SHP673P

In their “Memorandum of Agreement” dated June 26, 2010 which concluded collective bargaining, and which was subsequently ratified, the parties agreed to the following benefit change at clause 6(c): “Co-pay of 20% on endodontic and periodontal services”.

The Union contends that the change set out at clause 6(c) has no application to the “cleaning and scaling of teeth”, a prophylactic

procedure which continues to be reimbursed at 100%.

The Corporation maintains that dental claims including one (1) time unit of scaling are assessed as preventive treatment (payable at 100%), whereas claims including multiple time scaling units are assessed as periodontic treatment and are reimbursed at 80%. The Corporation’s position has been applied to employee claims following conclusion of the latest collective agreement.

The Union submits the Corporation’s position and practice is in violation of the terms of the Dental Plan Agreement (specifically Appendix A, subsection A.1(a)(ii) thereof) as amended by the June 26, 2010 Memorandum of Agreement, which agreement is incorporated by reference into the collective agreement at Article 31.3. The Union requests a declaration to this effect and that any affected employees be made whole.

The Corporation denies the Union’s contention and request.

Shortly before the hearing scheduled in this matter, the Corporation advised that it would raise a preliminary objection to my jurisdiction. That objection was fully argued at the hearing on November 24, 2011, and at the conclusion of argument I determined that, in the circumstances of this particular case, the hearing should be adjourned and that I would issue my decision on the preliminary matter before taking any further step.

The Corporation submits that I have no jurisdiction to hear or determine the grievance because the collective agreement gives an arbitrator no authority to do so. This is a matter, it is argued, that falls within the third of the categories set out in Brown and Beatty, Canadian Labour Arbitration, categories which have met general approval from the courts. These categories are set out in Brown and Beatty at para. 4:1400 as follows:

Commonly, the relationship between such ancillary documents [pension, insurance and welfare plans] and the collective agreement will fall into one of four categories. In one, the plan or policy is not mentioned in the agreement. In the second, the collective agreement specifically provides for certain benefits, while in the third it only provides for the payment of premiums. In the last, specific plans or policies are incorporated by reference into the agreement.

In the third category, disputes arising with respect to claims for benefits under the “ancillary document” - in this case the Dental Plan Agreement made between these parties - are not arbitrable. It is argued that the present case comes within the third category. I agree that the collective agreement between these parties (there are three collective agreements, but their provisions relating to a dental plan benefit are identical, and for convenience I refer only to “ the collective agreement”) is one which provides only for the payment of premiums. Neither the collective agreement itself nor the dental plan appears to provide expressly for the payment of premiums by the Corporation, but such payment appears to me to be implicit in both agreements and the fact is that the Corporation does pay such premiums.

The collective agreement provides in Rule 31.3 that:

The Dental Plan shall be that Plan established by the Dental Plan Agreement that is currently in effect to which the parties to this Agreement are signatory.

It is argued for the union that the Dental Plan is thus incorporated into the collective agreement, although the employer takes the opposite view. The collective agreement of course contains an arbitration clause which, as a general matter would, if the argument is accepted, mean that a grievance relating to the administration of the dental plan could be filed in accordance with the grievance procedure of the collective agreement. Even if the collective agreement does not incorporate the dental plan, it may be that the dental plan itself constitutes a collective agreement which would, by law, include some form of grievance procedure. For the reasons set out below, I do not consider it necessary to decide these questions.

The present collective agreement, and the benefits agreements, including the dental plan, are the successors to agreements and plans which have been in effect between the parties for many years. The Memorandum of Agreement referred to in the joint statement set out above, and which is dated June 26, 2010, sets out amendments to the collective agreement and to the benefit plans including the dental plan. These amendments are now incorporated in the collective agreement and the plans. Article 6 of the Memorandum of Agreement deals with “benefit changes”, and includes the following (clearly dealing with a change to the dental plan):

Co-pay of 20% on endodontic and periodontal services.

This change now appears in Article IV of the Dental Plan Agreement. The material portions of Article IV are as follows:

1. Dental Plan

The Dental Plan for Eligible Employees shall provide for dental care which shall be in accordance with this Agreement.

2. For dental claims which originate on or after October 20, 2010, each Eligible Employee, subject to the provisions of Article IV.4, shall be entitled to claim as follows:

(a) Basic Dental Plan

For basic dental services, reimbursement of costs incurred up to 100% of Covered Expenses, except for periodontal and endodontic treatments which are reimbursed up to 80% of Covered Expenses, as shown in Appendix “A”. [Bold face indicates amendment]

(b) For major dental services, reimbursement of costs incurred up to 50% of Covered Expenses as shown in Appendix “A”.

Article VI of the Dental Plan Agreement deals with the submission of claims. Those are to be submitted to the Service Organization (the insurer) and evaluated and, where appropriate, paid by it. Articles VI.3 and VI.4 provide, in their material parts, as follows:

3. An employee whose claim has been denied by the Service Organization may submit, within sixty (60) days after such denial, information and materials in support of the claim to the Service Organization’s claims review section. Within sixty (60) days of receiving such submission, the claims review section shall review it and make a determination. - - - .

4. A claim denied by the Service Organization will not be subject to review unless the claim was denied on the basis of the eligibility provisions of Article III. [Those provisions are not material to the instant case.]

From the foregoing I conclude that whether the dental plan is incorporated in the collective agreement or not (it is certainly required by it), the parties themselves have established a procedure for submitting, determining and appealing claims for reimbursement and their denial. The employer’s obligation is to pay the premiums required by the dental plan. It is not obliged itself to pay the benefits provided for by that plan, but to pay the premiums so that an insurer will be responsible for them. This is, I find, a situation coming within the third of the Brown and Beatty categories set out above. Grievances with respect to claims under the insurance policy are not arbitrable through the general grievance procedure established under the collective agreement, and I would have no jurisdiction to hear them.

That finding does not, however, completely dispose of the matter before me. The question before me is not one relating to a rejected claim (although the complaint which gave rise to this matter appears to have related to a claim which was not paid in full). The substantial question before me is whether or not the Corporation has met its obligation under the collective agreement, which is to provide the dental plan agreed to by the parties. In particular, the question is whether or not the employer has provided an insurance policy which is in accordance with the requirements of Article IV of the plan, as set out above and, more specifically for the purposes of the present case, in accordance with clause A.1 of Appendix “A”. The material portions of Appendix “A” are as follows:

100% reimbursable up to maximum limit

- - -

(a) The following services (i) to (iv) inclusive, each limited to once every nine (9) months - - -

(i) oral examination;

(ii) prophylaxis (the cleaning and scaling of teeth);

(iii) bite-wing x-rays;

(iv) topical application of fluoride solutions.

Counsel for the Corporation placed considerable stress on the decision of the Ontario Court of Appeal in London Life Insurance Company v. Dubreuil Brothers Employees Association, 2000 CanLII 5757, a decision with which I respectfully agree and by which I consider myself bound. In that case, an employee grieved the refusal by an insurer to pay long term disability benefits. The arbitrator determined that he did have jurisdiction to hear and decide such a matter. The collective agreement in that case required the employer to pay the premiums for the disability policy. It was a “category three” situation, and the Divisional Court set aside the arbitrator’s decision. The Court of Appeal affirmed, noting, however, in para. 6 of its decision, that all parties had agreed that the employer had fulfilled its obligation. There is no such agreement in the instant case. It is agreed that the employer is paying the premiums, but it is not agreed that the employer has arranged a policy that provides the coverage the collective agreement requires.

In Dubreil, Goudge J.A., giving the judgment of the Court of Appeal, referred in para. 20 to the decision of McLachlin.J. in Weber [1995] 2 S.C.R. 929, where the fundamental issue of an arbitrator’s jurisdiction was stated as follows:

The question in each case is whether the dispute, in its essential character, arises from the interpretation, application, administration or violation of the collective agreement.

The question properly before me, as I find, is whether or not the Corporation has complied with the collective agreement requirement of providing and maintaining the insurance coverages contemplated by the collective agreement as well as by the dental plan agreement. If it has arranged for a policy which provides such coverages, and has paid the premiums therefor, then it has met its obligations in that respect, and there has been no violation of the collective agreement. The facts in that respect remain to be determined. Any questions relating to claims arising under an insurance policy would clearly not be properly before me. It is clear to me, however, that the question whether the policy or policies called for under the collective agreement have indeed been provided is a question which is properly before me. This is a matter strictly between the union and the Corporation, the parties to the collective agreement, and the question before me arises solely under the collective agreement.

For all of the foregoing reasons, it is my conclusion that I do have jurisdiction to determine the particular question before me, as formulated above. Accordingly, the matter will proceed to hearing on its merits. The Corporation has indicated its intention to comply with the requirements of Rule 5.5 in respect of production.

DATED AT OTTAWA, this 1^st day of December, 2011,

Arbitrator