In Okanagan College, the Faculty Association filed a grievance alleging that the Long Term Disability Plan purchased by the College was discriminatory and prohibited by the Code because it ceased coverage and benefits at age 65.
The College relied on s. 13(3)(b) of the Code which provides that a “bona fide group or employee insurance plan” making distinctions based on age, disability, marital status or sex is exempt from the general prohibition of discrimination in employment. The College relied on the Supreme Court of Canada’s decision in New Brunswick (Human Rights Commission) v. Potash Corporation of Saskatchewan Inc., 2008 SCC 45 (“Potash”) in which the majority of the Court established that a “bona fide plan” is one which is adopted in good faith and is legitimate and not a sham. By way of contrast, the minority judgment found that a bona fide plan would also have to meet a “reasonableness test” by being “reasonably necessary having regard to the operation and sustainability of the plan”.
At arbitration, the Faculty Association argued that the Potash test was too easy to meet and that it ought to be reconsidered and revised to ensure that it was consistent with “Charter values”. Alternatively, the Faculty Association argued that if the College’s LTD Plan was found to be a “bona fide plan” under the Code, then s. 13(3)(b) of the Code ought to be struck down as unconstitutional because it allows benefit plans that discriminate on the basis of age.
Although the Arbitrator found that majority’s test in Potash was the governing authority and it was not his role to rethink or revise the test, he nevertheless did just that. He determined that although the LTD Plan in question was adopted in good faith and was a legitimate plan and not a sham, the LTD Plan was not a bona fide plan because other plans were available for purchase which provided LTD benefits for a few years beyond age 65. Secondly, he found that he was bound to apply a Charter values analysis, which required the College to show that the impact of the LTD Plan on equality rights was not disproportionate to the statutory objective of s. 13(3)(b) of the Code which was to protect the sustainability of insurance plans.
The College applied to the Board for a review of the Award under s. 99 of the Labour Relations Code. The College argued that the Arbitrator failed to follow the majority’s test in Potash and had instead applied a different test which bore remarkable resemblance to the minority’s reasons in Potash, which had been rejected by the majority.
On review, the Board agreed with the College and found that the Arbitrator erred by engaging in the analysis that the minority in Potash endorsed. The Board stated:
In finding that the cost of extended LTD benefits to persons over age 65 was disproportionate to the rights being “stripped” and finding there was no evidence the potential costs were “destabilizing”, the Award effectively echoes the Minority’s assessment that a plan is not bona fide where it is, in the assessment of the trier of fact, not reasonably required having regard to the operation and sustainability of the plan”.
The Board found that it did not need to remit the matter back to the Arbitrator to apply the correct test because the Arbitrator had already made the necessary findings in the Award. The LTD Plan met the test of the majority in Potash – the plan was legitimate and was adopted in good faith. Accordingly, the Board declared that the College’s LTD Plan was a bona fide plan under s. 13(3)(b) of the Code and therefore not contrary to the Code.
Finally, since the LTD Plan was found to be a bona fide plan under s. 13(3)(b) of the Code, the Board remitted the matter back to the Arbitrator to determine the Faculty Association’s alternative argument that s. 13(3)(b) of the Code was unconstitutional.
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