Earlier this year, we appeared before the Ontario Court of Appeal, in the case of Barber v. The Manufacturers Life Insurance Company (Manulife Financial), 2017 ONCA 164 (CanLII) which revisited what has become an age-old question about whether disputes regarding non-payment of Long Term Disability Claim for unionized employees belongs in the Courts or should be dealt with through Arbitration.
The Court of Appeal found that the facts of Barber required any such disputes to be grieved through the provisions outlined in the collective agreement. As they did not consider that the decision of the lower Court constituted a “palpable and overriding error” and furthermore agreed with Justice Belobaba that the Collective Agreement incorporated the terms of the long term disability plan, thus obligating the employer to ensure that such benefits were provided even though decisions regarding the payment of the benefits rested entirely with Manulife.
The Court of Appeal arrived at a similar conclusion a few months later in the Morriseau v. Sun Life, 2017 ONSC 686. Again, the Court reviewed the terms of the collective agreement and determined that the long term disability plan was incorporated into the agreement. Sun Life acted as an administrator or agent of the employer only in this case with financial liability for the benefits remaining with the employer.
The disappointing aspects of these cases is that the expectation of the parties and the availability of a remedy seemed to get no real consideration in the Court. The fact that both claimants deserving of further long term disability benefits in cases like these may be left without a viable remedy did not appear to trouble the Court.
Unions Are Supposed To Represent Members In Pursuing Long Term Disability Benefits
With respect to the expectation of the parties, I refer to what both employers and unions intended to occur when arriving at a workable collective agreement. In many cases, it may come as quite a rude awakening that unions are supposed to represent their members in pursuing disability benefits where a 3rd party insurance company has rejected or terminated such claims.Employers and Unions who intended for such disputes to be dealt with outside the labour relations system need to take a close look at their collective agreements to ensure that these types of issues don’t continue to arise in the future.
There can be no doubt that in certain situations, both the employer and the union do wish to have such matters dealt with through the labour relations systems and in such cases the unions have taken steps to ensure that their members are provided with competent representation to give their members the best chance at success in recovering disability insurance benefits.
If, however, the intention is to permit unionized employees to pursue claims against insurers through the Courts, then the collective agreements need to spell this out in a clear manner to prevent claims from getting stuck in a dispute over the most appropriate forum.
Difficult To See Efforts Made By Insurers To Shift Matters To Labour Relations
As a law firm that predominantly handles LTD disputes, it is difficult to see efforts being made by insurers to shift these matters to the labour relations world as anything more than a bald attempt to delay, deflect and avoid paying valid claims. Ultimately, people who have had their LTD claims denied are simply seeking that their claims be honoured and that the question of entitlement be dealt with on the merits rather than standing behind procedural issues to further delay dealing with the question of entitlement.
If you find yourself or someone you know trying to navigate their way through these complex questions, the best advice is to talk to your union to get a clear answer from them regarding your rights when your LTD benefits have been denied. The difficulty is that often the front-line union reps aren’t so sure about these questions. You should also consult experienced disability insurance lawyers who can help to determine what the best course of action is in your case.