A recent Court of Appeal of Alberta dismissal of a case relating to age discrimination and the eligibility of receiving long-term disability benefits provides some clarity to future legal interpretation of similar employer-sponsored plans.
In International Brotherhood of Electrical Workers, Local 1007 v. Epcor Utilities Inc., the union’s appeal related to whether a long-term disability plan violated the Alberta Human Rights Act. Darrell McGowan, a former employee at Epcor and the grievor in the original case, claimed he had effectively been forced to resign and receive pension benefits rather than the ongoing long-term disability benefits he’d been receiving.
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When McGowan had become unable to work due to health problems, his employer, Epcor, couldn’t identify a position to accommodate him. In 2011, he began receiving long-term disability benefits of about $3,660 per month. Epcor outsourced its long-term disability coverage to its insurer. Under the standard policy, the long-term disability coverage extended only to when an employee reaches either the earlier of age 65, retirement or when they’re “eligible to retire with a full pension or a full pension equivalent.”
In September 2012, McGowan’s long-term disability benefits ended after he became eligible to retire on a full pension because he was over age 55 with more than 35 years of service. He resigned in February 2013 and began receiving pension benefits of about $2,342, in addition to Canada Pension Plan payments of $1,217 per month. He argued he should have been able to remain on disability benefits until choosing to retire or reaching age 65 and maintained the policy violated the Alberta Human Rights Act with regards to age discrimination.
The earlier decisions dismissing the case relied on the finding that the long-term disability policy was a bona fide contract with specific pre-existing terms and conditions agreed between the insurer and Epcor. In that respect, the policy reflected a collective bargaining arrangement with the union. Alberta’s human rights legislation provides for an exception for bona fide group or employee insurance plans. But also at issue in the case was whether a reasonableness requirement also applied.
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In its determination, the Court of Appeal of Alberta reviewed two Supreme Court of Canada case precedents that involved age discrimination and conflicts with provincial human rights legislation. The cases were:
- Zurich Insurance Co. v. Ontario (Human Rights Commission). The case involved discrimination relating to the pricing of auto insurance premiums based on the age, sex and marital status of the insurance customer. Zurich argued that the setting of insurance premiums relied on actuarial evidence. The court concurred with the insurer’s basis for setting insurance rates. In conclusion, it found the grounds for setting rates were reasonable.
- New Brunswick (Human Rights Commission) v. Potash Corp. of Saskatchewan Inc. The case concerned a pension plan that required mandatory retirement at age 65. In its determination, the court concluded that, unlike the Zurich case — which required both reasonable and bona fide qualification — the pension plan only had to meet the criteria of being a “bona fide plan.” In other words, the pension plan merely had to be “legitimate and genuine” as a whole and in accordance with governing legislation.
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In the more recent Alberta case, the appeal court found last month that since Alberta’s Human Rights Act doesn’t contain a reasonableness provision, the notion that an insurance plan must be both reasonable and bona fide, as in Zurich, didn’t apply to the Epcor policy. As a result, it dismissed the appeal by McGowan’s union, the International Brotherhood of Electrical Workers.
Linda McKay-Panos, executive director of the Alberta Civil Liberties Research Centre and a human rights lawyer, notes the decision relied on a “highly technical interpretation” of the province’s human rights legislation. Human rights law isn’t intended to be punitive based on wording but rather to provide broad guidance in terms of how it affects people, she says, adding that in this case, the court decided to apply a strict reading of the Alberta Human Rights Act.
In keeping with the intention of human rights law, the simplest solution would be for the legislature to amend the law to include a reasonableness provision in the relevant section of the Alberta Human Rights Act, says McKay-Panos. “The Alberta Human Rights Act hasn’t been updated since its introduction in 1972 and needs to be reviewed.”
As a result of the outcome of the case, McKay-Panos suggests other jurisdictions need to evaluate the wording of their own human rights legislation to see if their wording is similar to that of Alberta’s law or whether it reflects the overall intention of addressing the effects of discrimination.
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