LTD: ARBITRATION or COURT REDUX (Case Comment: Campos v. Sun Life)

LTD: ARBITRATION or COURT REDUX (Case Comment: Campos v. Sun Life)

LTD Benefits: Arbitration Or Court Redux

The recent Ontario Superior Court decision in Campos v. Sun Life, 2009 CanLII 43186 raises once again the complex issue of whether disputes regarding long-term disability benefits belong in the Courts or before an Arbitrator. The case involves a proposed class action for nurse members of the Ontario Nurses’ Association, and whether or not retirement benefits under the Canada Pension Plan can be deducted under the long-term disability plan that applied to ONA members entitled to lifetime LTD benefits (a very rare commodity in today’s group benefit landscape).

The case invokes the age-old Brown & Beatty analysis, which has led to extensive litigation in this area because the analysis must be applied on a case-by-case basis. In other words, the specific terms of the applicable collective bargaining agreement, as well as the disability plan must be reviewed carefully to come to the appropriate conclusion on the appropriate jurisdiction for a particular case.

In Campos, Justice Lax decided that the subject CBA and insurance plan met branch 4 of the Brown & Beatty approach, namely that the insurance policy was incorporated into the collective agreement, therefore making the claim(s) arbitrable. She therefore dismissed the claims of the plaintiff in this summary judgment motion.

An appeal seems likely as it seems that the case turned on Justice Lax’s interpretation of Article 12.07 from the CBA. Article 12.07 of the subject CBA states:

Any dispute which may arise concerning a nurse’s entitlement to short-term or long-term benefits under HOODIP may (emphasis added) be subject to grievance and arbitration under the provisions of the agreement.

It appears that the word “may” noted above has been interpreted to mean “shall” and has been invoked by the Court to slot this LTD plan into the arbitrable category. There is no discussion as to why the negotiators of the CBA included the word “may” instead of “shall” and it is respectfully submitted that nurse members of the ONA appear to have a choice between pursuing arbitration or proceeding by way of civil action.

Perhaps the Ontario Court of Appeal will have more to say on this subject, should this case proceed to appeal. For now, we are left to further puzzle over the appropriate analysis to apply to unionized group benefit disputes.

By David Share L.L.B.

President, Share Lawyers

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