Canadian Union of Public Employees, Local 2816 v. The Hospital for Sick Children, 1994 CanLII 9926

[1994] OLRB Rep. September 1255

0569-94-U Canadian Union of Public Employees, Local 2816, Applicant v. The Hospital for Sick Children, Responding Party

BEFORE: Laura Trachuk, Vice-Chair, and Board Members W. H. Wightman and E. G. Theobald.

APPEARANCES: M. Wright, L. Morris, S. Eadie, C. McQuarrie, M. Roman, D. Abuan, J. Villen­ueva for the applicant; R. Budd and C. Hoover for the responding party.

DECISION OF THE BOARD September 13, 1994

1. This is an application under section 91 of the Labour Relations Act alleging that the responding party (sometimes referred to in this decision as the "hospital") has violated sections 65, 67, and 81 of the Act by instituting a new benefits plan for its non-unionized employees and raising the long term disability premiums for the applicant's members.

2. The collective agreement between the parties expired in September 1993. The applicant (sometimes referred to in this decision as the "union") gave notice to bargain on July 12, 1993. The parties are in the "freeze" period described in section 81(1) of the Labour Relations Act and sec­tion 13 of the Hospital Labour Disputes Arbitration Act (HLDAA). In April, 1994 the hospital implemented a new benefits scheme for its non-unionized staff. One of the results of this new scheme was that the non-unionized staff and the union's members were placed into two different groups for the purposes of the long term disability (L.T.D.) plan. The effect of this division into two groups was that the premium that the applicant's members are required to pay for L.T.D. was increased. The union claims that the hospital's action discriminates against its members contrary to sections 65 and 67 and also that that it is a violation of the statutory "freeze" contemplated by sec­tion 81.

3. The relevant sections of the Act provide as follows:

65.No employer or employers' organization and no person acting on behalf of an employer or an employers' organization shall participate in or interfere with the formation, selection or adminis­tration of a trade union or the representation of employees by a trade union or contribute finan­cial or other support to a trade union, but nothing in this section shall be deemed to deprive an employer of the employer's freedom to express views so long as the employer does not use coer­cion, intimidation, threats, promises or undue influence.

67.No employer, employers' organization or person acting on behalf of an employer or an employers' organization,

(a) shall refuse. to employ or to continue to employ a person, or discriminate against a person in regard to employment or any term or condition of employment because the person was or is a member of a trade union or was or is exercising any other rights under this Act;

(b) shall impose any condition in a contract of employment or propose the imposition of any condition in a contract of employment that seeks to restrain an employee or a person seeking employment from becoming a member of a trade union or exercising any other rights under this Act; or

(c) shall seek by threat of dismissal, or by any other kind of threat, or by the imposition of a pecuniary or other penalty, or by any other means to com­pel an employee to become or refrain from becoming or to continue to be or to cease to be a member or officer or representative of a trade union or to cease to exercise any other rights under this Act.

81.-(1) Where notice has been given under section 14 or section 54 and no collective agreement is in operation, no employer shall, except with the consent of the trade union, alter the rates of wages or any other term or condition of employment or any right, privilege or duty, of the employer, the trade union or the employees, and no trade union shall, except with the consent of the employer, alter any term or condition of employment or any right, privilege or duty of the employer, the trade union or the employees,

(a) until the Minister has appointed a conciliation officer or a mediator under this Act, and,

(i) seven days have elapsed after the Minister has released to the parties the report of a conciliation board or mediator, or

(ii) fourteen days have elapsed after the Minister has released to the parties a notice that he or she does not consider it advisable to appoint a conciliation board,

as the case may be; or

(b) until the right of the trade union to represent the employees has been terminated.

whichever occurs first.

4. Although neither party mentioned the Hospital Labour Disputes Arbitration Act we understand that it also applies in this situation. The relevant sections of that Act provide as fol­lows:

l.-(1) In this Act,

(a) "hospital" means any hospital, sanitarium, sanatorium, nursing home or other institution operated for the observation, care or treatment of persons afflicted with or suffering from any physical or mental illness, disease or injury or for the observation, care or treatment of convalescent or chroni­cally ill persons, whether or not it is granted aid out of moneys appropri­ated by the Legislature and whether or not it is operated for private gain, and includes a home for the aged;

(b) "hospital employee" means a person employed in the operation of a hospi­tal;

(c) "Minister" means the Minister of Labour;

(d) "party" means the trade union that is the bargaining agent for a bargaining unit of hospital employees, on the one hand, or the employers of such employees, on the other hand, and "parties" means the two of them.

(2) Unless the contrary intention appears, expressions used in this Act have the same meaning as in the Labour Relations Act.

(3) A laundry that is operated exclusively for one or more than one hospital shall be deemed to be a hospital for the purposes of this Act.

(4) A stationary power plant as defined in the Operating Engineers Act that is operated princi­pally for one or more than one hospital shall be deemed to be a hospital for the purposes of this Act.

2.-(1) This Act applies to any hospital employees to whom the Labour Relations Act applies, to the trade unions and councils of trade unions that act or purport to act for or on behalf of any such employees, and to the employers of such employees.

(2) Except as modified by this Act, the Labour Relations Act applies to any hospital employees to whom this Act applies, to the trade unions and councils of trade unions that act or purport to act for or on behalf of any such employees, and to the employers of such employees.

13. Despite subsection 81(1) of the Labour Relations Act, where notice has been given under section 14 or 54 of that Act by or to a trade union that is the bargaining agent for a bargaining unit of hospital employees to which this Act applies to or by the employer of such employees and no collective agreement is in operation, no such employer shall, except with the consent of the trade union, alter the rates of wages or any other term or condition of employment or any right, privilege or duty of the employer, the trade union or the employees, and no such trade union shall, except with the consent of the employer, alter any term or condition of employment or any right, privilege or duty of the employer, the trade union or the employees, until the right of the trade union to represent the employees has been terminated.

Facts

5. There is little dispute between the parties with respect to the relevant facts in this matter. The hospital employs approximately 3,500 people, 500 of whom are represented by the appli­cant. Aside from a bargaining unit of security guards, most of the remaining 3,000 staff are non-unionized. The union has represented the bargaining unit since 1985. The bargaining unit is described in the collective agreement as follows:

all employees of The Hospital for Sick Children in the Municipality of Metropolitan Toronto, save and except professional medical staff, Graduate and Undergraduate Nurses, Graduate and Undergraduate Pharmacists, Graduate Dietitians, Dietetic Interns, Social Workers, Child Care Workers, Play Park Attendants, Recreationists, persons engaged in research work, technical personnel, Supervisors, persons above the rank of supervisor, Foremen, persons above the rank of Foreman, Chief Engineer, Office and Clerical Staff, Security Guards, persons regularly employed for not more than 24 hours per week, and students employed during the school vaca­tion.

6. These parties have engaged in central hospital sector negotiations for the last three col­lective agreements and have signed an agreement to participate in the next round. (C.U.P.E. locals and the hospitals with which they have collective agreements choose prior to the negotiation of each contract whether they wish to opt into central bargaining. If both parties with to participate a memorandum agreeing to be bound by the results of central bargaining is signed.)

7. Certain issues, including benefits, are negotiated centrally, others, usually those of local significance, are negotiated locally. Traditionally the central agreement is ultimately settled through interest arbitration. The last interest award was released in March 1993. It dictated the terms of the collective agreement which expired in September 1993. The parties have not yet exchanged their initial bargaining proposals for the next collective agreement.

8. The sections of the last central agreement which relate to insured benefits provide as follows:

13.01 - Sick Leave

(g) All employees shall participate in the Hospital for Sick Children Long Term Disability Plan after twelve (12) months from date of hire providing for sixty percent (60%) disability income on the first $36,000.00 per year of salary and fifty percent (50%) of salary in excess of $36,000.00 per year. Coverage shall be subject to the terms and conditions of the Plan which does not form part of the Collective Agreement nor which is subject to the grievance procedure and arbitration. The employee shall pay the full cost of the monthly premium in effect from time to time through monthly pay­roll deduction.

18.01 - Insured Benefits

The Hospital agrees, during the term of the Collective Agreement, to con­tribute towards the premium coverage of participating eligible employees in the active employ of the Hospital under the insurance plans set out below subject to their respective terms and conditions including any enrollment requirements:

(a) The Hospital agrees to pay 100% of the billed premium towards coverage of eligible employees in the active employ of the Hospital under the Blue Cross Semi-Private Plan or comparable coverage with another carrier.

(b) The Hospital agrees to contribute 75% of the billed premium towards cov­erage of eligible employees in the active employ of the Hospital under the existing Blue Cross Extended Health Care Benefits Plan (as amended below) or comparable coverage with another carrier providing for $15.00 (single) and $25.00 (family) deductible, providing the balance of monthly premiums is paid by the employee through payroll deductions. Vision care maximum $90.00 every 24 months and hearing aide allowance $500.00 life­time maximum.

(c) The Hospital agrees to contribute 100% of the billed premium towards cov­erage of eligible employees in the active employ of the Hospital under HOOGLIP or such other group life insurance plan currently in effect pro­viding the balance of the monthly premium is paid by the employee through payroll deductions.

(d) The Hospital agrees to contribute 75% of the billed premiums towards cov­erage of eligible employees in the active employ of the Hospital under the Blue Cross #9 Dental Plan or comparable coverage with another carrier (based on the current ODA fee schedule as it may be updated from time to time) providing the balance of the monthly premiums are paid by the employee through payroll deduction.

(e) The Hospital will provide equivalent coverage to all employees who retire early and have not yet reached age 65 and who are in receipt of the Hospi­tal's pension plan benefits on the same basis as is provided to active employees for semi-private, extended health care and dental benefits. The Hospital will contribute the same portion towards the billed premiums of these benefits plans as is currently contributed by the Hospital to the billed premiums of active employees.

The early-retired employee's share towards the billed premium of the insured benefit plans will be deducted from his or her monthly pension cheque.

(f) A copy of all current master policies of the benefits referred to in this Arti­cle shall be provided to the Union.

(g) The Hospital agrees to make available on an optional basis coverage of eli­gible employees in the active employee of the Hospital under the existing Accidental Death Plan with Citadel Insurance or comparable coverage with another carrier: the total premiums for which would be paid by employees through payroll deduction.

18.02 Change of Carrier

It is understood that the Hospital may at any time substitute another carrier for any plan (other than OHIP) provided the benefits conferred thereby are not in total decreased. Before making such a substitution, the Hospital shall notify the Union to explain the proposed change and to ascertain the views of the employees. Upon a request by the Union, the Hospital shall provide to the Union, full specifications of the benefit programs contracted for and in effect for employees covered herein.

9. Prior to 1990 the hospital self-insured its L.T.D. plan. In 1991 it began using Canada Life as its insurer. At the same time it considered instituting a "flex" benefit plan for its employees which would permit them to opt out of benefits. The hospital rejected the idea at the time because it did not have the administrative capability to support it.

10. In early 1993, the hospital gave Mr. Chris Hoover, its Pensions and Benefits Manager at the time, a mandate to save the hospital $1,000,000.00 through the non-union benefit plan. In con­sultation with the hospital's consulting firm, Mr. Hoover devised the Core Plus Plan which was presented to the hospital in September 1993. The hospital decided to implement the proposal and a series of focus groups with non-unionized employees were held to discuss what changes they would like to see to the benefit package.

11. Canada Life was initially invited to quote on the plan and when its response was unac­ceptably high, other insurance companies were requested to submit quotes. The hospital received 10 quotes. Interviews were then conducted with a short list and then second interviews were held with an even shorter list. Ultimately in January, 1994, Metropolitan Life was chosen as the new insurer. Mr. Hoover testified that this choice was made on the basis of a number of criteria includ­ing the net cost of the Metropolitan Life plan versus the net cost of other insurer's proposals.

12. The Core Plus Plan provides a basic level of benefits which employees may upgrade to suit their particular needs. With each extra benefit the cost to the employee (and the hospital except for L.T.D.) increases. The Core Plus Plan was not offered to the union's members because, the hospital claimed, it must provide them with the benefits stipulated in the collective agreement on the terms contained in the collective agreement. However, it was acknowledged throughout the process that one of the effects of implementing the Core Plus Plan would be that the insurer would separate the union and non-union groups for the purpose of the L.T.D. plan and that this might affect the premium rates for the groups. Persons enrolled in a benefits plan share a group with those who have the same benefits and who pay the same percentage of the premiums. Thus, union and non-union employees were already in separate groups for the purposes of the extended health care plan (Article 18.01(b)) because the unionized employees had superior hearing aid and vision benefits. They were also already in separate groups for the purposes of the dental plan (Article 18.01(d)) because the hospital and the unionized employees had a 75/25 cost sharing arrangement whereas the non-unionized employees and the hospital had a 50/50 one.

13. Canada Life's contracts with the hospital generally expired and were renewed each April 15. The L.T.D. premiums had increased every year since 1991 as follows:

Jan. 1, 1991, 0.5% April 1, 1991, 1.0% April 1, 1992, 1.5% July, 1993, 1.65% May 1, 1994, 2.65%

14. The financial position of the benefit plans were reviewed by the hospital and the insurer every autumn. In September, 1993 Canada Life indicated to the hospital that the L.T.D. plan was in a deficit position and that a significant increase in premiums would be required. Although all of the employees were included in one L.T.D. group under Canada Life, it conducted (for reasons the hospital's witness could not provide) a separate financial analysis of the plan's position with respect to the unionized employees. The analysis indicated that the L.T.D. claims experience for the unionized employees was "very unfavourable" and warranted a premium increase to 3.23% of earnings if the Core Plan were implemented although it proposed setting the rate at 2.65%. If the Core Plus Plan was not implemented and all of the employees remained in the same L.T.D. group the premium would be increased to 2.3% of earnings. These rates would be subject to potential reduction through negotiation with the hospital.

15. When the hospital requested quotes from the other insurers it did not provide them with separate data for the union's members. As a result, the insurers provided the hospital with quotes for the L.T.D. premium based on a rate which reflected the experience of the employee group as a whole. A number of the insurers provided quotes for a premium rate for the unionized L.T.D. group which was significantly lower than the 1993/1994 rate from Canada Life. The rate quoted by Metropolitan Life was 1.84% and although one of the highest, it was still lower than the 1993/1994 Canada Life rate. However, after the hospital had engaged Metropolitan Life it negoti­ated the final rates and the rate for the union group was set at 2.65%. Mr. Hoover testified that the rate originally quoted by Metropolitan Life after reviewing the unionized group's claims experi­ence was 3.23% of earnings but that he negotiated it down to 2.65%. The unionized employees were informed of this premium increase and the change of carrier in April, 1994.

16. The premium that the union's members are now required to pay for L.T.D. is 1% higher than it was last year. This translates to between $260.00 and $300.00 per year for most mem­bers or between $130,000.00 to $150,000.00 per year for the whole group. There is no dispute that this increase would have been smaller if the union's members had not been placed in a separate L.T.D. group from the rest of the employees. If non-union employees choose the same level of L.T.D. coverage under the Core Plus Plan their premiums are less than those of the unionized employees.

17. When the local president inquired as to the reason for the premium increase he was advised that it was the "result of the number of claims and bad experience with employees who are covered by the CUPE agreement." He was also advised that "if the experience remains the same or is worse the rate will have to be increased again May 1, 1995".

18. As a result of the increase, the union's members are demanding that it make L.T.D. premiums an issue in bargaining. The union must therefore attempt to have the issue included in the proposals at central bargaining or get an agreement that it can be negotiated locally.

Argument

19. The hospital argued that it had not violated the statutory freeze or discriminated against unionized employees because the benefit package it provided to CUPE members had not changed and it continued to provide the benefits stipulated by the collective agreement. Furthermore, the premiums for L.T.D. and the costs of the other benefit plans have regularly gone up each year and therefore a rate increase was within the reasonable expectations of the employees. It noted that it had considered introducing a flex plan as early as 1991. It argued that the process undertaken by the hospital in implementing the Core Plus Plan indicated that it was motivated by legitimate busi­ness, not anti-union, concerns.

20. It was also asserted that it was the insurer's not the hospital's decision to separate the unionized and non-unionized employees into two groups for the purposes of the L.T.D. plan. The insurer would make that alteration whenever either the level of benefits or the contribution alloca­tion of part of the group changed. The hospital noted that the same result would have occurred if an interest arbitrator ever dictated an employer contribution to the L.T.D. premium or a different level of benefits. Furthermore, the insurer sets the premium rate based on the experience rating of the groups which is not a factor within the hospital's control.

21. The hospital argued in conclusion that all of its actions with respect to this matter are permitted by the Act and it asked the Board to dismiss the application. The Board was referred to the following decisions: Oshawa General Hospital, [1985] OLRB Rep. Jan. 98; Mohawk Hospital Services Inc., [1993] OLRB Rep. Sept. 873; International Wallcoverings, [1983] OLRB Rep. Aug. 1316 and Inco Limited, [1984] OLRB Rep. Nov. 1584.

22. The union argued that the large increase in its members L.T.D. premiums was caused by the hospital's decision to implement the Core Plus Plan which resulted in the employees being split into two groups for the purpose of the L.T.D. plan. The union claimed that this combination of cause and effect was a violation of the freeze. It was the union's position that a premium increase even at this size would not be a violation if it had been caused by "business as before", t.e., by a rate increase by Canada Life for the group as a whole. The union argued however that in

these circumstances the size of the increase coupled with the reason for it was not within the rea­sonable expectations of the employees.

23. The union also argued that the hospital knew it was considering a flexible benefits plan prior to agreeing to central negotiations. In the union's view it should have been notified of the potential change in the non-bargaining unit benefit package. It also claimed that the hospital should have declined to participate in central negotiations so that it could negotiate a new benefit package with the union locally. It was argued that the hospital's actions have altered the "stable point of departure for collective bargaining" that section 81(1) was designed to protect.

24. The union also claimed that the hospital's actions discriminated against its members because the implementation of the Core Plus Plan was costing its members money while both the hospital and the non-union employees were saving money. It argued further that the increased benefits paid by its members were subsidizing the other benefit plans and that Metropolitan Life could afford to give the hospital a good rate on the other plans because of the extra premiums that it was getting from the bargaining unit members. The union claimed that the message to the bar­gaining unit members is that they are the hospital's lowest priority. It requested that the hospital be ordered to compensate its members for the difference in premiums between what Metropolitan Life was charging and the lowest rate for the whole group quoted to the Hospital or, in the alterna­tive, the rate Canada Life would have charged for the whole group. We were referred to the fol­lowing decisions: The Brick Warehouse, [1992] OLRB Rep. Oct. 1118; George St.jH L.jH Mc Call Chronic Care Wing of the Queensway General Hospital, [1991] OLRB Rep. May 619; Forintek Canada Corp., [1986] OLRB Rep. April 453; Sunnycrest Nursing Homes Limited, [1982] OLRB Rep. Feb. 261; Umfreville District School Area Board, [1987] OLRB Rep. March 434; The Cambridge Reporter, [1993] OLRB Rep. Oct. 1035.

25. In reply, the hospital argued that if the union's position was accepted it could not change the benefit plans it offered to non-unionized employees and that is beyond the Board's jurisdiction. The hospital denied that the premiums paid by the unionized employees are subsidiz­ing the other plans and asserted that the plans are self funding and that premiums are set on the basis of experience ratings.

Decision

26. As noted above, we understand the parties in this matter to be governed by the Hospital Labour Disputes Arbitration Act. Section 13 of that Act is identical to section 81(1) of the Labour Relations Act except that employers are prevented from altering the rates of wages or any other term or condition of employment or any right, privilege or duty of the employer, the trade union or the employees, until the right of the trade union to represent the employees has been termi­nated. As a result of the overlap in the provisions in the two Acts, the Board's approach to alleged breaches of section 13 of HLDAA is the same as its approach under section 81(1).

27. Over time the Board has developed a number of approaches to assist it in interpreting section 81(1) of the Labour Relations Act or section 13 of HLDAA when there is uncertainty as to what the "rates of wages or any other term or condition of employment or any right, privilege or duty of duty of the employer, trade union or employees" are in a particular situation (Royalguard Vinyl Co., [1994] OLRB Rep. Jan. 59). The "business as before" approach was described in Spar Aerospace Products Limited, [1978] OLRB Rep. Sept. 859 at paragraph 23:

28. The "business as before" approach does not mean that an employer cannot continue to man­age its operation. What it does mean is simply that an employer must continue to run the opera­tion according to the pattern established before the circumstances giving rise to the freeze have occurred, providing a clearly identifiable point of departure for bargaining and eliminating the chilling effect that a withdrawal of expected benefits would have upon the representation of the employees by a trade union. The right to manage is maintained, qualified only by the condition that the operation be managed as before. Such a condition, in our view, cannot be regarded as unduly onerous in light of the fact that it is management which is in the best position to know whether it is in fact carrying out business as before. This is an approach, moreover, that cuts both ways, in some cases preserving an entrenched employer right and in other cases preserving an established employee benefit.

29. The "reasonable expectations of the employees" approach was articulated in Simpsons Limited [1985] OLRB Rep. Apr. 594 at paragraphs 32 and 33 as follows:

30. Reasonable expectations language has appeared in a number of decisions dealing with the freeze section. See, for example, Corporation of the Town of Petrolia, supra; Scarborough Cen­tenary Hospital, supra; Oshawa General Hospital, York-Finch Hospital, supra; St. Mary's Hospital, [1979] OLRB Rep. Aug. 795 (Decision omitted from [1979] OLRB Rep. March); AES Data Limited, [1979] OLRB Rep. May 368. In the latter case, for example, the Board found that the employer was entitled to re-assign job functions since the employees could not reasonably expect to continue performing their jobs in exactly the same way despite changes in the mode of production and market conditions. Thus, in the Board's view, the reasonable expectations of employees as the appropriate measure of the employees' privileges which are protected by the freeze is a common thread running through the earlier decisions. In the instant case, the Board is expressly articulating the test.

31. The reasonable expectations approach clearly incorporates the practice of the employer in managing the operation. The standard is an objective one: what would a reasonable employee expect to constitute his or her privileges (or, benefits, to use a term often found in the jurispru­dence) in the specific circumstances of that employer. The reasonable expectations test, though, must not be unduly narrow or mechanical given that some types of management decision (e.g., contracting out, workforce reorganization) would not be expected to occur every day. Thus, where a pattern of contracting out is found, it is sensible to infer that an employee would rea­sonably expect such an occurrence during the freeze. The Board in Simpsons, supra, although the cleaning was contracted out before the company itself took over that operation, did not con­clude there was such a pattern.

32. Both the "business as before" and the "reasonable expectations of employees" approaches contribute to an interpretation of section 13 which "recognizes that employment rela­tionships tend to reflect the dynamic nature of business activity and is ... responsive to the variety of situations and bargaining relationships which are presented to the Board." (Mohawk Hospital, supra, at para. 20.)

33. In these circumstances, the Board must determine the terms of the parties' agreement with respect to L.T.D. benefits. In other words, what are the applicant's members' and the hospi­tal's rights and duties with respect to the L.T.D. package? Those rights and duties are clearly spelled out in the collective agreement. The hospital must provide a certain level of L.T.D. bene­fits and the applicant's members must pay 100% of the premium. There is no suggestion that the hospital has failed to provide the level of benefits required. However, the union is asking us to find that its members' rights with respect to L.T.D. also include the right to be part of a benefit group with all other hospital employees because that is what has happened before and what the employ­ees would reasonably expect. Essentially the union is claiming that its members have the right to continue to enjoy the lower premiums which result from the better experience rating of the group as a whole. The Board cannot agree. The groups in which the insurer places the employees for the purposes of the various benefit plans is not part of the terms and conditions of employment or rights, privileges or duties of these parties. There is no right for the applicant's members to be in the same benefits group as non-unionized employees set out in the collective agreement. In fact, the collective agreement between the parties stipulates that the terms and conditions of the L.T.D. plan is not part of agreement and is not subject to the grievance procedure.

34. We also do not find that the unionized employees enjoy the privilege of being part of the larger L.T.D. group. Unionized and non-unionized employees are in different groups for dif­ferent benefits depending upon whether their benefits and premium share are identical. Where they are not, they are placed in separate groups by the insurer. Hence, the benefit package avail­able to the unionized and non-unionized employees is different. The separation into two L.T.D. groups is part of this previous pattern.

35. The applicant's members have experienced premium increases every year since the hos­pital stopped insuring its own plan. The premium increase in 1994 while larger, is still part of that previous pattern. This pattern of periodic premium increases by the insurer constitutes business as usual and what the employees would reasonably expect and therefore the increase is not a breach of the Act. (See Ottawa General Hospital, supra.) The union's members are vulnerable to L.T.D. premium increases because of the provisions of the collective agreement which require them to pay 100% of the premium but leaves the choice of carrier to the hospital. For all of the above reasons, the Board dismisses the application with respect to section 81 of Act and section 13 of the HLDAA.

36. Although the Board does not find that implementing the Core Plus Plan and increasing L.T.D. premiums for union members violated the freeze, the hospital's actions might still be in violation of the Act if its implementation of the Core Plus Plan was at least partly motivated by the desire to penalize union members. However, the facts do not support such a conclusion. The hos­pital had previously considered a flexible benefit plan and it reasonably revisited the concept as a way to cut spending during a period of budget cuts. The process that Mr. Hoover undertook sup­ports the contention that the change was made for business reasons and the hospital appears to have acted on his recommendations. Furthermore, Metropolitan Life was chosen to be the new insurer before it was determined that the L.T.D. premiums for unionized employees would have to be increased. The premium quote which was used for the net costing upon which the decision to choose Metropolitan was made was lower than the 1993-1994 Canada Life rate. Therefore the evi­dence does not support a finding that the hospital decided to implement the Core Plus Plan or to choose Metropolitan Life even in part because of the effect on the premium rates for the union's members. Although Mr. Hoover knew that the experience rating for the union group alone was poorer than the rating for the employee group as a whole and that the separation into two groups might impact negatively on the union, we do not find that this knowledge was a factor in his recom­mendation or in the hospital's decision.

37. Not all differences in treatment between unionized and non-unionized employees amount to discrimination contrary to section 67(a). Unionization necessarily means that employees will be treated differently in many respects than their non-unionized colleagues. In these circum­stances the union's members had historically enjoyed some superior benefits to their non-union­ized colleagues. The hospital has not now decided to provide superior benefits to the non-union­ized employees to undermine the union. All it has done is implement a system where non­unionized employees can choose to take fewer benefits at a lower cost. The hospital could not implement the same system for its unionized employees because it must provide a certain level of benefits under its collective agreement. This is not a difference in treatment even when it results in higher premiums for the union's members, which attracts the sanctions of the Act.

38. The wording of the hospital's letter to the union's president is unfortunate. As stated above it says "the increase in the L.T.D. rate is a result of the number of claims and bad experience with employees who are covered by the the CUPE agreement." This might suggest to some­one not familiar with the jargon of the insurance industry that it was the hospital's personal experi­ence with disabled union members not the claims history that was motivating the change. How­ever, the Board finds that the letter meant that the increase was based on the claims history and did not mean it was a punishment for the bad behaviour of the union's members. Therefore the Board finds no evidence that the hospital's actions were motivated by anti-union animus.

39. It appears that the union's real concern is that its members also want to be able to par­ticipate in the Core Plus Plan and its attendant cost savings. It is of course part of the collective bargaining scheme that union members must live under the terms of employment that their repre­sentatives negotiate. In these circumstances the parties are about to embark on bargaining a new contract so they are free to negotiate a different benefit package if they choose. The problem seems to be that the parties are engaged in central negotiations and the local union does not know if it can make flexible benefits part of the union's proposal or whether the parties will be able to negotiate the issue locally. This kind of problem is inherent to a central negotiation process. The "pro" of such a scheme is that all the union's members have the same terms and conditions of employment but the "con" of such a scheme is also that all the union's members have the same terms and conditions of employment. Although the present situation may be awkward for the union, that is not a result of a violation of sections 65 or 67 by the hospital. The union suggested that the hospital should have told it that it was going to change to the Core Plus Plan before they agreed to central negotiations. However, while the hospital's failure to notify the union may be a significant factor in the policy grievance that we understand the union has filed, the Board does not see anything in sections 65 or 67 of the Act which would require the hospital to advise the union that it was going to change the non-union employee benefit plan.

40. For all of the above reasons, the Board finds that the responding party has not violated sections 65, 67 and 81 of the Labour Relations Act or section 13 of the HLDAA. This application is therefore dismissed.