Court File and Parties

Court File No.: 500/08 Released: 2009-02-23

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

Re: The Ottawa Hospital, Applicant - and - Ontario Public Service Employees Union, Local 464, Respondent

Before: Hackland, R.S.J, Swinton and Karakatsanis JJ.

Counsel: Ian R. Dick, for the Applicant Alison Dewar, for the Respondent

Heard at Toronto: February 17, 2009

ENDORSEMENT

[1] The applicant employer, Ottawa Hospital, seeks judicial review of an arbitration award dated April 22, 2008 in which the arbitrator found the re-qualification provision for short term disability benefits was discriminatory against workers with disabilities who are able to work part-time but not "regular" work weeks.

[2] The employer and the respondent, the union, are parties to a collective agreement which provides that the employer will provide short term disability benefits. The following two provisions were challenged as discriminatory:

If you become Totally Disabled and are unable to work, you may receive a Sick Pay benefit from your employer of up to 100 percent of your earnings for up to the first 15 weeks of your disability. Your benefit amount will depend on your regular earnings and your length of service.

When you return to work after an absence due to a Total Disability and work for three continuous weeks, your benefit period of 15 calendar weeks will be reinstated in full. However, if within the three regular work weeks following your return to work you are disabled from the same or a related cause, only the remainder of the 15 calendar week benefit will apply.

[3] It was agreed by the parties before the arbitrator that the short term disability provision applied both to those who were fully or partially disabled and unable to work full-time, consistent with the definition for total disability. Therefore workers who become disabled but who can still work part-time could draw on this short term disability to top up their salary. This means that those who can work 90% of a regular work week can claim benefits for the 10% of the week they cannot work.

[4] The arbitrator found that the top-up benefits for those working part-time were available up to a maximum of 15 weeks (rather than for a longer period up to a maximum amount equal to 15 weeks worth of pay). It was a benefit to provide income protection for a defined period, not a defined amount, and therefore did not discriminate against individuals who were partly disabled. This aspect of the arbitrator's award has not been challenged.

[5] The arbitrator found that the second provision that allowed workers to re-qualify for short-term benefits after three continuous "regular work weeks" was discriminatory because it is possible that workers whose disabilities allow them to work or return to work part-time may never re-qualify for short-term disability benefits.

[6] The arbitrator held that the re-qualification provision created a distinction between the two classes of disabled employees, analogous to what was done to the two classes of disabled employees in Battlefords and District Co-operative Ltd. v. Gibbs, [1996] 3 S.C.R. 566. That case dealt with a benefit plan that made a distinction between physical and mental disabilities and found it resulted in discriminatory treatment as between the two types of disabilities. The arbitrator found that in this case, as in Battlefords, the re-qualification provision of the plan draws a distinction between two classes of disabled employees, and results in discriminatory treatment between disabled employees who are not capable of working at all (but return to work full-time) and those who are able to work part-time and may never be able to satisfy the re-qualification provision.

Standard of Review

[7] The Applicant argues that the standard of review is correctness because the arbitrator misconstrued the legal precedent, and the interpretation of the human rights principles in the Battlefords case did not engage his labour expertise. Counsel submits that little or no deference is warranted as the court has equal or greater expertise in these issues.

[8] It is clear however that the labour arbitrator was applying principles of human rights and evaluating allegations of discrimination in the context of this specific agreement. The question before the arbitrator was one of mixed fact and law. The Labour Relations Act expressly directs arbitrators to have regard to the Human Rights Code, and the collective agreement expressly incorporates the Code. In the labour context, application of human rights principles falls into the arbitrators' area of expertise.

[9] In Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, the Supreme Court of Canada held that questions of mixed fact and law attract deference and the standard of review is reasonableness. The Divisional Court has also held that deference is to be accorded to decisions of arbitrators involving the exercise of expertise in applying the Human Rights Code where there are questions of mixed fact and law: Re Amalgamated Transit Union, Local 113 v. Toronto Transit Commission, [2005] O.J. No. 259 (Div. Ct.).

[10] Of course, if the arbitrator misstates the legal test that is to be applied to those facts, the resulting decision fails any review for reasonableness (Lake v. Canada (Minister of Justice), [2008] 1 S.C.R. 23, at p. 41).

[11] We are satisfied that the applicable standard of review in this case is reasonableness.

Analysis

[12] The employer argues that the arbitrator misinterpreted the SCC case of Battlefords because that case involved a plan whose purpose was to provide income replacement for employees who were unable to work but made a distinction between mental and physical disabilities - a distinction based upon the type of disability that was not relevant to the purpose of the plan and was unrelated to the needs and capacities of those groups. The employer argues that the plan in this case treats short term and long term disabilities and partial and full disabilities differently, and specific accommodation is made for partial disabilities, because the capacity and needs of the groups are different.

[13] However, this distinction does not hold, at least in the case of a person who is being accommodated and working with a partial disability and who suffers from another illness and requires sick leave and who cannot access the short term disability benefits, no matter how long he or she has been working with the partial disability.

[14] For example, a full-time worker who experiences a disability (such as chronic fatigue) that reduces capacity to 90% of regular hours but does not preclude all work cannot meet the requirement of "three regular work weeks". Workers in this position will run out of benefits after 15 weeks, and no matter how many hours they work or how long, they will never re-qualify for short-term benefits even if they subsequently suffer from an unrelated short term disability (such as a broken leg) and cannot work for several weeks. In contrast, employees whose disability allows them to return to work full-time can, after only 3 weeks, re-qualify for full short term disability benefits. This results in a sub-set of employees with ongoing disabilities being treated adversely when compared to other employees with respect to access to an important aspect of the disability scheme. The reason for the distinction is their disability, which prevents them from meeting the criterion of three weeks full-time work.

[15] The purpose of the re-qualification provision is allow a worker who has accessed the short term disability benefits previously, and has returned to work, to take advantage of the short term disability benefits again in the event of a new short term disability. The denial of any opportunity to re-qualify for those who return part-time and who experience another illness such as the one described above is inconsistent with the purpose of the plan.

[16] We are therefore satisfied that the arbitrator's decision that the re-qualification provision discriminates against those who are suffering partial disabilities is reasonable and is consistent with the Battlefords and District Co-operative decision. While his reasons may be unclear, we are satisfied the result is reasonable. This provision discriminates against a worker with a partial disability, at least to the following extent: a worker who has returned to work part-time after using the short term disability provision and who works continuously but at a reduced level is unable to access a further period of short term disability, if he or she subsequently suffers from another short term disability.

[17] The appropriate remedy is yet to be determined and the parties will no doubt have further opportunity to review the extent of the discrimination and to adopt such remedial measures as may be appropriate.

[18] The appeal is dismissed. As agreed between the parties, costs to the Respondent are fixed in the amount of $5,000 plus disbursements.

Hackland R.S.J.

Swinton J.

Karakatsanis J.

Released: February , 2009