The Supreme Court of Canada’s recent decision in Bisaillon v. Concordia University has attracted attention, partly due to its potential to lead to multiple proceedings on the same matter. Concordia’s central issue was whether a labour arbitrator or a court should hear a dispute by union members over the use of funds by the University’s pension plan, which included both non-union and union members(covered by nine collective agreements). The plaintiffs wanted their complaint heard in court as a class action; however, the Court ruled the matter should be arbitrated using the grievance procedures under the collective agreements.

But this kind of jurisdictional issue is not confined to pension plans. Although Concordia could eventually have an impact on some class action disputes in the benefits arena, the Ontario Court of Appeal’s 2005 decision in Perlett Estate v. Riverside Health Facilities already provides a good example of how jurisdictional questions can also affect collectively bargained group benefits plans. In Perlett, the estate of a deceased nurse sued her employer, Riverside, for life insurance benefits under a group policy administered by Riverside. The employee chose basic coverage, which paid minimal benefits, when she could have elected enhanced coverage at no extra cost. The trial judge found Riverside negligent, particularly for not advising the employee about the enhanced benefits, which she would likely have elected had she been aware. The judge noted the “hospital made no effort to confirm the elections of staff who made unusual benefits choices.” Whether plan administrators must now watch for “unusual” benefit choices, and further, what constitutes “unusual” in terms of benefits elections, remain to be seen. Although the judge ruled on the negligence aspects of the case, the action was nevertheless dismissed on the basis the matter was governed by collective agreement and should therefore have been resolved through arbitration.

But on appeal by the estate, it was determined the court did have proper jurisdiction to hear the case. Using legal principles also applied in Concordia, the Court ruled the trial judge failed to determine the “essential character” of the dispute and whether it fell within the collective agreement’s scope, having regard to its provisions relating to group insurance. The dispute concerned plan administration whereas the agreement’s terms were limited to the employer’s payment of premiums. The Court concluded the parties didn’t intend such disputes to be governed by the agreement. Therefore, the Court, not an arbitrator, had jurisdiction. As the negligence findings weren’t appealed, Riverside had to pay damages(over $200,000), which notably, weren’t reduced by the amount previously paid in settlement by the insurer. Group benefit plans, when collectively bargained, are typically addressed in one of four ways. The collective agreement may: not mention the plan; require the payment of specified benefits; only impose an obligation on the employer to pay premiums; or, incorporate the actual plan or insurance policy by reference. Therefore, an employee’s ability to enforce benefit provisions, and the remedies available, can range from an outright ability to sue the employer in court to a requirement that all matters be arbitrated. Many agreements, though, provide for what is effectively a patchwork of remedies, with resulting uncertainty for all. Disputes over benefit coverage and administration may not have the profile of pension cases, but the time, energy and money consumed in resolving them can be equally draining. Rulings like Perlett should remind employers and unions alike that they can still control their fate with respect to the resolution of benefit disputes, which inevitably will arise. Anticipating potential conflicts and considering in advance the most appropriate jurisdiction for their resolution can go some distance to increasing the likelihood of an acceptable outcome.

Michael Wolpert is an associate in the pension and benefits department at Osler, Hoskin & Harcourt LLP in Calgary.