension Plan or are eligible to retire to an unreduced pension, to either retire or pay their own pension contributions is discriminatory on the bases of age and disability in violation of Article 3 of the Collective Agreement, the Ontario Human Rights Code and the Canadian Charter of Rights and Freedoms.

SETTLEMENT DESIRED

1. That the Employer cease and desist from these practices.

2. That Articles 42.3.2 and 42.3.3 be struck from the Collective Agreement.

3. Any other remedy required to make the union and any affected members whole.

2The parties agreed that the Board determine whether the articles in question violate the Human Rights Code (“the Code”) and/or The Canadian Charter of Rights and Freedoms, (“the Charter”) and remain seized with remedy. I was advised that the Attorneys General were duly given notice of the instant proceeding. The attorneys general, however, did not seek to intervene.

3The parties entered into a renewal collective agreement with a term January 1, 2015 to December 31, 2017. Under predecessor collective agreements, active employees were required to pay one half of the pension contribution (“the employee share”), which was matched by the employer (The employer share”). However, under article 42.3.1 recipients of benefits under the Long-Term Insurance Plan (“LTIP”) were exempted from the requirement to pay the employee share as long as they remained eligible for LTIP. The employer paid both shares of their pension contribution.

4The 2015-2017 collective agreement added articles 42.3.2 and 42.3.3 for full-time employees, and corresponding articles 70.3.2 and 70.3.3 for Part-Time, Regular Part-Time, and Flexible Part-Time employees. For present purposes I set out only the relevant full-time provisions. They read:

42.3.1 The Employer will continue to make pension contributions and premium payments for the Dental Plan and for Supplementary Health and Hospital on behalf of the employee, at no cost to 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.

42.3.2 For employees who, on or before December 31, 2015, are receiving or deemed eligible to receive L.T.I.P. benefits or who are making an application for L.T.I.P. benefits:

a) The employee must provide the Employer, by no later than January 1, 2016, with written confirmation from the OPSEU Pension Trust of the earliest date he or she will become eligible for an actuarially unreduced pension and the current amount of his or her credit in the OPSEU Pension Plan.

b) Notwithstanding Article 42.3.1 and effective January 1, 2016, where an employee has a minimum of thirty (30) years of credit in the OPSEU Pension Plan or is eligible to retire to an actuarially unreduced pension under the OPSEU Pension Plan, whichever is later, and where the employee does not retire, he or she shall pay the employee’s portion of pension contributions while the employee receives or is qualified to receive L.T.I.P. benefits under the plan.

42.3.3 For employees who make an application for L.T.I.P. benefits on January 1, 2016 or later:

a) The employee must provide the Employer, when making his or her application for L.T.I.P. benefits, with written confirmation from the OPSEU Pension Trust of the earliest date he or she will become eligible for an actuarially unreduced pension and the current amount of his or her credit in the OPSEU Pension Plan.

b) Notwithstanding Article 42.3.1, effective January 1, 2016, where an employee has a minimum of thirty (30) years of credit in the OPSEU Pension Plan or is eligible to retire to an actuarially unreduced pension under the OPSEU Pension Plan, whichever is later, and where the employee does not retire, he or she shall pay the employee’s portion of pension contributions while the employee receives or is qualified to receive L.T.I.P. benefits under the plan.

5The impact of the changes that result from articles 42.3.2(b) and 42.3.3(b) (“Impugned provisions”) form the basis of the policy grievance. The union alleges that the impugned provisions of the collective agreement violate the Code and the Charter, which guarantee the right to equal treatment without discrimination because of prohibited grounds including age, and requests an order that they be struck. The Board was advised that as of the time of this hearing the impugned provisions have not been implemented by the employer.

UNION EVIDENCE

Testimony of Cheri Hearty

6Ms. Hearty has been employed as Benefits Officer with OPSEU since 2012. Her duties included providing expertise on pension plans and insured benefits for members in the OPS bargaining unit. Prior to assuming the Benefits Officer Position, for some 12 years she worked as a Benefits Consultant with the OPSEU Pension Trust (“OPT”), and provided information on pension issues to OPSEU members.

7With the aid of a power-point presentation, Ms. Hearty testified that, subject to a six-month qualifying period an employee who becomes ill or is injured, is eligible to receive LTIP until age 65 provided he/she remains “totally disabled”. The employer paid all benefit premiums and the full amount of the pension contributions for all employees on LTIP (“LTIP employees”).

8Ms. Hearty testified that under the impugned provisions an employee on LTIP with at least 30 years of credit in the OPSEU Pension Plan and is eligible for an actuarially unreduced pension under one of the early retirement provisions, (hereinafter “impacted employee”) is required to make a choice of either retiring early or remaining on LTIP and paying the employee share of the pension contribution.

9Ms. Hearty testified that an OPS employee is entitled to receive an unreduced pension upon retiring at the normal retirement age of 65 years. However, the pension plan allows an employee to retire early and still receive an unreduced pension if he/she is eligible for a disability pension or meets either Factor 60/20 or Factor 90. To be eligible for a disability pension, the employee must have more than 10 years of service, be considered “totally and permanently disabled” by the OPT, and must terminate employment. To meet the 60/20 Factor the employee must be at least 60 years old and have at least 20 years of pension credit. To qualify for Factor 90, the age plus years of pension credit must total at least 90.

10Ms. Hearty described the consequences of the choice an impacted employee is required to make. If the employee retires early while still eligible for LTIP the employment relationship comes to an end. The employee will no longer accrue credits in the pension plan; will no longer be entitled to insured benefits under the collective agreement such as health, dental and life insurance; and would also lose the right to return to work. An employee who does not retire and remains on LTIP is required to start paying the employee share of the pension contribution. LTIP employees ineligible for an unreduced pension, or do not have 30 years of pension credit continue to have the employer pay both the employer and employee shares.

11Ms. Hearty testified that under articles 42.3.2(a) and 42.3.3(a) LTIP recipients and employees applying for LTIP are also required to inform the employer of the amount of credit they have in the pension plan and the earliest date of eligibility for early retirement. She testified that the OPT considers that information to be confidential. No other employees are required to provide that information.

12Ms. Hearty testified that an impacted employee who elects not to retire and stays on LTIP, would continue to receive LTIP benefits of 66 2/3% of his/her salary. The LTIP amount is taxable income. His/her share of the pension contribution will be over 10% of the annual salary amount. Thus if the annual salary is $50,000, the LTIP amount (66 2/3%) is approximately $33.000. Out of that approximately $5000 goes towards the employee share of the pension contribution. Ms. Hearty testified that therefore unless they have savings or other sources of income, impacted employees would be in seriously disadvantaged financially.

13Illustrating with hypothetical examples, Ms. Hearty emphasized that given the criterion of 30 years of credit in the pension, the vast majority of LTIP employees impacted would be older individuals. She emphasized that given dual criteria of age (via the 60/20 and 90 factor) and 30 years of pension credit, only LTIP employees 54 years of age or older could be impacted by the impugned provisions. LTIP employees under 54 years can never be impacted.

14In cross-examination, Ms. Hearty testified that the most recent OPSEU collective agreement effective January 1, 2018 to December 31, 2021, continues the impugned provisions with no changes. Counsel reviewed charts showing how hypothetical employees joining the OPS at different ages fared under the collective agreement prior to the inclusion of the impugned provisions (“old regime”), particularly showing when each LTIP employee became eligible for early retirement on an unreduced pension under factors 60/20 and 90. Ms. Hearty agreed that an LTIP employee who had joined the OPS at 32 years would qualify for early retirement on unreduced pension under Factor 60/20 at age 62. If he opts not to retire early the employer paid both shares of his pension contribution until age 65. In this period that employee continues to earn pension credits based on the annual salary amount, although the LTIP amount is only 66 2/3% of that. In contrast, employees actively at work were required to pay their share of the pension contribution in order to continue earning pension credits. If an active employee takes unpaid leave of more than one month no credits are earned in that period unless the employee pays both shares of the pension contribution.

15Ms. Hearty agreed that no employee group other than LTIP employees had the employer pay both shares of the pension contribution. Counsel reviewed with Ms. Hearty several hypothetical scenarios involving employees who remain on LTIP for varying periods of time before LTIP ceases at age 65. He put to her that under the old regime LTIP employees received large sums of money consisting of LTIP benefits of 66 2/3% of salary, top up payments, bridge payments etc. without any cost to them. In addition the employer paid the full pension contribution on behalf of LTIP employees. Therefore, if employee A goes on LTIP at age 48, for A to get to 30 years of pension credit to be able to retire early, the employer would have paid the full pension contribution for that employee for a total cost of $166,828.00. Ms. Hearty agreed with counsel’s suggestions, assuming that his calculations were accurate.

16Employer counsel contrasted with Ms. Hearty a scenario under the impugned provisions (the “new regime”) where LTIP employee B, who becomes eligible to an unreduced pension at age 62, but elects to remain on LTIP to age 65 and pay his own share of the pension contribution. Ms. Hearty agreed with the following. B will pay his own share for 3 years for a total cost of $14,000.00. The employer matches this and pays its share of $14,000.00. Based on his annual wages B would receive LTIP payments of approximately $100,000.00 over those three years. Ms. Hearty agreed that therefore under the new regime the employer saves the amount of the employee $14,000.00 share which it would have paid under the old regime. She also agreed that by staying on LTIP and paying his own share for three years, B would receive $42,000.00 more in pension, assuming he lives to age 85.

17Counsel reviewed another hypothetical scenario involving employee C, who goes on LTIP at age 48. Given his personal circumstances – long periods of unpaid and parental leaves and not buying back pension credits for those periods – even when he reaches age 65 years, C would not have 30 years of pension credits. Ms. Hearty agreed that even though C had hit the 60/20 and 90 factors along the way, because he did not have 30 years of pension credits, even under the new regime the employer would be required to pay both shares of the pension contribution for him until he reaches age 65 when LTIP terminates. She agreed that under the new regime the change in the employer’s obligation is not based on a calendar date, but on the employee having 30 years of pension credit and eligibility to retire early on an unreduced pension. Counsel contrasted C with employee D who also goes on LTIP at age 48 years. The employer pays both shares of the pension contribution for D from age 48 to 59 years. However, at age 63 D would have 30 years of pension credit and the 90 factor. Therefore, D would be required to start paying her own share of the pension contribution if he opts not to retire. Counsel put to Ms. Hearty that both C and D had hit a factor based on age, but their different treatment was based on when they reached 30 years of pension credits. Ms. Hagerty agreed.

18Counsel reviewed another scenario of employee E who joins the OPS at age 20. At age 50 he would have 30 years of pension credit. However, the impugned provisions would not apply to E because he would not have hit a factor at age 50. At age 55 E would hit the 90 factor, and already had met the 30 years of pension credit requirement. The impugned provision is therefore triggered. Ms. Hearty agreed that E would therefore have to start paying the employee share only at age 54, because that would be when he became eligible to retire on an unreduced pension.

19In re-direct, Ms. Hearty confirmed that under the old or new regimes, unlike LTIP employees, an active employee who retires early, for example at age 62, is not required to provide pension credit information indicating the earliest date when he/she would be eligible to retire early with unreduced pension or pension credit status. If an active employee who is eligible to an unreduced pension decides not to retire early, as long as he continues to be actively working he/she earns full salary and receives all benefits under the collective agreement.

20Ms. Hearty reiterated that the earliest the impugned provisions will have impact on an LTIP employee who meets the 30 years credit, and an early retirement factor would be on reaching 54 years. An employee who goes on LTIP at age 20 would be impacted at age 55. If disabled at age 30 the impact would happen much later. An employee going on disability pension at age 40 may never be impacted by the impugned provisions because he/she will not become eligible for unreduced early retirement until age 70. Ms. Hearty agreed with propositions union counsel put to the effect “younger the employee’s age, the longer he can remain on LTIP without meeting the factor test” and “Two employees could be disabled for the same period, but the younger employee can remain on LTIP much longer without triggering the impugned provisions”.

21Ms. Hearty reiterated that in the scenario employer counsel reviewed under the new regime, the employer would reap a saving of $14,000, but the employee who lives to age 86 would suffer a total loss of $48,000.

Testimony of Twila Marston

22Ms. Marston has been employed full-time with OPSEU since 2001. During negotiations that resulted in the impugned provisions, Ms. Marston was a member of the union negotiating team. The collective agreement was to expire on December 31, 2014. She testified that when bargaining for a renewal agreement commenced in November 2014, the employer lead negotiator took the position that the employer was facing a financial crisis and therefore the new collective agreement had to be “net zero”, i.e. no cost to the employer, and also that the employer would be seeking a number of concessions to reduce costs.

23Ms. Marston testified that when the employer presented its first proposal on November 20, 2014, it included proposals to “restructure” LTIP and STSP provisions in the collective agreement. It included a proposal that the employer would no longer pay the employee share of the pension contribution for LTIP employees with 30 years of pension credit. The employer emphasized that it wanted employees to get off LTIP as quickly as possible and return to work. The union’s reaction was that this was not a proposal to achieve net zero, but a demand for concessions from LTIP employees. The union team was very upset and angry. The union sought time to consider a response to the proposed changes to LTIP. In January 2015, proposals were exchanged on other monetary items. At that time, the employer was informed at the table that the union was of the view that the employer’s proposal on LTIP would be a violation of the Ontario Human Rights Code.

24Ms. Marston described subsequent negotiation sessions at which the employer presented various proposals. However, there was no change to its proposal on LTIP. Ms. Ruth Hamilton, a member of the union team reiterated to the employer the union’s position that the employer’s proposal on LTIP is a demand for concessions and not a net zero proposal, and is a violation of the Code.

25Ms. Marston testified that on December 6, 2014, the union received a strong strike mandate from its members. On January 6, 2015, when the parties met with MOL conciliator Mr. Greg Long, Ms. Hamilton again repeated the union’s position, and argued that the financial crisis the employer was facing was a result of its own mismanagement and bad policies, which should not be solved on the backs of LTIP employees. Shortly after, the union triggered essential services negotiations in preparation for a potential strike/lockout.

26When negotiations resumed in September 2015, Mr. Jerry Lee had been appointed as conciliator. At the time, out of the 35,000 employees in the bargaining unit, about 2150 were on LTIP. Referring to documentation, Ms. Marston testified that since all other significant issues had been settled, the union did not want to hold up the signing off of the collective agreement because of the LTIP issue. It proposed a Letter of Understanding agreeing to the employer’s proposal subject to certain changes. First, that only LTIP employees with 33 years (instead of 30) accrued pension credit and are deemed totally disabled would be impacted, and second that the new provisions would not apply to employees currently in receipt of LTIP. Ms. Marston testified that the union believed that with the changes it sought, the impugned provisions would apply to very few LTIP employees. However, the employer did not move from its position. The Memorandum of Settlement was finally signed on September 22, 2015, with the union giving in to the employer’s position. However, the union had made it clear that since the parties are very close to a deal on all other issues it would sign off, but reserves the right to grieve that provision.

27In cross-examination, Ms. Marston agreed that she understood at the time that the collective agreement being negotiated would set out the terms that would bind the employer, the union, and all bargaining unit employees for the next 3 years. She acknowledged that negotiations are always hard fought and involve both parties giving up demands and granting concessions. Ms. Marston also agreed that at the time the MOS was signed the union was in a position to strike, and that in the MOS the union agreed to recommend to its membership that the MOS, which included the impugned provisions, be ratified.

28When employer counsel continued to cross-examine on the proposals that were exchanged on the LTIP issue leading up to the signing of the MOS, union counsel objected. Following discussion with the arbitrator, it was agreed by counsel, that while the evidence may become relevant in relation to remedy if liability is found, since remedial issues are bifurcated, at this stage the hearing should be about whether the provision in question which are clearly part of the collective agreement contravene the Code or the Charter.

29Employer counsel then turned to the allegation in the grievance that the requirement in the impugned provision that employees in receipt of or applying for LTIP provide the employer with their earliest eligibility date for unreduced pension and their amount of credit in the pension plan is discriminatory. Ms. Marston agreed that the union ultimately agreed to that requirement. Counsel put to her that an employee may apply for LTIP at any age, and she agreed. Counsel put that parties had also included in article 44.10 a requirement that an employee must provide a medical certificate in order to receive sick pay after five days of absence. She agreed.

EMPLOYER EVIDENCE

Testimony of Mike Mously

30Mr. Mously held the position of Corporate Staff Relations Officer/Labour Relations at the Treasury Board Secretariat, and was a member of the employer negotiation team in the 2014-15 negotiations. He filed a will say declaration which he adopted under oath, and also gave viva voce testimony. He held the lead role for the employer with respect to the impugned LTIP provisions, and also drafted the language of the articles. He testified in detail about the thinking of the members of the employer team and the discussions and consultations the team had internally as proposals on the LTIP issue were made. Of particular note was his testimony that the employer team identified that no other employee category could accrue pension credit without making pension contributions except for LTIP recipients. Employees actively at work had to pay their own share of the pension contribution. So did employees absent for reasons other than long-term disability. In most cases employees on unpaid leave were required to pay their own share as well as the employer’s share. The team felt that the employer should not be subsiding the LTIP employees’ pension contribution, when all other employee groups paid their own share.

31Mr. Mously testified in detail about the negotiations at the bargaining table. When union counsel questioned the relevance of this evidence, employer counsel explained that this evidence would show that LTIP recipients had been a uniquely privileged group under previous collective agreements and that the employer negotiated changes with the union to relieve itself from some of the financial burden it bore. He said that this evidence will also show that LTIP employees would continue to be an advantaged group compared to other groups of employees even with the impugned provisions because the employer’s approach was measured and reasonable.

32Mr. Mously went on to review how the impugned provisions would work in practice, including when LTIP employees become eligible for early retirement with unreduced pension to trigger the provisions. He rationalized that the majority of LTIP employees would not be impacted because they would not reach the threshold of 30 years of pension credit. As an example he pointed out that an employee who joins the OPS after age 35 is very unlikely to be in a position to retire early with 30 years of pension credit. It was his opinion that the provisions negotiated were “not a win or loss of either party”.

33Mr. Mously emphasized that active employees continue to pay their own share of pension contribution during all types of leaves including absences due to sickness, WSIB absences and vacations. He disagreed with the union’s allegation of age discrimination. He said that the requirement of 30 years of pension credit is “not directly related to an employee’s age”. Whether an employee meets that requirement depends on several other factors including when he joined the OPS. An employee who joined the OPS later in his working life as a second career may never meet the 30 year pension credit requirement, while an employee who joined the OPS in his teens would.

34Mr. Mously also explained that information about employee pension credit status is necessary for the employer to be able to establish whether an employee meets the 30 years of pension credit threshold to trigger the impugned provisions. That information has to come from the employee because the OPT would not give the employer access to that information directly. He agreed that under the impugned provisions the employer would not make any pension contributions for any employee failing to provide the required information. He testified that under these provisions an employee who does not pay his share of pension contribution would continue to receive LTIP benefits. However, the employer will also not make its share of the pension contribution on behalf of that employee. Therefore, the employee would not earn any pension credits.

35In cross-examination, Mr. Mously agreed that unlike employees in receipt of or applying for LTIP, no other OPS employees are required to provide the employer with information about their pension credit status or earliest eligibility date for early retirement. He confirmed that where a LTIP employee fails to provide that information, the employer would stop making deductions for pension contribution from his LTIP and also would not make the employer share of pension contribution for that employee.

36Mr. Mously agreed that the employer had not researched how many of the current LTIP recipients would be impacted by the impugned provisions under either factor 60/20 or factor 90. Therefore, the amount of potential savings for the employer resulting from the impugned provisions is unknown. He agreed that if an employee opts to retire early rather than remain on LTIP, and starts paying his share of the pension contribution, he severs his employment relationship. Therefore he would lose benefits under the collective agreement benefits package like, dental, eye-glasses, etc., but would move to lesser post-retirement benefits. He also agreed that since the employee would no longer earn pension credits, his pension amount will remain static.

37Counsel put to Mr. Mously that as soon as the impugned provision is triggered, a LTIP employee is required to make the choice of either retiring early or paying his share of contribution and remaining on LTIP, regardless of how close he is to recovery from his disability and returning to work. He agreed. Counsel put to him that if the purpose of the impugned provisions is to get employees off LTIP and back to work, this does not make sense. Mr. Mously testified that the reason the employer wanted the provisions was its conclusion that the employer should not be making pension contributions on behalf of LTIP employees who have access to alternative sources of sufficient income. He testified that if the impugned provisions had been applied to all LTIP employees eligible to retire early, the savings for the employer would have been much greater. However, then a large number of LTIP employees would have been adversely impacted. In order to avoid that, application was limited only to employees with 30 years of pension credit. That ensured that only those able to retire early with “a sizable pension” would be impacted.

38Counsel suggested that all LTIP employees, regardless of age or years of service, may want to get off LTIP and return to work as soon as they recover. She asked why only older employees with long service are disadvantaged by being forced to make the choice. Mr. Mously replied that it is justified because they are able to access a sizable pension income. He agreed that other than the availability of a sizable pension, other factors like long-term illness and the possibility of returning to work are the same for all LTIP employees.

39Mr. Mously agreed that his rationale that only employees having “alternate sources of sufficient income” are impacted refers only to alternative income resources under the collective agreement. LTIP employees who are rich, or have personal sources of income are not impacted, because those are financial sources not related to employment in the OPS. He agreed that the previous collective agreement provisions whereby the employer agreed to pay both shares for LTIP employees were also negotiated through collective bargaining, like the impugned provisions. In this round of collective bargaining the employer negotiated changes to that. He stated that once the union agrees to language to the effect that certain rights are conditional on the employee providing medical information, in order to get those rights the employees must comply with that condition. Similarly, since the union has agreed to criteria to be met if employees wish to remain on LTIP, employees must meet those criteria to have the employer pay both shares of the pension contribution. He agreed that the union is not able to direct the OPT to release employee pension status information to the employer. Only the employee can access that information.

40In re-direct, Mr. Mously reiterated that when deciding whether to retire early, it is up to each impacted LTIP employee to consider all of his/her personal circumstances including the financial situation. If an employee decides that a pension greater than 60% of salary would be needed given his/her financial situation, the option is to continue on LTIP and pay the employee share of the pension contribution. Then under the impugned provisions the employer would continue to match with the employer share of pension contribution. The employee continues to earn pension credits, increasing the pension amount he would be entitled to upon retirement.

Testimony of John Lambert

41Mr. Lambert, a pension consultant, retired from the OPS in 2016. He also submitted a will-say declaration and testified. He testified at length about the nature of the OPT pension, how it is funded, the purpose of pension contributions and the mechanics of how the pension plan works. Referring to TBS reports, historical statistics, he testified that the total of pension contributions for LTIP employees in the OPS in 2013 amounted to approximately $26 million, but by November 2016 it had decreased to about $22-23 million. He testified that on average, OPS employees retired at age 65 with pension credit of 25 years. In March 2017, the average retirement age was 61.5 with 26.5 years of credit. In 2017 the average age of employees hired into the OPS was 36.1 years. Mr. Lambert testified that during the last decade the hire age of employees in the OPSEU bargaining unit has increased. He said that those joining after age 35 years are unlikely to meet the 30-year pension credit threshold to qualify for early retirement with unreduced pension. He estimated that presently more than 40% of new hires would be 35 years or older. Those employees may qualify for early retirement under 60/20 or 90 factors, but would not have 30 years of pension credits. Therefore, they would not be impacted by the impugned provisions.

42Mr. Lambert also explained how the impugned provisions would operate and why the dual criteria of eligibility for early retirement with unreduced pension and 30 years of pension credits were negotiated. Like Mr. Mously, he also emphasized that the choice of remaining on LTIP and paying the employee share or retiring early is solely for each employee to make based on his/her own circumstances.

43Mr. Lambert testified that changes had to be made to the pension plan itself before the impugned provisions could be implemented. He was involved in preparing drafts of the changes needed, which were presented to the union for its input and approval. The intention was to present a joint request to the OPT for changes. A final draft of the changes needed to the pension plan was presented to the union for its approval, but at the time he retired in November 2016 the union had not responded. Mr. Lambert reviewed the contents of the draft and explained why the changes were necessary before implementation of the impugned provisions. Mr. Lambert also explained why the employer needed information about the pension credit status of employees in receipt of or applying for LTIP to be able to determine whether the impugned provisions are triggered, and why only the employee can obtain that information from the OPT. He testified that equally shared contribution provisions for benefits are not unique in collective agreements. and that in many unpaid leave situations there are requirements for shared contributions by the employer and employee.

44Under cross-examination, Mr. Lambert testified that the “unpaid leaves” he referred to were leaves under the Employment Standards Act, such as pregnancy and parental leaves, WSIB absences, and discretionary leave the employer may grant under the collective agreement. When counsel put to Mr. Lambert that those are not “unpaid”, because during pregnancy and parental leaves for example “top-ups” apply, he conceded that he is not familiar with those provisions. However, he said that the point is the “default rule” with regard to pension is that the employer and employee pay equal shares of the pension contribution. He conceded, however, that the employer’s agreement in the collective agreement to pay both shares for LTIP employees ousted that default position.

45Counsel put to Mr. Lambert that his testimony about the ages of employees joining the OPS, retiring from the OPS, and the pension credits they have at retirement etc., are only “rough justice numbers” he came up with by applying information in past reports on trends and averages. He agreed.

46Counsel put to Mr. Lambert that once an employee hits the threshold in the impugned provisions, he/she is forced to pick one of three options: (1) Remain on LTIP, pay the employee share of the pension contribution, and have the employer match it; (2) Take early retirement with its consequences; (3) Remain on LTIP, but not pay the employee share. Then no pension credits will be earned because the employer will not match contributions either. Mr. Lambert agreed.

47Under questioning, Mr. Lambert agreed that if an employee who has hit the threshold decides to stay on LTIP, the employee must agree to have the employee share of the pension contribution deducted from his LTIP amount to be able to continue accrual of credits. If the employee opts to retire early, and his/her pension is less than 66 2/3% of salary, LTIP will top it up to age 65, as long as the employee remains disabled. In this scenario, his pension amount at age 65 will be based on the pension credit amount frozen at the time of retirement.

48Mr. Lambert agreed with counsel’s following suggestions. When WSIB is approved for a LTIP employee, the employer pays for the first 65 days of the absence. After that, the WSIB pays the amount equal to 85% of the employee’s regular wage, less deductions only for CPP and EI and income tax. If the employee decides to continue on LTIP and pay his own share of pension contribution, the amount of the share is based on the higher amount of 85% of wages and not the LTIP amount of 66 2/3%. Therefore, his pension contribution amount would be higher.

49In re-direct, Mr. Lambert clarified that there are some types of unpaid leaves where employees and the employer share pension contributions, but in others, employees are required to pay both shares to be able to earn credits.

DECISION

50The parties agreed that the Ontario Human Rights Code (“Code”) and the Canadian Charter of Rights and Freedoms (“Charter”) are binding on the parties and that the Board has jurisdiction to interpret and apply their provisions. The relevant provisions are:

Canadian Charter of Rights and Freedoms

Section 1:

The Canadian Charter of Rights and Freedoms guarantees the rights and freedoms set out in it subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.

Section 15(1):

Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.

Ontario Human Rights Code

Section 5 (1):

Every person has a right to equal treatment with respect to employment without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, gender identity, gender expression, age, record of offences, marital status, family status or disability.

1. Section 11 (1):

2. A right of a person under Part I is infringed where a requirement, qualification or factor exists that is not discrimination on a prohibited ground but that results in the exclusion, restriction, or preference of a group of persons who are identified by a prohibited ground of discrimination and of whom the person is a member, except where,

(a) the requirement, qualification or factor is reasonable and bona fide in the circumstances …

(2) The Tribunal or a court shall not find that a requirement, qualification, or factor is reasonable and bona fide in the circumstances unless it is satisfied that the needs of the group of which the person is a member cannot be accommodated without undue hardship on the person responsible for accommodating those needs, considering the cost, outside sources of funding, if any, and health and safety requirements, if any.

51The crux of the union’s allegation is that the impugned provisions result in adverse effect discrimination on the basis of age, in that they disproportionately impact on older LTIP employees negatively. The union emphasized that the negative impact is only on LTIP employees over 54 years of age. It argued that the provisions clearly imply that these older LTIP employees are less valuable. They are forced, or at least encouraged to retire, rather than remain on LTIP and with the potential of returning to active work when sufficiently recovered, with or without accommodation.

52First, I deal with the significance of the fact that the impugned provisions were agreed to by the employer and the union and included in a collective agreement. The employer continuously prefaced its submissions by pointing out that the impugned provisions were jointly agreed to and signed off following collective bargaining, and that the union even recommended that its members ratify the memorandum of settlement which included the impugned provisions. The union on the other hand led evidence that the union signed off on the collective agreement “under protest”, that it sought and obtained an indemnity from the employer in the event the union is found liable for discrimination, and that it explicitly reserved the right to grieve the impugned provisions as discriminatory. It suffices to observe that the employer’s argument as well as the union’s defense are of no consequence or effect. It makes no difference whether parties agreed unreservedly and willingly, or agreed only reluctantly. The law is clear and long accepted that the unions and employers cannot contract out of obligations under either the Charter or the Code. See, Central Okanagan School District No. 2B v. Renaud, 1992 CanLII 81 (SCC), [1992] 2 S.C.R. 970(SCC) at pp. 985-986. If provisions in a collective agreement are discriminatory, both the employer and the union are party to that.

53There is arbitral authority to the effect that while collective bargaining may generally be viewed as a fundamental Charter freedom, and as an important social policy, it does not follow that provisions that violate the Charter resulted from collective bargaining are justified. ONA v Chatham-Kent (Municipality) (Etherington), [2010] 202 L.A.C. (4th) at para. 143.

54The impugned provisions make no reference to “age” in setting out factors that trigger that their application. The union does not claim that the impugned provisions directly discriminate on the basis of age. The only dispute is whether they result in adverse effect discrimination in violation of the Charter and the Code when applied.

55The parties agreed that the legal principles that govern the Charter and the Code are the same See, B.C. (Public Service Employee Relations Commission v. BCGSEU, 1997 CanLII 317 (SCC), [1997] 3 S.C.R.3 (S.C.C.)3 at pp.30-31.) (“B.C. Public Services Employees Relations Commission”). In order to succeed in its policy grievance the union has the initial onus to establish prima facie discrimination. The test is set out in Moore v. British Columbia, 2012 SCC 61, [2012] 3 S.C.R. 360 (S.C.C.) at para.33 as follows:

33… to demonstrate prima facie discrimination, complainants are required to show that they have a characteristic protected from discrimination under the Code; that they experienced an adverse impact with respect to the service; and that the protected characteristic was a factor in the adverse impact. Once a prima facie case has been established, the burden shifts to the respondent to justify the conduct or practice, within the framework of the exemptions available under human rights statutes. If it cannot be justified, discrimination will be found to occur.

56In B.C. (Public Service Employment Relations Commission (supra) at p. 29 McLacklin J quoted Iacobucci J in Law v. Canada (Minister of Employment and Immigration 1999 CanLII 675 (SCC), [1999] 1 S.C.R. 497 at para. 80, to the effect that to establish a prima facie violation of S. 15(1) of the Charter, “What is required is that the claimant establish that either the purpose or the effect of legislation infringes S. 15(1) such that the onus may be satisfied by showing only a discriminatory effect”. (Emphasis in original)

57There was significant evidence that the employer consciously attempted to be compliant with its human rights obligations. Thus, it avoided proposing an age limit as the threshold for triggering of the impugned provisions because that would be prohibited as discriminatory on the basis of age. Therefore, it chose a different method to trigger the application of the impugned provisions. I have no doubt that the employer did not intend to discriminate against older LTIP employees. The union did not allege intentional or direct discrimination either. To the contrary, the employer resorted to a method which it in good faith believed avoided prohibited discrimination. However, the fact that the employer had no intention to discriminate is irrelevant. In O’Malley v. Simpson-Sears Ltd., 1985 CanLII 18 (SCC), [1985] 2 S.C.R. 536 (S.C.C.) the Supreme Court of Canada held that the effect of an impugned provision or policy, not the underlying intent, was the governing factor in determining whether there was discrimination. This principle has been affirmed in numerous other decisions including Brooks v. Canada Safeway Ltd., 1989 CanLII 96 (SCC), [1989] 1 S.C.R. 1219 at para.32. In McKinney v. University of Guelph 1990 CanLII 60 (SCC), [1990] 3 S.C.R. 229 at p. 279 the Supreme Court of Canada stated, “not only does the Charter protect from direct or intentional discrimination, it also protects from adverse impact discrimination”.

58The evidence establishes that while the method the employer proposed, and the union ultimately signed off on, avoided direct discrimination, it did not avoid the discriminatory effect on older LTIP employees.

59It is uncontradicted and unchallenged that the impugned provisions could only affect LTIP employees who are between ages 54 and 65. It is clear that eligibility to early retirement with unreduced pension by itself would not trigger the provisions. For the impugned provisions to apply the LTIP employees must also have 30 years of pension credit. The evidence establishes that due to the latter criterion the provisions disproportionately impact older LTIP employees. As noted, only employees aged 54 and over can reach that threshold. The employer used hypothetical scenarios and demonstrated that LTIP employees of the same age could be differently impacted by the provisions. One 60 year old employee would be affected, but another 60 year old with only 10 or 20 years of pension credit would not. On that basis it was argued by the employer that the differentiation is made not because of age, but the pension credit amount of the LTIP employee.

60However, in analysing discrimination under the Code and the Charter, the question is not whether all members of a protected group are discriminated against. The inquiry is whether the impugned provisions have a disproportionate negative effect on members of the protected group. In Battlefords and District Co-Operative Ltd. V. Gibbs 1996 CanLII 187 (SCC), [1996] 3 S.C.R. 566 (S.C.C.) at para 27, Sopinka J wrote, “The case law has consistently held that it is not fatal to a finding of discrimination on a prohibited ground that all persons bearing the relevant characteristic have been discriminated against”. See also, Jansen v. Platy Enterprises Ltd. 1989 CanLII 97 (SCC), [1989] 1 S.C.R. 1252 (S.C.C.). In Quebec (Attorney General v. Alliance Du Personnel Professionnel et Technique de La Sante Et Des Services Socianx, 2018 SCC 17, [2018] 1 S.C.R. 464 (S.C.C.), Abella J at para 26 wrote, “… it is not appropriate at the first step of the S. 15(1) analysis to require consideration of other factors – including discriminatory impact, which should be addressed squarely at the second stage of the analysis. The focus must remain on the grounds of the distinction”. (Italics in the original)

61In Withler v Canada (Attorney General) 2011 SCC 12, [2011] 1 S.C.R. 396 S.C.C. at para. 64, Abella J wrote, “… what is alleged is indirect discrimination, that although the law purports to treat everyone the same, it has a disproportionately negative impact on a group or individual that can be identified by factors relating to enumerated or analogous grounds” (emphasis added). This judgement stands for the proposition that members of a group identified as protected by an enumerated ground who are negatively impacted by the impugned provision meets the first step of establishing prima facie discrimination, even if others in that group may not be impacted.

62In the present case, only a sub-set of the protected group, that is LTIP employees who have 30 years of pension credit and therefore generally older, are impacted. Only those over 54 years can be impacted. As the S.C.C. stated in Quebec supra at para. 26, “the distinction stage of the analysis should only bar claims that are not intended to be protected by the Charter because they are not based on enumerated or analogous grounds, which are constant markers of suspect decision making or potential discrimination”, and “The first step of the S. 15(1) analysis is not a preliminary merits screen, nor an onerous hurdle designed to weed out claims on technical bases”. This Board in Re Anich/Union, 2016-2225 (Devins), although dismissing the grievance on the particular facts, at para. 25 accepted “as a general rule, that eligibility to retire can be regarded as a proxy for age and consideration of an employee’s retirement status might be an improper exercise of discretion or a violation of the Ontario Human Rights Code”. In the instant case the dual criteria of eligibility for early retirement on unreduced pension and having 30 years of pension credit, disproportionately impact older LTIP employees, and apply only to those over 54 years.

63In MacKinnon v. Celtech Plastics Ltd., 2012 HRTO 2372, in finding that the employer’s attempt to replace the complainant and treating him adversely because of his seniority was sufficiently connected to the ground of age, at para. 24 the Tribunal wrote:

24Obviously, seniority in a workplace is based on years of service rather than age. However, while a small number of years of service may have little or no connection to age, a high number of years of service has a strong connection to age; it is obvious that an employee who has accrued 35 years of service will predictably be over 50.

64In Deane v. Ontario (Community Safety and Correctional Services), 2011 HRTO 1863, at para. 85, the Tribunal wrote that “… there is a clear connection between age and retirement since only older workers are eligible for retirement and receipt of a pension”. At para. 86 it observed, “similarly, encouraging an older employee to take advantage of retirement options might result in discrimination because the message could be that the older employee is no longer valued as an employee”.

65I conclude that the criteria in the impugned provisions, although unintended, act as a proxy for age. Therefore, the union has established prima facie discrimination.

66Before proceeding to the second stage of the S. 15(1) analysis, I turn to the employer’s reliance on bona fide occupational requirement (“BFOR”). In B.C. Public Service Employee Relations Commission (supra) at para 54, the Supreme Court of Canada wrote:

I propose the following three-step test for determining whether a prima facie discriminatory standard is a BFOR. An employer may justify the impugned standard by establishing on the balance of probabilities:

(1) that the employer adopted the standard for a purpose rationally connected to the performance of the job;

(2) that the employer adopted the particular standard in an honest and good faith belief that it was necessary to the fulfilment of that legitimate work-related purpose; and

(3) that the standard is reasonably necessary to the accomplishment of that legitimate work-related purpose. To show that the standard is reasonably necessary, it must be demonstrated that it is impossible to accommodate individual employees sharing the characteristics of the claimant without imposing undue hardship upon the employer.

67I conclude that the evidence does not support a finding of BFOR in the instant case. Assuming that steps 1 and 2 are met, there are two significant problems in relation to step 3. First, although the employer cast the impugned provisions as an attempt to maintain the viability of the pension plan as a whole, which but for the collective agreement, is to be funded jointly by the employee and the employer in equal shares, the evidence is clear that the purpose or goal was cost savings. The employer and the union had previously agreed to exempt LTIP employees from the normal or default “equal shares” funding requirement. That was a benefit extended to all LTIP employees. There was evidence that at the bargaining table in 2015 the employer emphasized that it was seeking to reduce its LTIP costs because the government was facing a financial crisis. Through negotiations and compromise the impugned provisions were agreed to. Mr. Mously candidly testified that the goal was to reduce costs for the employer. In deciding who would be impacted the employer settled on those LTIP employees who would be eligible for a “sizable” pension of 60% of wages. Mr. Mously emphasized that as a result of the compromise reached, only about 200 LTIP employees would be impacted.

68In B.C. (Superintendent of Motor Vehicles) v. B.C. (Council of Human Rights [1997] 3 S.C.R. 868 (S.C.C.) (“B.C. Superintendent of Motor Vehicles”) at para 41, McLachlin J wrote:

41 … While in some circumstances excessive cost may justify a refusal to accommodate those with disabilities, one must be wary of putting too low a value on accommodating the disabled. It is all too easy to cite increased cost as a reason for refusing to accord the disabled equal treatment. This Court rejected cost-based arguments in Eldridge v. British Columbia (Attorney General), 1997 CanLII 327 (SCC), [1997] 3 S.C.R. 624, at paras. 87-94, a case where the cost of accommodation was shown to be modest. I do not assert that cost is always irrelevant to accommodation. I do assert, however, that impressionistic evidence of increased expense will not generally suffice.

69As the court acknowledged, costs may sometimes be relevant, and in some circumstances excessive cost may even justify refusal to extend equal treatment to a protected group. In the instant case, the employer did not lead evidence with any degree of specificity as to the amount of cost savings that would result from the impugned provisions, particularly in relation to the employer’s total costs of subsidizing pension contributions for LTIP employees. When asked in cross-examination for the amount of savings the employer would achieve as a result of the impugned provisions, Mr. Mously replied that he did not know. The evidence, however, does establish that the number of employees impacted would be small, and therefore, the cost savings would be modest. The employer used this evidence to support its position that it had been reasonable and not arbitrary.

70I find that the only evidence before the Board – that there would be some modest savings to the employer – does not meet the test for a BFOR. I find that the employer has not established a BFOR or undue hardship, and the finding of prima facie discrimination must stand.

71I now turn to the second step of the S. 15(1) analysis, which is about the adverse impact of the impugned provisions. The employer argued that impacted LTIP employees are not adversely affected because they have several choices to pick from freely, based on their own personal and financial circumstances. However, I agree with the union’s position that once the impugned provisions are triggered, the LTIP employee is forced to pick one of three choices, and no matter what choice is picked there is discriminatory and negative impact. The evidence establishes that once the provisions are triggered, the employee must choose one of the following options:

(a)The employee has the option of not taking early retirement and instead staying on LTIP. This enables the employee to continue to accrue pension credits. Therefore the pension credit amount grows and upon retirement at a later dater he/she would be entitled to a larger pension amount. The adverse effect, however, is that unlike other LTIP employees, he/she would be required to start paying his/her own share of the pension contribution. The union’s evidence is that the amount of the employee share would be more than 10% of the employee’s LTIP income. That places a significant financial burden on the employee whose only income stream is LTIP, a burden other LTIP employees do not have.

(b)The employer submitted that impacted LTIP employees are also free to remain on LTIP without paying the employee share of the pension contribution. However, then the employer also would not make any contribution on behalf of the employee. The employee’s pension credit status is frozen and he/she would not earn any further pension credit. When the employee ultimately retires the pension amount will be based on the lower static pension credit amount. He/she, in other words, would receive a lower pension amount.

(c)If the employee elects to take the option of early retirement he/she obviously would not be making any further pension contributions, and unlike other LTIP employees, would no longer accrue credits in the pension plan. His/her pension amount would also be based on the credit status at the time of retirement and therefore limited to 60 percent. The employee’s employment relationship also ends upon retirement. Therefore, the employee loses all employee benefits under the collective agreement, and is moved to no-cost post-retirement benefits, which are lesser. The employee also gives up the right to return to work upon recovery from the disability.

72It is also important that an LTIP employee must make the choice as soon as the 30-year credit threshold is reached. The provisions are triggered regardless of whether the particular LTIP employee had been recently disabled and commenced receiving LTIP with no prospect of returning to work in the near future, or whether he/she had been on the lower LTIP income for a while, but had recovered and was close to returning to work. In both scenarios the employee is forced to choose one of the options. If the latter employee is forced to retire because of inability to afford his own share of pension contribution, he/she too loses the opportunity to return to work and earn regular wages and all benefits under the collective agreement.

73The employer also argued that the impugned provisions are reasonable and not arbitrary, because the existence of 30 years of pension credit as a condition ensures that the employee would receive approximately 60% of the pension upon retirement. The employer would have paid both shares of the pension contribution until employee had sufficient credit to receive 60% of the pension. The employer had therefore treated the employee reasonably when compared to non-LTIP employees, who must at all times pay their own share of the contribution. Therefore they are not as disadvantaged as the union asserts.

74The employer also repeated that all employee groups other than LTIP employees pay their share of the pension contribution because the pension plan is jointly funded. Joint payment was referred to as the “normal” or “default” position. It was pointed out that employees off sick with sick pay, off on WSIB benefits, and employees on unpaid leave for over one month are required to continue paying their share of the pension contribution if they wish to earn pension credit. The employer has no legislative obligation to pay the employee share on behalf of LTIP employees. However, for years the employer had done that. While the employer has withdrawn the subsidy from the impacted LTIP employees, it only means that they revert to the “normal rule”, that employees and the employer jointly fund the pension plan equally. They are still advantaged over all other employee groups who never had the benefit of the employer paying their share of the contribution. The impacted employees would at least get their share paid by the employer until they qualify to receive a substantial pension amount. In addition impacted employees may also be entitled to other sources of income following retirement by way of LTIP top up payments, and have access to a cost free package of retiree benefits. This access to various sources of income provides them a reasonable income upon retirement. These are benefits not available to non-LTIP employees.

75In Telos and Grand Erie D.S.B., 2018 HRTO 680, at para. 16, the Tribunal wrote:

I do not accept the responses advanced by the Board that Mr. Talos suffered no disadvantage because of the “generous” nature of his pension, that “he [Talos] can lead an economically viable life during his senior years” because he benefited from being the member of a union, and that his transition to government funded programs at age 65 adequately substituted for benefits that he previously enjoyed as part of his remuneration package. I find that these considerations are irrelevant to determining whether Mr. Talos’ equality right (to equal compensation) in employment as guaranteed by s. 15 (1) of the Charter was infringed.

Similarly whether or not impacted LTIP employees still would have a sufficient income stream and reasonable retiree benefits upon retirement is irrelevant in determining whether their right to be free from age discrimination guaranteed by the Charter and the Code was infringed. As the Tribunal in Telos found at para 243, “a worker’s lifetime earnings are not relevant to whether carving out a benefit was constitutional.”

76With respect, I find that these are considerations not appropriate in an analysis of discrimination under the Charter or the Code. The Supreme Court of Canada has discouraged the use of comparator groups at this stage of the Charter analysis. See,Withler (supra), at paras. 55-64; Moore (supra) at paras 28-31. However, if the impacted LTIP employees are to be compared, the comparator group ought to be the younger LTIP employees who are not impacted by the impugned provisions, not non-LTIP employees not disabled and actively at work. In Battlefords (supra) an employee became disabled as a result of a mental disorder and was unable to work. She exhausted her sick leave and was then paid benefits under an insurance policy the employer had for its employees. That policy provided a replacement income for employees who become unable to work. However, under the policy if the disability was a mental illness the replacement benefit ended after two years, unless the employee remained in a mental institution. At para 32. Sopinka J wrote:

… in my opinion it was appropriate, in the circumstances, to compare the benefits received by the mentally disabled with those received by the physically disabled. The present case involves an allegation of an inadequate benefit. In order to assess the adequacy of the benefit, there must be a comparison between the benefits paid to the person with a mental disability and some other group. Clearly, if the comparator group is all persons without a disability, then a claim of discrimination on the basis of inadequate disability insurance benefits would seldom be successful. Such a result appears contrary to the underlying purpose of human rights legislation, especially given the particular historical disadvantage facing the mentally disabled.

77The court’s observations about the inappropriateness of comparing an employee unable to work because of a disability with persons with no disability equally apply here. Impacted LTIP employees are disadvantaged in two ways. They are totally disabled and are older. It is not appropriate to compare them with employees who are healthy and actively at work. In Brooks v. Canada Safeway Ltd., 1989 CanLII 96 (SCC), [1989] 1 S.C.R. 1219 (S.C.C.) at para 34, Dickson C.J. stated:

Increasingly, employee benefit plans have become part of the terms and conditions of employment. Once an employer decides to provide an employee benefit package, exclusions from such schemes may not be made in a discriminatory fashion. Selective compensation of this nature would clearly amount to sex discrimination. Benefits available through employment must be disbursed in a non-discriminatory manner. (emphasis added)

In my opinion that is exactly what happened here. The collective agreement extended a benefit to LTIP recipients who are totally disabled and unable to work, by paying both shares of the pension contribution. By the impugned provisions, the benefit was then withdrawn from those LTIP employees who had accumulated 30 years of credit, all of whom are necessarily 54 years or older. As already concluded, the limitation in the impugned provisions disproportionately affect older LTIP employees.

78In the result, the Board concludes that the impugned provisions result in discrimination on the basis of age in violation of the Charter and the Code.

Section 1 of the Charter

79The employer has the onus of proving on a balance of probabilities that the impugned provisions are saved by S. 1 of the Charter. Both parties agreed that the test for Section 1 is that set out in R v. Oakes, 1986 CanLII 46 (SCC), [1986] 1 S.C.R. 103 S.C.R. 103 (S.C.C.). The broad issue to be decided is whether the exclusion of the pension contribution subsidy from the impacted LTIP employees is a reasonable limit as can be demonstrably justified in a free and democratic society within the meaning of Section 1. In Oakes the court set out two requirements for s.1 to apply. First, the objective the limit is designed to achieve must be pressing and substantial to warrant overriding the constitutionally protected right or freedom. Second, the measures chosen to achieve the objective must be proportional to the objective. See, RJR McDonald Inc. v. Canada (Attorney General) 1995 CanLII 64 (SCC), [1995] 3 S.C.R. 199 (S.C.C.).

80I first turn to the first requirement in Oakes, as it applies to this case. I have concluded above that the impacted LTIP employees are discriminated against on the basis of age by the impugned provisions. Therefore, the question is whether the objective of the limit in the impugned provisions of the collective agreement are pressing and substantial as to justify overriding the right of the impacted older LTIP employees guaranteed constitutionally by the Charter and the Code to be treated equally and without discrimination on the basis of their age.

81In ONA v. Chatham-Kent (Municipality) [2010] 202 L.A.C. (4th) 1, arbitrator Etherington reviewed the subsequent clarification and modification of the Oakes test, in more recent jurisprudence, and at paras 111-114 framed the test in the following terms:

111. Section 1 allows for the limitation of the rights guaranteed under section 15 of the Charter to be upheld where such limitations are found to be “reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society”. The section 1 test originally articulated by the Supreme Court of Canada in R. v. Oakes 1986 CanLII 46 (SCC), [1986] 1S.C.R. 103 (S.C.C.), has been modified somewhat by other Supreme Court decisions in the intervening years. What became known as the Oakes test appeared, in its first iteration, to create an almost lockstep, rigid and scientific enquiry to determine whether government imposed limits on Charter rights should be upheld. However, subsequent decisions have often expressed the need for some flexibility and even deference in cases where government is pursuing a social policy objective regarding the interests of competing groups, the evaluation of complex and conflicting research, the distribution of public resources, or the implementation of solutions that attempt to balance benefits and costs for different parties.

112. The need for flexibility and deference in appropriate cases has been recognized by the Court in numerous decisions, including McKinney, supra, R. v. Videoflicks Ltd. 1986 CanLII 12 (SCC), [1986] 2 S.C.R. 713 (S.C.C.) and the Court’s more recent decision in Hutterian Brethren of Wilson Colony v. Alberta 2009 SCC 37, [2009] S.C.J. No. 37 (S.C.C.). In the latter case the Court stated:

Section 1 of the Charter does not demand that the limit on the right be perfectly calibrated, judged in hindsight, but only that it be “reasonable” and “demonstrably justified”. Where a complex regulatory response to a social problem is challenged, courts will generally take a more deferential posture throughout the s. 1 analysis than they will when the impugned measure is a penal state directly threatening the liberty of the accused […] The bar of constitutionality must not be set so high that responsible creative solutions to difficult problems would be threatened. A degree of deference is therefore appropriate. (At para 37)

113. Similarly in Eldridge v. British Columbia (Attorney General), [1997] 3 (S.C.C.), the Court observed that the application of the Oakes test “requires close attention to the context in which the impugned legislation operates” and that “where the legislation under consideration involves the balancing of competing interests and matters of social policy, the Oakes test should be applied flexibly, and not formally or mechanistically” (at para. 85).

114. The general framework for the section 1 test requires that parties seeking to uphold the legislation prove, on the civil standard of the balance of probabilities, that the challenged provisions satisfy the following tests.

The Ends Test: The objective of the legislation must be pressing and substantial, or at least of sufficient importance to justify overriding a Charter right.

The Means Test: The legislative means chosen to attain the objective must meet three criteria. First, it must be rationally connected to the objective or purpose of the legislation. Second, it must be reasonably considered to minimally impair the right in question. While this second criteria was first stated in Oakes as a very stringent requirement that the means impair the right as little as possible, as part of the recognized need to take a more flexible approach referred to above, in cases involving social policy legislation it became more common to state this criterion as, ‘whether the impugned provision impairs the right no more than is reasonably necessary to attain the governmental objective’. Third, the challenged provision must meet the requirement of proportionality such that it does not result in deleterious effects on the Charter right in question that outweigh the salutary objective and benefits of the legislation.

82The employer submitted that the objective of the impugned provisions was “pressing” and “important”. The employer repeatedly emphasized that the impugned provisions were the product of collective bargaining. The employer and the union had previously freely negotiated article 42.3.1 granting a benefit for all LTIP employees that the employer would pay both shares of the pension contribution. In the 2015 round of collective bargaining the employer was able to convince the union that the government was facing a financial crisis, and that the employer no longer should be required to subsidize the pension contributions for all LTIP employees. Through negotiations a compromise was reached, and the collective agreement was amended by including articles 42.3.2 and 42.3.3. The employer emphasized that collective bargaining is an important social policy. Counsel submitted that I should ask myself why provisions jointly negotiated by the parties should be declared void, when despite the amendment impacted LTIP employees still would receive “large pensions”. It was submitted, “The union agreed to the impugned provisions. Mr. Mously testified that the objective was cost containment. Therefore, deference should be given to the joint agreement reached through collective bargaining”. In support the employer relied on Re Chatham-Kent, (supra) and Re Talos (supra).

83I have already cited authority from the Supreme Court of Canada and concluded that the law does not exempt collective agreements from the requirement of compliance with the Charter or the Code. The authorities relied on by the employer are not inconsistent with that finding. In Chatham-Kent the arbitrator was not called upon to determine whether the first requirement of the Oakes test, (referred to by him as the “Ends Test”) was met. The union agreed that it was met. Thus at para. 115, the arbitrator wrote:

Ends Test

115. In this case there is some dispute between the parties concerning the proper identification of the governmental objective of the impugned legislation. However, the Union ultimately concedes that both the ends test and the rational connection part of the means test have been met by the government and the Employer. Thus the real dispute in the case comes down to whether the Employer and the Intervenor have satisfied the requirements of the last two criteria of the means test. However, some discussion of the governmental objective or purpose is important as the nature and scope of the legislative objective have some bearing on the analysis of both the minimal impairment and proportionality elements of the means test.

At para. 117 he again confirmed:

“The union accepted that the intervenor and Employer had established pressing and substantial governmental objectives …”

His comments about the significance of the fact that the limitations were the product of collective bargaining were made only in relation to the issues he had to decide, that is whether the last two criteria of the means test had been met. In this regard the Tribunal in Re Talos, simply cited the comments in Chatham-Kent with approval. To be clear, neither decision stands for the proposition that a violation of S. 15(1) of the Charter is justified under s. 1, because the violation was a result of collective bargaining. All they stand for is that this fact may be relevant to the last two criteria of the means test, that is the minimum impairment aspect and the proportionality requirement. Before getting to those considerations however, the party seeking to rely on s. 1 must have satisfied the “pressing and substantial objective” test, and in both cases they had done that.

84The employer also relied on Alberta v. Hutterian Brethren of Wilson Colony, 2009 SCC 37, [2009] 2 S.C.R. 567 (S.C.C.). The facts very briefly were that since 1974 Alberta had drivers’ licences which bore the photograph of the holder. Those who objected to having their photograph on their licences on religious grounds were exempted and were issued a special licence with no photograph. In 2003 Alberta adopted a new regulation revoking the religious exemption and making the photo requirement universal. Alberta led evidence that the objective of the regulation was to minimize identity theft associated with drivers’ licences and that the new facial recognition data bank was aimed at reducing the risk of this type of fraud. The majority of the Court held that the regulation was justified under s. 1 of the Charter, finding that the objective of the impugned regulation of maintaining the integrity of the drivers’ licencing system in a way that minimizes the risk of identity theft is clearly a goal of pressing and substantial importance, capable of justifying limits on rights, since the universal photo requirement permits the system to ensure that each licence in the system is connected to a single individual, and that no one has more than one licence. In so finding, at para. 37, the court wrote:

37If the choice the legislature has made is challenged as unconstitutional, it falls to the courts to determine whether the choice falls within a range of reasonable alternatives. Section 1 of the Charter does not demand that the limit on the right be perfectly calibrated, judged in hindsight, but only that it be “reasonable” and “demonstrably justified”. Where a complex regulatory response to a social problem is challenged, courts will generally take a more deferential posture throughout the s. 1 analysis than they will when the impugned measure is a penal statute directly threatening the liberty of the accused. Courts recognize that the issue of identity theft is a social problem that has grown exponentially in terms of cost to the community since photo licences were introduced in Alberta in 1974, as reflected in the government’s attempt to tighten the scheme when it discontinued the religious exemption in 2003. The bar of constitutionality must not be set so high that responsible, creative solutions to difficult problems would be threatened. A degree of deference is therefore appropriate: Edwards Books, at pp. 781-82, per Dickson C.J., and Canada (Attorney General) v. JTI‑Macdonald Corp., 2007 SCC 30, [2007] 2 S.C.R. 610, at para. 43, per McLachlin C.J.

85In the instant case the union argued that the employer has not led evidence to satisfy the initial onus to establish on a balance of probabilities that the objective of the impugned provisions is pressing and substantial or at least of sufficient importance to justify overriding charter rights. I agree. The Oakes test has evolved and has been made more flexible by the Courts in judgements such as Hutterian Brethren of Wilson Colony, (supra) and Eldridge, (supra) in order to permit legislatures to adopt creative solutions to difficult social problems. It is in those circumstances that the Court in Hutterian stated that “A degree of deference is … appropriate”. In Eldridge, the Court stated that flexibility must be allowed where legislation “… involves the balancing of competing interests and matters of social policy”.

86There should be no dispute that collective bargaining is an important social policy. As set out at para 79 (supra) the scrutiny in the first requirement of the Oakes test is focussed on the objective of the limit in the impugned provision. In this case “the Limit” is the exclusion of impacted LTIP employees available to all other LTIP employees. There is no evidence of a pressing or substantial need to revoke the pension contribution subsidy from the impacted employees. There is no evidence whatsoever, and the employer did not suggest, that collective bargaining, generally or between these parties, was threatened in some way if the subsidy of all LTIP employees continues. Similarly there is no evidence that the LTIP program or the pension plan would be in jeopardy without the change. The impugned provisions were not designed to address any problem with collective bargaining and there was no balancing of interests. Nor were they designed to resolve any social problem that existed at the time. As I have found, the sole objective was monetary savings for the employer. This was confirmed by the employer’s own witnesses. To be clear, the employer is perfectly entitled to seek and obtain cost reductions during collective bargaining. However, that must not be done in a manner discriminatory on protected groups, unless it can be justified as a BFOR and undue hardship, or saved through s. 1 of the Charter.

87The employer’s submissions in this regard were also premised on “the importance of upholding provisions of collective agreements freely negotiated by employers and unions”. However, there is no evidence whatsoever that upholding the sanctity and integrity of collective bargaining was any part of the decision to revoke the pension contribution subsidy. At times employer counsel characterized the objective as “maintaining the viability or sustainability of the pension plan as a whole”. However the evidence is absolutely clear that this is a creative way of describing the objective of reducing costs the employer had borne in paying pension contributions on behalf of LTIP employees. The individual who led the employer negotiating team on this issue and drafted the impugned provisions, Mr. Mously, candidly and in detail testified about why it was decided that it should no longer subsidize LTIP employees who had sufficient pension credits (30 years) which entitled them to a reasonable pension income stream upon retirement. It was determined that, given the financial crisis it faced, the employer should reduce its costs resulting from paying both shares of the pension contribution for all LTIP employees. I have no hesitation concluding that the only objective of the impugned provisions was to save costs of the employer. The employer decided to achieve the savings by excluding LTIP employees who were in a position to retire with a sufficient income from the pension contribution subsidy benefit. The only beneficiary from the impugned provisions was the employer, in that its costs associated with subsidizing pension contributions for LTIP employees would have been reduced.

88I have found that the monetary savings that would have resulted were modest. Mr. Mously emphasized this, pointing out that only a small number of LTIP employees would be impacted. There is no evidence that without this saving the pension plan or the LTIP program would be in jeopardy. As the Supreme Court of Canada wrote in B.C. (Superintendent of Motor Vehicles), supra, at para. 41, “… one must be wary of putting too low a value on accommodating the disabled. It is all too easy to cite increased cost as a reason for refusing to accord the disabled equal treatment”. In the instant case, in order to gain some monetary savings, the employer, with the union’s agreement, has sacrificed the constitutionally guaranteed right of the impacted older LTIP employees to be treated equally and to be free from discrimination because of their age. This would be to put “an extremely low value” on the employees’ human rights.

89I therefore find that the employer has not established on a balance of probabilities that the objective the impugned provisions were designed to achieve were not pressing or substantial. The employer has failed to justify the violation of the right of the impacted employees to equal treatment and to be free from discrimination on the grounds of their age. In light of this finding, it is unnecessary for the Board to deal with the remaining steps of the Oakes test.

90The instant policy grievance was dated June 9, 2016. This proceeding commenced on May 25, 2018. The evidence was completed over several days. However, part way through submissions the proceeding came to a halt due to the Covid 19 lockdown. Following some delay, it was completed on January 20, 2020 with the remaining submissions made in writing. It was left for the Board to review the evidence and submissions of the parties and render its decision.

The relevance of Fraser v. Canada (Attorney General) decision of the Supreme Court of Canada.

91During its original submissions, the employer had referred to certain portions of decisions of the Federal Court and the Federal Court of Appeal in Fraser v. Canada (supra) in support of its position. I had proceeded to write the decision based on the evidence and the submissions before me at the time, when on or about October 23, 2020, union counsel wrote to the Board, advising that the Supreme Court of Canada had rendered its judgement in Fraser on October 16, 2020, with the majority of the Court allowing the appeal from the judgements of the lower courts which had held that there had been no violation of S. 15(1) of the Charter. Counsel sought the Board’s permission to make submissions on the implications of the Supreme Court of Canada decision for the issues in the instant policy grievance. The employer did not object, and the Board agreed. Timelines were agreed to between counsel for making submissions in writing. Submissions were filed in writing, the last of which was received on December 18, 2020.

92I have carefully reviewed the court decision as well as the detailed written submissions of the parties on Fraser. The union continued to rely on its original submissions and highlighted observations of the court in Fraser, which in its view supported the legal principles it had relied on and the conclusions it had advocated in this case. The employer similarly relied on the submissions it had made. It acknowledged that reliance was placed by the employer on the lower court decisions in Fraser, which had since been overturned. It was the employer’s position nevertheless that its submissions must prevail that the union has not established a prima facie contravention of S. 15(1) of the Charter, even in light of the Supreme Court of Canada decision in Fraser, now report at, 2020 SCC 28.

93My review of the Fraser decision discloses that it does not overrule or substantially modify any of the legal principles relating to establishing a prima facie violation of S. 15(1). However, it does provide some useful clarity on how those principles should be applied. I will not review the facts in Fraser or how the court applied the relevant principles to the facts in that case. Rather, I will focus on the court’s observations relevant to several aspects of the issues in the instant grievance.

94One would have thought that the test for s. 15(1) of the Charter had been well settled by the jurisprudence which I have reviewed. However, the latest submissions indicate that the parties are not ad idem on that fundamental issue. The employer at the very beginning of its submissions agreed with the test for s. 15(1) set out by the Supreme Court of Canada in Kahkewistahaw First Nation v. Taypotat 2015 SCC 30, [2015] 2 S.C.R. 548 at paras 19-20, that “to prove a prima facie violation of s. 15(1) a claimant must demonstrate that the impugned law or state action:

1. On its face or in its impact, creates a distinction based on enumerated or analogous grounds; and

2. Imposes burdens or denies a benefit in a manner that has the effect of reinforcing, perpetuating, or exacerbating disadvantage.

95The employer then submits that Fraser has not altered this two-part test, and quotes from para. 81 of Fraser, as follows:

In sum, then, the first stage of the s. 15 test is about establishing that the law imposes differential treatment based on protected grounds, either explicitly or through adverse impact. At the second stage, the Court asks whether it has the effect of reinforcing, perpetuating, or exacerbating disadvantage.

96Both parties are therefore in general agreement on what the test is. However, having acknowledged the two-step test, the employer continued to argue that the union has failed to meet step one of the test because the evidence is that the impugned provisions are triggered not by an LTIP employee’s age, but by his/her pension credit status. It wrote:

What the Union has not been able to accept is that there is no distinction being made in the “Program” between “younger” LTIP recipients and “older” LTIP recipients. Under Article 42.3, LTIP beneficiaries are impacted by its operation if and only if they have the requisite pension credit (and thus already have a large pension). “Old” recipients without the requisite pension credit are not impacted.

97With respect, this submission continues to ignore that the union is able to satisfy step one of the test in one of two ways. By establishing that the distinction is created (1) on the face of the impugned provision or (2) in its effect. The impugned provision does not on its face draw any distinction based on age. The employer is correct in that regard, and the union did not assert otherwise. The union alleged throughout only that a distinction based on age is created in the effect, or as a result of, application of the article. In other words, the provision is non-discriminatory on its face, but the requirement of 30 years of pension credits that triggers the article acts as a proxy for “age”. It is on that basis the Board concluded that the union had met step one of the test for s. 15(1).

98The decision in Fraser reiterates and emphasizes that s. 15(1) may be violated by provisions which appear neutral and non-discriminatory, but have a discriminatory effect when applied. In Fraser at para. 28 Abella J acknowledged that “Ms. Fraser does not suggest that the negative pension consequences of job sharing are explicitly based on sex. Rather, she claims that they have an adverse impact on women with children”. At paragraphs 50-53 the Court observed:

50To prove discrimination under s. 15(1), claimants must show that a law or policy creates a distinction based on a protected ground, and that the law perpetuates, reinforces or exacerbates disadvantage. These requirements do not require revision in adverse effects cases. What is needed, however, is a clear account of how to identify adverse effects discrimination, because the impugned law will not, on its face, include any distinctions based on prohibited grounds (Withler, at para. 64). Any such distinctions must be discerned by examining the impact of the law (Alliance, at para. 25).

51This inquiry has frequently been described as a search for a “disproportionate” impact on members of protected groups (see Vriend, at para. 82; Withler, at para. 64; Taypotat, at paras. 21‑23; Action Travail, at p. 1139; Egan v. Canada, 1995 CanLII 98 (SCC), [1995] 2 S.C.R. 513, at para. 138, per Cory and Iacobucci JJ. dissenting; Moreau (2010), at p. 154; Braun, at pp. 124‑25; Vizkelety, at p. 176; Watson Hamilton and Koshan (2015), at p. 196; Collins and Khaitan, at pp. 3‑4; Dianne Pothier, “M’Aider, Mayday: Section 15 of the Charter in Distress” (1996), 6 N.J.C.L. 295 at p. 322).

52In other words, in order for a law to create a distinction based on prohibited grounds through its effects, it must have a disproportionate impact on members of a protected group. If so, the first stage of the s. 15 test will be met. (emphasis added).

53How does this work in practice? Instead of asking whether a law explicitly targets a protected group for differential treatment, a court must explore whether it does so indirectly through its impact on members of that group (see Eldridge, at paras. 60‑62; Vriend, at para. 82). A law, for example, may include seemingly neutral rules, restrictions or criteria that operate in practice as “built‑in headwinds” for members of protected groups. The testing requirement in Griggs is the paradigmatic example; other examples include the aerobic fitness requirement in Meiorin, and the policy requiring employees to work on Saturdays in Simpsons‑Sears (see also Central Alberta Dairy Pool v. Alberta (Human Rights Commission), 1990 CanLII 76 (SCC), [1990] 2 S.C.R. 489). To assess the adverse impact of these policies, courts looked beyond the facially neutral criteria on which they were based, and examined whether they had the effect of placing members of protected groups at a disadvantage (Moreau (2018), at p. 125).

99The employer also relied on the Court’s statement in para.52 that the provisions “must have a disproportionate impact on members of a protected group” in order to meet step one of the test. The evidence that only about 200 LTIP employees out of a much larger pool of LTIP recipients would be impacted was relied on to argue that this requirement is not met. With respect, again this misconstrues the test. The prohibited ground relied upon by the union is “age”. The “protected group” in this case is not the pool of all LTIP recipients. It is the group of older LTIP recipients who had earned 30 years of pension credit. As set out in the award in detail, the union’s evidence is uncontradicted and unchallenged that every impacted employee would be at least 54 years old. Eligibility for LTIP s not based on age. Employees of any age would qualify for LTIP if the requirements relating to total disability are met. The evidence is again uncontradicted and unchallenged that no employee would be able to accumulate 30 years of pension credit prior to age 54. In other words, no LTIP employee under age 54 would be impacted adversely by the impugned provision. Conversely, every employee impacted would be between 54 and 65 years. Therefore, the evidence clearly demonstrates that as a result of the impugned provisions members of a protected group, older LTIP employees, would be disproportionately impacted.

100The employer referred again to its submission that the distinction was not based on age, and relied on the scenarios where one LTIP employee aged 60 years may be impacted by article 43.3.2, while another of the same age would not be impacted because he/she did not have 30 years of pension credit. I have rejected this argument and concluded that to be discriminatory the union need not prove that all members of the protected group – older LTIP employees – are adversely impacted. At paragraphs 72-73 of Fraser, the court reiterates this principle. Citing Brooks (supra) at p. 1248, Abella J. at para 72 stated the principle with even greater clarity: “… claimants need not show that the criteria, characteristics or other factors used in the impugned law affect all members of a protected group in the same way. This court has long held that the fact that discrimination is only partial does not convert it into non-discrimination”.

101Employer counsel also repeated his argument that there was no age discrimination because impacted LTIP employees have three options to choose from based on their own personal and financial needs. I have rejected that argument. The fallacy of that argument is directly addressed in Fraser. At paragraphs 86 and 87, the court wrote:

86In relying on Ms. Fraser’s “choice” to job‑share as grounds for dismissing her claim, the Federal Court and Court of Appeal, with respect, misapprehended our s.15(1) jurisprudence. This Court has consistently held that differential treatment can be discriminatory even if it is based on choices made by the affected individual or group.

87In Brooks, for example, Dickson C.J. rejected an employer’s argument that providing unequal benefits to pregnant women is not sex discrimination because pregnancy is “voluntary” (pp. 1237‑38). After Brooks, the Court “repeatedly rejected arguments that choice protects a distinction from a finding of discrimination” (Quebec v. A, at para. 336). In Lavoie v. Canada, 2002 SCC 23, [2002] 1 S.C.R. 769, for example, the Court held that a statute which gave preferential treatment to Canadian citizens infringed s.15(1), despite the government’s argument that becoming a Canadian citizen was a choice. Chief Justice McLachlin and Justice L’Heureux‑Dubé, concurring on this issue, made clear that,

The fact that a person could avoid discrimination by modifying his or her behaviour does not negate the discriminatory effect. If it were otherwise, an employer who denied women employment in his factory on the ground that he did not wish to establish female changing facilities could contend that the real cause of the discriminatory effect is the woman’s “choice” not to use men’s changing facilities. The very act of forcing some people to make such a choice violates human dignity, and is therefore inherently discriminatory. The law of discrimination thus far has not required applicants to demonstrate that they could not have avoided the discriminatory effect in order to establish a denial of equality under s. 15(1). The Court in Andrews was not deterred by such considerations. On the contrary, La Forest J. specifically noted that acquiring Canadian citizenship could in some cases entail the “serious hardship” of losing an existing citizenship. He left no doubt that this hardship was a cost to be considered in favour of the individual affected by the discrimination. [Emphasis added; citation omitted; para. 5.]

102Thus, the law is that the discriminatory effect is not negated even if the claimant could have avoided discrimination by “Modifying his or her behaviour”. As I have found, in the instant case, impacted LTIP did not even have any way to avoid discriminatory effect no matter which of the three options he/she chooses. Once the provision is triggered by the employee reaching the 30-year pension credit threshold, one of the options must be picked. The impacted employee has no option to opt out of article 42.3.2 altogether. As I found the evidence is indisputable that no matter which of the three options is chosen there are disadvantages, which other LTIP employees who do not have 30 years pension credit do not have to face.

103This leads to the position the employer advanced that impacted LTIP still are ensured a “large” income of 60 percent of the pension, and get access to a package of post-retiree benefits. Therefore the employer had been reasonable and had not treated them arbitrarily. As I have concluded these are not proper considerations in determining whether a provision has discriminatory effect. In Brooks (supra) the Supreme Court of Canada set aside the Court of Appeal decision, and concluded that the employer’s accident and sickness plan discriminated on the basis of sex, and restored the initial decision of the adjudicator, despite acknowledging at para. 12 that the adjudicator had concluded that Safeway’s plan was “by all accounts a generous one”. Dickson CJ concluded nevertheless that the plan discriminated against pregnant employees.

104Also, as the Court in Fraser at para. 80 wrote, “… there is no burden on a claimant to prove that the distinction is arbitrary to prove a prima facie breach of s. 15(1)”, although an employer relying on s. 1 of the Charter to justify discrimination has the onus to prove that the provision is not arbitrary. The employer’s position has been that the impugned provisions are reasonable. The suggestion is that the impacted LTIP employees still get a “good deal” compared to active employees who have to pay their own share of the pension contribution without exception. This again, if accepted as true, is an irrelevant consideration. The employer and the union had extended a benefit specifically to all LTIP recipients. While all other employees are required to pay their own share of the pension contribution, the employer undertook to pay both shares for LTIP employees. It is common sense, and I take judicial notice, that this is a recognition that LTIP employees are a disadvantaged group. They are totally disabled and unable to earn their regular wages. Their income is reduced to the LTIP payment which is only 66 2/3% of salary. Besides the financial disadvantage, total disability – whether physical or mental – could result in varying negative consequences relating to social and family obligations and relationships. As the Supreme Court of Canada held in Brooks (supra), once a benefit is extended to a group, to carve out a sub-set of that group from the benefit on the basis of age is unlawful discrimination.

105The employer submitted that “contrary to the union’s apparent assertions, human rights law does not prohibit cost containment measures in bargained collective agreement”. I agree that there is no such broad prohibition under the Charter or the Code. However, cost containment measures like the impugned provisions which have a disproportionate negative effect on the basis of a prohibited ground are definitely prohibited. I have concluded that such effects are visited on older LTIP employees by the impugned provisions, and therefore they constitute discrimination on the basis of age.

106Throughout the submissions, the employer kept returning to the assertion that LTIP employees are sorted for exclusion not because of their age, but because of their pension credit status. In its original written submission, the employer stated:

“While it is true that a LTIP beneficiary who does trigger the bargained provision would tend to be “older” because they have to have, at a minimum, 30 years of PC, they are clearly not “triggering” the Article because of age.”

It was illustrated that even a 60 or 65 year old LTIP employee would not be impacted, if he/she did not have the required years of pension credit.

107As I found, this ignores the fundamental distinction between direct and adverse effect discrimination. In Fraser at para. 70, Abella J clearly addresses this as follows:

70Second, if claimants successfully demonstrate that a law has a disproportionate impact on members of a protected group, they need not independently prove that the protected characteristic “caused” the disproportionate impact Put differently, there was no need for the claimant in Griggs to address whether his exclusion was based on his race or lack of a high school education. The whole point of the adverse impact analysis was to show that the use of a high school education as a criteria for employment had a disproportionate impact on African Americans. (Authorities and citations omitted; emphasis added)

In this case the use of 30 years of pension credit as criteria would have a disproportionate adverse impact on older LTIP employees.

108The parties also made submissions on Fraser in relation to s. 1 of the Charter. The issue is whether the employer has proven that the objective of the limitation in the impugned provisions, that is the exclusion of the impacted LTIP employees from the benefit available to LTIP employees, was pressing and substantial.

109In Quebec (Attorney General v. Alliance, 2018 SCC 17, [2018] 1 S.C.R. 464 the court observed:

Where a court finds that a specific legislative provision infringes a Charter right, the state’s burden is to justify that limitation, not the whole legislative scheme. Thus, the “objective relevant to the s. 1 analysis is the objective of the infringing measure, since it is the infringing measure and nothing else which is sought to be justified” (RJR-MacDonald Inc. v. Canada (Attorney General), 1995 CanLII 64 (SCC), [1995] 3 S.C.R. 199, at para. 144; R. v. K.R.J., 2016 SCC 31, [2016] 1 S.C.R. 906, at para. 62).

[Emphasis in original; para 45]

The employer set out the objective of the impugned provisions as follows, under the title “Pressing & Substantial Objective”:

The objective of Article 42.3 was to ensure sustainability in both the pension plan and the LTIP benefit plan, through cost containment. Through the legitimate exercise of collective bargaining, the Parties ultimately ensured that LTIP beneficiaries would continue to be relieved from any of the true costs of their own pensions unless and until they had large pensions. On the other hand, those who met the threshold, would contribute to their pension and support funding to the plan.

I have noted that at times employer counsel previously had set out the objective to be “maintaining the viability or sustainability of the pension plan as a whole”.

110I do not find anything in Fraser that would cause me to reconsider the conclusion I have made on the basis of pre-Fraser jurisprudence, that the employer has not proved that the carving out of a sub-set of older LTIP recipients from the benefit all LTIP recipients had been accorded was a pressing and substantial objective. No matter how it is characterized, the evidence, including the evidence of the architect of the limitation Mr. Mously, is clear that the sole purpose of the limitation, i.e. the exclusion of the impacted LTIP employees, was to reduce the employer’s costs resulting from the requirement in the collective agreement that the employer pay both shares of the pension contribution for LTIP employees. The employer’s own evidence was that the savings resulting from denying some 200 older LTIP employees equal Charter rights would be modest. There was no evidence of any dollar amounts that would be saved, and no witness testimony or documentary/statistical evidence was presented to support the assertion that the pension plan or LTIP program would be in jeopardy without those savings. The impressionistic evidence that the employer was generally facing a financial crisis and needed to find savings from the costs of the collective agreement does not even come close to establishing a pressing or substantial objective of the limitation within the meaning of s. 1 of the Charter. Since the prima facie breach cannot be justified under s. 1, the limitation placed on the impacted older LTIP employees remains a violation of s. 15(1) of the Charter.

[111] As noted at paragraph 2 supra, the parties agreed that the Board determine the constitutionality of the impugned provisions and remain seized with remedy. In light of the findings above, the Board declares that the impugned provisions violate s. 15(1) Charter rights of the impacted LTIP employees, as well as rights under s. 5(1) of the Code. The impugned provisions are struck from the collective agreement.

112Since the impugned provisions have not been implemented, it is not apparent what other remedy may flow beyond the above declaration. However, in view of the joint request of the parties, the Board remains seized in that regard.

Privacy Rights

113In addition to the allegation that s. 15(1) of the Charter and s. 5 (1) of the Code are contravened by articles. 42.3.2 and 4.3.3, the union made secondary submissions that article 42.3.2(a) also should be struck from the collective agreement as violative of the privacy rights of employees who are “receiving or deemed eligible to receive LTIP benefits or who are making application for LTIP benefits” on or before the dates specified. The union asserted that the requirement to disclose that information is imposed only on employees receiving or applying for LTIP. Active employees are not subject to this requirement. The union asserted that this was an additional adverse impact based on age and/or disability which should cause the Board to strike that provision from the collective agreement.

114While both parties made extensive submissions on this issue, I am of the view that it is not necessary for the Board to determine this important issue about the extent of the constitutional protection afforded to the right to privacy.

115The only justification and need the employer offered for including articles 42.3.2(a) and 42.3.3(a) was that this information was necessary in order to apply and enforce articles 42.3.2(b) and 42.3.3(b). It was asserted that without that information it was not possible to identify when employees meet the criteria for triggering the impugned provisions, requiring them to start paying their own share of the pension contribution. However, the Board has concluded that articles 42.3.2(b) and 42.3.3(b) are discriminatory and ought to be struck. Articles 42.3.2 (a) and 42.3.3 (a) are directly linked to the discriminatory provisions and therefore are equally tainted. They are designed to implement and enforce discriminatory provisions the Board had struck from the collective agreement. Therefore there is no justification for those provisions to continue as part of the collective agreement and should also be struck.

116To sum up, the instant policy grievance is upheld. The Board declares that articles 42.3.2 and 42.3.3 and corresponding articles 70.3.2 and 70.3.3 violate s. 15(1) of the Charter and s. 5(1) of the Code. Those provisions are struck from

the collective agreement. As jointly requested by the parties, the Board remains seized in the event it is called upon to determine any remedial issues.