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Dependent Children benefits resulting from Canada Pension Plan Disability (“CPPD”) benefits may be deducted from the Long Term Disability (“LTD”) benefits. Some insurance contracts will explicitly exclude CPP Dependent Children benefits from being deducted from LTD benefits while others will state that monthly LTD benefits are reduced by CPP disability benefits including the benefits dependent children. However, insurance contracts are not always as explicit. As such, an ambiguous clause could lead a judge or decision maker to conclude that the CPP Dependent Children benefits should not be deducted from the monthly LTD benefits.

In Hennig v Clarica Life Insurance Co.[1] (“Hennig”) the Court decided that the insurance company was not entitled to deduct any CPP Dependent Children Benefits from the LTD benefits. Importantly, the Court held that the CPP Dependent Children benefits were found to be beneficially owned by the children under the Canada Pension Plan Act[2]. The double recovery resulting to the family was found to be irrelevant because the disability coverage was bought and paid for privately. Therefore, the plaintiff was entitled to the full benefit provided by the insurance contract without the insurer being entitled to deduct the Dependent Children benefits.

The Court reached this decision by applying the contra proferentem interpretation rule. This Latin maxim means that if the words in a contract are ambiguous the contract should be interpreted against the one who wrote the words. In this context, the contra proferentem rule, favoured the interpretation of “received” as meaning beneficial and legal receipt rather than benefits paid in trust to the insured’s children. The Court concluded that the portions of the insurance company’s policy which purport to allow such a deduction were ambiguous because they did not clearly indicate whether monies received by the plaintiff fell within the types of payments the insurance company was entitled to deduct from any disability payments.

The case of Dubasoff v Mutual Life Assurance Company of Canada[3] is another illustration of the courts reluctance to deduct child benefit amounts from Long Term Disability payments.

For unionized employees, arbitrators will look at the collective agreement to determine whether the benefits for dependent children will be deducted. See our article: “Where should unionized employees appeal their Long Term Disability benefits claims”, if you are unsure whether you must file a claim in Superior Court or file a grievance to contest the denial of Long Term Disability benefits.

In London (City) v London Civil Employees Local 107[4], the arbitrator concluded that the CPPD child benefits did not fall within the ambit of “all income sources participated in by the employer and employee” The Arbitrator emphasized that there must be a sufficiently clear expression of intention by the parties to deduct the CPPD child benefits from the LTD benefits.

In Ruffolo v Sun Life Assurance Company of Canada[5], the opposite conclusion was reached. There, the plaintiffs were receiving Long Term Disability benefits under group insurance policies issued by the defendant insurer. They also received disability benefits for their dependent children under the Canada Pension Plan Act. The insurer deducted the CPPD Dependent Children Benefit from the LTD amounts payable under the insurance policy. The insurance policy provided that “monthly LTD benefits are to be reduced by the disability income to which the disabled member is entitled under a government plan (including benefits under the Canada Pension Plan, including benefits for dependent children)”. The Ontario Court of Appeal upheld the Trial Court’s decision, finding that the CPP Dependent Children benefits were incorporated by contractual consent into the concept “disability income to which the disabled member is entitled”. As such, the insurance company was entitled to deduct the benefits for dependent children from the LTD benefits.

Takeaways:

There must be a clear intention in the insurance contract to allow the deduction of Dependent Children Benefits from LTD benefits;
If the insurance contract explicitly provides that Dependent Children Benefits are to be deducted from LTD benefits, it is likely that the Court will enforce this provision;
If the language in the insurance contract is ambiguous a court will likely conclude that the Dependent Children Benefits should not be deducted from LTD benefits.

It is important to examine the insurance contract, the collective agreement (if applicable), the legislation and the jurisprudence carefully to determine whether the Dependent Children Benefits can be deducted from LTD monthly benefits.

[1] Hennig v Clarica Life Insurance Co. (2001), 33 CCLI (3d) 280; affirmed (2003), 2003 Carswell Alta 269 (Alta CA)

[2] Canada Pension Plan, RSC, 1985, c C-8.

[3] Dubasoff v Mutual Life Assurance Co., [1995] 123 DLR (4^th) 577 (SK CA)

[4] London (City) v London Civil Employees Local 107 [2006] L.V.I. 3602-6.

[5] Ruffolo v Sun Life Assurance Company of Canada, 2009 ONCA 274 (leave to appeal to SCC refused)

[This article is for informational purposes only and does not constitute legal advice, which cannot be given without consideration of your individual circumstances.]

Where should unionized employees appeal their Long Term Disability (LTD) benefits claim?

The dreaded answer is: “it depends…”

Fortunately, the Ontario Court of Appeal in Barber v The Manufacturers Life Insurance Company (Manulife Financial) (“Barber v Manulife”)[1] has clarified whether to file a claim for long term disability benefits in the Ontario Superior Court or to proceed in arbitration.

Firstly, one must determine whether the essential character of the dispute concerns LTD benefits. If so, does the claim’s essential character arise from the interpretation, application, administration or violation of the Collective Agreement? If the answer is yes, than it is the arbitrator, not the court, that has exclusive jurisdiction to decide.[2]

But wait! How do you know whether the essential character arises from the interpretation, application, administration or violation of the Collective Agreement? Simply put, how do we determine whether the arbitrator has the jurisdiction to decide benefit entitlement claims such LTD claims?

The Ontario Court of Appeal[3] has adopted the following four categories from Brown & Beatty which help answer this question:

Where the collective agreement does not set out the benefit sought to be enforced, the claim is inarbitrable;
Where the collective agreement stipulates that the employer is obliged to provide certain medical or sick-pay benefits, but does not incorporate the plan into the agreement or make specific reference to it, the claim is arbitrable;
Where the collective agreement only obliges the employer to pay the premiums associated with the insurance plan, the claim is inarbitrable; and
Where the insurance policy is incorporated into the collective agreement the claim is arbitrable.

In Barber v Manulife, Adrian Barber became disabled from her employment as a Port Hope police constable. She applied for LTD benefits under a group policy insurance; insured by Manulife. The collective agreement, which governed Ms. Barber’s employment, required the employer to offer disability insurance coverage to the Port Hope Police Association’s members. Ms. Barber appealed Manulife’s decision to terminate her benefits at the Superior Court of Justice. However, her claim was dismissed because the motions judge found that the collective agreement granted exclusive jurisdiction to the labour arbitration process. In other words, the Superior Court found it did not have jurisdiction over Ms. Barber’s matter.

The Ontario Court of Appeal agreed with the motions judge. The collective agreement established Ms. Barber’s rights to LTD benefits. In fact, the provisions within the collective agreement did more than merely oblige the employer to pay premiums for insurance: they covered the terms, the amount of the disability benefits and the definition of total disability. The Court of Appeal noted that the employer could have changed insurers as long as the benefits defined in the collective agreement continued.

Takeaways

An arbitrator may have jurisdiction in determining LTD entitlements when:

The collective agreement does more than merely oblige the employer to pay insurance premiums;
The provisions of the collective agreement covers the terms of the LTD benefits;
The amount of the disability benefits is specified;
“total disability” is defined in the collective agreement;
The insurance policy is incorporated in the collective agreement.

The courts will have jurisdiction, even in a unionized setting, when the collective agreement does not set out the benefit or only obliges the employer to pay the premium. Jurisdiction and the time lines will be determined by this analysis, so examine the collective agreement and the jurisprudence carefully before deciding whether to grieve or sue.

[1] Barber v The Manufacturers Life Insurance Company (Manulife Financial), 2017 ONCA 164.

[2] Weber v Ontario Hydro, [1995] 2 SCR 929, at paras 11, 52 and 54.

[3] London Life Insurance Co. v Dubreuil Brothers Employees Assn. (2000), 49 OR (3d) 766, at para 10.

[This article is for informational purposes only and does not constitute legal advice, which cannot be given without consideration of your individual circumstances.]

Federal Court of Appeal Upholds Employee Grievance Rights

In a recent decision, the Federal Court of Appeal conclusively determined that federal public service adjudicators may hear and decide on cases where the Federal Government revokes an employee’s reliability status and then terminates her for the loss of that status.

The adjudicator in the case at hand had found that the employer did not have a legitimate concern that the Grievor posed a security risk when it decided to revoke her reliability status and then terminate her. He therefore found that the Grievor’s termination had been without cause and ordered her reinstatement.

Before the Federal Court of Appeal, the Government argued that this decision should be overturned. The Government took the position that federal public service adjudicators could only consider whether an employee was terminated for cause and did not have the power to consider whether the Government’s decision to revoke an employee’s reliability status was justified.

The Federal Court of Appeal squarely rejected this claim, finding that the adjudicator’s approach was “the only reasonable approach to be taken.” In doing so, the Court overturned a number of cases which had limited employees’ right to grieve where they were terminated due to the loss of reliability status. The Court concluded that these cases were “no longer valid,” cementing the right of employees to bring forward grievances in these circumstances and for public service adjudicators to determine whether a revocation leading to termination is, in fact, justified.

The employee was represented by Andrew Raven of RavenLaw.

ODSP Rate Increase for Medical Travel: Moving in the Right Direction

RavenLaw gratefully acknowledges the contribution of this post by summer student Emily Cumbaa

A recent case before the Ontario Divisional Court examined ODSP’s reimbursement rate for medical travel. After many years of receiving reimbursement that only covered their operational travel costs, Ontarians who are on disability support can now seek reimbursement at a rate that covers both operational and ownership costs associated with their travel for medical treatments, such as appointments with out-of-town specialists. The case and the subsequent policy changes reveal that advancements in disability rights are slow, uneven, and hard-won.

The Case

Wayne Corrigan is a recipient of benefits under the Ontario Disability Support Program (“ODSP”), Ontario’s program providing income and other financial supports for individuals with a disability. Mr. Corrigan frequently travels between Oshawa and Toronto for specialized medical treatments.

A Regulation under the Ontario Disability Support Program Act states that benefits will be paid for “the cost of transportation that is reasonably required in any month for medical treatment for members of the benefit unit… if the cost of that transportation in the month is $15 or more” (O. Reg. 222/98, s. 44(1)1(iii.1)). Under ODSP policy, Mr. Corrigan could only be reimbursed for his medical travel at the rate of $0.18 per kilometre. However, Mr. Corrigan estimated that his actual travel costs were $0.45 per kilometre.

Mr. Corrigan asked ODSP to review its rate and reimburse him at the rate of $0.45 per kilometre. ODSP denied that request, and also denied an internal review. Mr. Corrigan then appealed to the Social Benefits Tribunal. The Tribunal denied Mr. Corrigan’s appeal.

The Tribunal relied on its reasoning from an earlier decision, which also denied extra reimbursement, distinguishing between operational and ownership costs associated with a vehicle. The Tribunal found that the phrase “cost of transportation” in the legislation included only operational, and not ownership costs.

Mr. Corrigan appealed the Tribunal’s decision to the Ontario Divisional Court. In October 2016, the Court ruled that limiting reimbursement for medical travel to only “operational” expenses was unreasonable. The Court sent the matter back to the Tribunal “for redetermination of the reasonable costs of transportation,” and emphasized both operational and ownership costs can be included in costs of transportation.

A quick note for everyone who is interested in administrative law: the Court found that the appropriate standard of review was reasonableness, despite both parties agreeing that correctness was the appropriate standard. The Court’s finding reinforces that administrative tribunals are owed substantial deference, even on a statutory appeal as opposed to an application for judicial review.

The Government’s Response

In January 2017, the Ontario government increased the mileage rate for medical travel to $0.41 per kilometre in the North and Northeast Regions of Ontario, and $0.40 per kilometre everywhere else in the province. This represents an increase of more than 220%. The medical travel mileage rates are retroactive to October 1, 2016.

The new rates also apply for self-employed persons on ODSP if they use their personal car for business travel to generate income. The business travel rates are not retroactive, and therefore came into effect on January 9, 2017.

The Takeaway

This case and the subsequent policy changes highlight that advancements in disability rights are:

slow;
uneven; and
hard-won.

Advancements are slow. When the new increases were announced, the rates for medical travel had not changed in 17 years. In that time, the cost of driving had increased substantially, largely driven by gas prices. The Social Benefits Tribunal had more than once denied an increase to the rate for medical travel.

Advancements are uneven. The Divisional Court noted that other programs paid higher rates for medical travel than ODSP. The rate increase also applies to Ontario Works recipients. But before the increase took effect, every municipality in the province was responsible for setting their own rate, creating differences across the province.

Advancements are hard-won. ODSP and the Tribunal were both reluctant to review and increase the medical travel rate. It is not surprising, therefore, that the Income Advocacy Support Centre reported that the rate increases were the result of years of advocacy work. This work included legal supports, a letter to the Minister, and collaboration between community and advocacy groups.

Thankfully for people on ODSP who must travel with their car for medical reasons, they can now be reimbursed at a rate that reflects their actual travel costs.

[This article is for informational purposes only and does not constitute legal advice, which cannot be given without consideration of your individual circumstances.]

Megan Fultz Co-Authors a Ground-Breaking Report on Legalization of Cannabis

Megan Fultz, one of RavenLaw’s 2017 Human Rights/Social Justice interns, is co-author of a ground-breaking report on the legalization of cannabis which was published by the Global Strategy Lab of the uOttawa Centre for Health Law, Policy and Ethics. The report titled “Reconciling Canada’s Legalization of Non-Medical Cannabis with the UN Drug Control Treaties”, identifies the legal barriers the government will face with the legalization of cannabis and proposes innovative solutions. The report was cited by the New York Times upon the introduction of legislation by the Canadian government to legalize the recreational use of cannabis. Congratulations Megan!

David Yazbeck Retained as Canadian Expert Panelist on Whistleblower Protection Law

David Yazbeck has recently been retained as a Canadian Expert Panelist for the European Commission, as part of a study examining whistleblower protection laws and empirical evidence of such protections. The Panel is conducting its whistleblower study so that the Commission can learn what is working and what is not working in terms of whistleblower protection in many jurisdictions.

The larger study aims to:

Map the existing rules on whistleblower protection in the EU-28 and gather empirical evidence on their effectiveness;

Assess the need for further measures at the EU level to strengthen whistleblower protection across the EU, and;

Assess the key impacts (economic, social and on fundamental rights) of potential EU measures to strengthen whistleblower protection across the EU.

David has extensive experience in whistleblower law and has argued many of the leading cases in the Federal jurisdiction in Canada.

Employers have a duty to accommodate prospective employees with a disability

In a recent decision, a Board of Inquiry under Nova Scotia’s Human Rights Code found that an employer had violated its duty to accommodate a prospective employee on the basis of disability. This decision provides important confirmation that, like existing employees, prospective new hires also have a right to be free from discrimination, and to be accommodated up to the point of undue hardship.

Background

The Nova Scotia Health Authority offered a job to Melanie Yuille, a registered nurse and single mother. The offer was conditional on her being cleared fit for work. When the employer found out that she had epilepsy, a condition that prevented her from working the night shift on a rotating basis, it rescinded the offer.

A Board of Inquiry under Nova Scotia’s Human Rights Code found that, in rescinding the offer, the employer violated its duty to accommodate Ms. Yuille’s disability. The decision affirmed that employers have a duty to accommodate prospective employees who can perform the essential duties of the job. An employer cannot pass over an applicant with a disability simply because she cannot meet some of the job requirements. The employer must establish that, if the applicant can perform the core function of the job, accommodating the applicant would cause undue hardship.

The employer took the position that working the night shifts was a bona fide occupational requirement. The employer claimed that if it hired Ms. Yuille for day and evening shifts only, other staff may have to work more nights and, in that case, it may incur extra overtime costs. It further claimed that hiring Ms. Yuille could affect staff morale and raised patient safety issues.

In rejecting those arguments, the Board of Inquiry found that the employer’s concerns with employee morale and patient safety were speculative and impressionistic. There was no actual evidence to support either claim. There was similarly no evidence that the cost of accommodating Ms. Yuille would have been unduly burdensome for this large employer. Furthermore, there was no evidence that the employer consulted the union about accommodating the applicant and, in any event, there was nothing in the collective agreement that presented a barrier to accommodating the applicant.

Ms. Yuille was awarded general damages of $15,000, compensation for financial losses incurred, and the opportunity to accept the next available nursing position with the employer.

Discussion

This is one of the few cases to address the duty to accommodate prospective employees. As the Board of Inquiry recognized, it is difficult for claimants like Ms. Yuille, a self-represented litigant, to enforce her human rights. Claimants in her situation are usually unable to afford legal counsel. The employer had experienced counsel to represent its interests and, while the provincial human rights commission was a party to the case, it did not act as the complainant’s advocate.

Ms. Yuille did, however, have one significant advantage over many other claimants, if not the vast majority, in her situation: the employer was transparent about its reasons for refusing to give her the job. There is rarely such direct evidence of discrimination in the hiring process — or, for that matter, in any discrimination complaint. Claimants must rely upon circumstantial evidence to prove their case, a daunting proposition for unrepresented litigants without knowledge of human rights jurisprudence or the law of evidence.

This case is a positive reminder that, despite those systemic barriers, in order to be effective, human rights legislation must protect persons with a disability from discrimination in employment, whether they are already in the workplace or are seeking to join it.

[This article is for informational purposes only and does not constitute legal advice, which cannot be given without consideration of your individual circumstances.]

Canadian Human Rights Commission decision on medicinal marijuana case overturned for a second time

For the second time, a decision of the Canadian Human Rights Commission to dismiss a complaint regarding discrimination related to medicinal marijuana has been set aside by the courts. In McIlvenna v Bank of Nova Scotia, the Federal Court found that the Commission breached its duty of fairness and ignored obviously crucial evidence supporting a complaint that Scotiabank had called in a mortgage because of the presence of medicinal marijuana on the mortgaged property.

Background

The Applicant, Robert McIlvenna, had a mortgage with the Bank, and had applied for an additional line of credit to perform renovations on the mortgaged house, which was occupied by his son and daughter-in-law. The Bank refused the line of credit and called in Mr. McIlvenna’s mortgage, and he alleged the Bank took this action because it had learned that medicinal marijuana was being grown in the home under a Health Canada license. The Bank maintained that the reason for its actions was a violation of the terms of the mortgage.

The Canadian Human Rights Commission initially rejected the complaint without an investigation. That decision was overturned by the Federal Court of Appeal, which found it unreasonable for the Commission to refuse to investigate, when there was a live factual dispute between the parties as to whether the Bank made its decision on discriminatory grounds. (See the Federal Court of Appeal’s decision here.)

The complaint was returned to the Commission for investigation. Following its investigation, the Commission again dismissed the complaint, finding that further inquiry into the complaint was not warranted. Mr. McIlvenna again sought judicial review of the decision in Federal Court. Among his arguments, he raised the fact that there were internal Bank emails in the Commission’s investigation file, which clearly supported the McIlvennas’ allegation that the mortgage was called in because of the presence of medicinal marijuana.

Judgment of the Federal Court

In his judgment, dated July 19, 2017, Justice Boswell of the Federal Court allowed the Application for judicial review. He found that the Commission failed to investigate obviously crucial evidence before it—specifically, the internal Bank emails. The Court held:

“The content of these two emails, in particular the email sent July 15, 2010, is obviously crucial evidence given the relevant allegations in the Applicant’s human rights complaint and the contradictory statements by the Applicant and his son. A reasonable person would agree that this evidence was crucial because it lends credence to the Applicant’s position that his son’s growing of medical marijuana may have been a factor in the Bank’s decision to call in the mortgage. Although the July 15, 2010 email is certainly not conclusive of exactly what was said during the July 15th meeting, at the very least it tends to corroborate the Applicant’s claim that Ms. Joliat discussed the Bank’s policy on grow-ops during their meeting and is crucial in determining the merits of the Applicant’s claim.”

Justice Boswell found that the Investigator “glossed over this evidence”, and failed to investigate the Bank’s policy on marijuana “grow-ops” in determining whether the Bank had a reasonable, non-discriminatory explanation for calling in the mortgage. The Court went on to find the ultimate decision unreasonable, because the Commission’s analysis “essentially ignores the evidence contained in Ms. Joliat’s two emails”, despite the fact that these emails supported the McIlvennas’ version of events. The complaint was referred back to the Commission for re-determination and, if necessary, further investigation.

The Applicant was represented in the Federal Court by Andrew Astritis and Amanda Montague-Reinholdt of RavenLaw.

You Can’t Take It With You: Good Faith and Fiduciary Duties of Departing Employees