Tag: Long-Term Disability for Employees

This blog is co-written by our former articling student, Linda Noorafkan.

On November 19, 2018, an Ontario arbitrator determined that a hospital employer was required to continue paying 75% of the billed premium towards the Long Term Disability (“LTD”) coverage of employees that continued working beyond the age of 65.

CUPE, Local 1999 and Markham Stouffville Hospital, Re involved a Union that filed a grievance against the Markham Stouffville Hospital (the “Hospital”). The Union took the position that the Hospital had violated the collective agreement by discontinuing LTD coverage for Hospital employees who were 65 years of age and older.

With respect to LTD coverage, Article 13.01(a) of the collective agreement stated as follows:

The Hospital will pay 75% of the billed premium towards coverage of eligible employees under the long-term disability portion of the Plan (HOODIP or an equivalent plan as described in the August, 1992 booklet (Part B)), the employee paying the balance of the billed premium through payroll deduction.

While the insurer’s benefits plan indicated that there would be limited eligibility for LTD once employees turned the age of 65, the HOODIP Long Term Disability Benefit booklet for August 1992 stated that LTD benefits would be provided “[…] until the employee reaches age 65, or life in some cases.” The booklet also added that LTD benefits would end at the earliest of the following events:

• Your 65th birthday, if you become disabled after age 64 and you have completed fewer than 10 years of Continuous Service, when you become disabled.

• The day 12 months after the Date of Disability, if you become disabled after age 64 but before age 65 (minus the qualifying period) and you have completed fewer than 10 years of Continuous Service when you become disabled.

• The date of death if you have completed 10 years of Continuous Service when you become disabled. In this case, at age 65 your benefit will be further reduced by any additional payments from government plans and your employer’s pension plan that begin at that age (see Amount of Long Term Disability Benefit).

In contrast, there is a 1980 HOODIP booklet, which indicated that LTD benefits would only be payable until the employee turned age 65. Also in contrast, The 1984 HOODIP booklet indicated that:

… LTD coverage terminated at age 65 but that benefits would continue past age 65 in certain circumstances reduced by pension and other benefits. Employees on LTD benefits are no longer required to take their pensions, Canada Pension Plan or Employment Insurance benefits at age 65.

The Union argued that, despite the provisions in the 1980 and 1984 HOODIP booklets, since the collective agreement referred to the 1992 HOODIP booklet, then the Hospital must provide LTD coverage in accordance with the 1992 HOODIP booklet. This would mean that the LTD benefits of employees over age 65 would be reduced by pensions and other benefits, not terminated.

In contrast, the Hospital made several arguments regarding the interpretation of the collective agreement. Overall, the Hospital claimed that, based on a review of the collective agreement, the 1992 HOODIP booklet, the plan from the year of 1992, and the history of the HOODIP from the year 1980 to 1992, the Arbitrator should conclude that LTD coverage ought to end once Hospital employees turned 65.

Ultimately, the Arbitrator followed the 1992 HOODIP booklet, instead of the plan, by finding that the collective agreement did not expressly terminate LTD coverage once employees turned the age of 65. In support of the Union, the Arbitrator concluded as follows:

The Employer also argues that the Union is seeking a new benefit and that clear and unambiguous language is required for such an interpretation. However, in a number of prior awards, arbitrators have found that benefits, including extended health, dental, life insurance, and accidental death and dismemberment, continue beyond age 65 even though the parties did not change the language of their collective agreement after the change to the legislation with respect to mandatory retirement. Arbitrators have rejected the argument that the parties must have intended that the age 65 limit would continue unless they negotiated otherwise, in favour of the assumption that the parties must be presumed not to have intended discriminatory provisions even if they were legal. Clear and unambiguous language has, therefore, been required to support a determination that benefits end at age 65. There is nothing about that analysis that would not apply to LTD benefits….

The Arbitrator concluded that if the employer had different intentions, those intentions ought to have been included in the collective agreement. Thus, the Hospital was required to pay LTD premiums for employees that were above age 65 and met the other LTD eligibility criteria.

There appears to be a trend in the jurisprudence towards requiring employers to maintain benefits for employees over age 65. The Human Rights Tribunal of Ontario’s decision in Talos v. Grand Erie District School Board is another example.

If you would like more information or legal advice on this subject, please contact Marty Rabinovitch at 416.446.5826 or marty.rabinovitch@devrylaw.ca

“This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.”